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The strike threat system

By Rafe Champion - posted Thursday, 12 January 2012


"The duty of a union to be anti-social; the members would have a just grievance if their officials and committees ceased to put sectional interest first." Lady Barbara Wootton of the British Labor Party.

The Fair Work Act was designed to increase the power of the trade unions and it is important to explore the rationale and justification for the "strike threat system" which is the key to their power and influence.

The Qantas workers demonstrated the power of the strike threat system last year when they announced, well in advance, that they would not be working on the next Friday. Qantas responded by extensive modifications to their schedule, including the cancellation of some flights. Later the union advised that the strike was off, but it was too late to save the original flight plans and so a great deal of inconvenience was inflicted on the company and the public without any cost to the unionists.

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The Strike Threat System is the name of a book by the English economist William Harold Hutt (1899-1988). He also wrote The Theory of Collective Bargaining on the history of the trade union movement and the principles and practice of collective bargaining. He examined several of the historical claims which support trade union demands for special privileges, especially the use and the threat of physical violence which would normally be illegal.

The Suppression of the Trade Unions

According to the standard labour account, the English Combination Acts of 1799 and 1800 were designed to favour the employers and to prevent the workers from forming associations. Hutt challenged this in the chapter "Labour's Bitter Struggle" in The Strike Threat System. The chapter is on line.

He sketched the history of the relevant legislation from the Middle Ages to the nineteenth century to show that the aim was to control what we now call restrictive trade practices. He cited numerous examples of the application of these laws to merchants and traders, less often to trade unions, partly because the craft guilds that were constituted by royal charter enjoyed the privilege of being above the laws that controlled restrictive trade practices by other people. It seems that the workers where not subjected to any novel or oppressive constraints under the Combination Acts of 1799 and 1800, or indeed any other legislation, before or since.

Labour's Disadvantage

The idea of the inherent disadvantage of labour has been a potent influence in gaining widespread acceptance of the systematic use of violence and intimidation to pursue industrial claims. The mythology of struggle, "us against them" is explicit in the radical Marxist worldview and also in the militant but not necessarily Marxist sections of the labour movement.

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The notion of disadvantage of labour versus capital is supposed to be self-evident, especially in the case of large firms, but it can be contested on the ground that the firm needs workers just as much as the workers need the firm, so it is just a matter of how much the firm is prepared to pay or can afford to pay in hard times.

Hutt challenged the myth of disadvantage The Theory of Collective Bargaining and The Strike Threat System. It is not clear when there ever was disadvantage on the labour side because the history of industrial legislation from 1824 (repeal of the Combination Acts) is a record of the scales being tipped more and more in favour of labour at the expense of capital and managers. In 1905 the Liberal Party under Lloyd George even legislated to restrict the possibility of tort actions against trade unionists who caused damage in the course of industrial action.

Even without a leg up from the government, trade unionists soon learned to use a variety of destructive and productivity-eroding strategies to advance their personal advantage: the strike in detail, when one competing firm after another is subjected to strike activity; the "go slow" or work to rule; bogus safety issues and outright sabotage at sensitive stages of work such as concrete pours, harvesting and the transport of perishable goods. The question has to be asked, what do they think they are achieving for the workers at large and the common good, by these tactics? Lady Barbara Wootton of the British Labor Party provided an answer, cited by Hutt in The Strike Threat System (p viii). It is "the duty of a union to be anti-social; the members would have a just grievance if their officials and committees ceased to put sectional interest first." This brings us to the solidarity of the workers.

Working Class Solidarity vs the Bloody Aristocracy of Labour

One of the most resonant myths about the origin of the strike-threat system is that it emerged out of a concerted struggle of the poor against subjection by the employers. However Hutt found that it was the relatively affluent artisans who first organized the collusive pricing of their labor. The idea was to defend their special rights and privileges and to keep the lower orders (scabs) in their place. Even Beatrice and Sydney Webb who were apologists for the labour movement conceded that militant unionism arose to maintain the relative status of different levels of workers, not to elevate the most disadvantaged. The Webbs described the union system as "strengthening the almost infinite grading of the industrial world into separate classes, each with its own distinctive ends, and each therefore exacting its own 'rent of opportunity' or 'rent of ability." (The Strike Threat System, p 26)

Hutt reported the opinion of William Thompson (1775-1883), a writer and reformer who was very much in favour of the cooperative advancement of labour. For Thompson the workmen's combinations of his day were "bloody aristocrats of industry…The apprenticeship or excluding system depended on mere force and would not allow workers to come onto the market at any price…whether that force be the gift of law or whether it be assumed by the tradesmen in spite of the law, it is equally mere force" (Collective Bargaining p 10).

The early literature of the trade union movement is full of abuse amounting virtually to dehumanisation of the unemployed or lesser workers, 'knobsticks' and 'scabs', who were regarded as a threat. J S Mill summed up this attitude.

"Those whom we exclude are a morally inferior class of labourers to us; their labour is worthless and their want of prudence and self-restraint makes them more active in adding to the population. We do them no wrong by entrenching ourselves behind a barrier, to exclude those whose competition would bring down our wages, without more than momentarily raising theirs, but only adding to the total numbers in existence." (Collective Bargaining, p 11)

So much for the solidarity of the working class. Antipathy towards other workers who happen to be outsiders to the privileged group is the reverse of working class solidarity and this is expressed in demarcation disputes and contests for membership and control of the workplace. Above everything else the lack of solidarity of the working class is manifest in the pay and conditions achieved by the most powerful unions, through strikes and the threat of strikes and other exclusionary and productivity-eroding practices that have damaged other industries, the workers in those industries and the community at large.

The moral legitimacy of violence by trade unionists.

Hutt noted that exploiters of aggressive nationalism usually make much of legendary struggles for "freedom" in ages past, so unionists and their apologists have perpetuated the myths of "labor's bitter history."

The threat of violence is usually kept hidden (the gun under the table) as much as possible in genteel talk about "collective bargaining". This is the term invented by Sydney and Beatrice Webb to convey a picture of convivial and benevolent solidarity among the workers. As described above, this picture is an illusion.

The question of the moral legitimacy of "the right to strike" is confused by the different meanings of "strike" and "the right to strike". It is often presented as a self-evident fact that workers have the right to absent themselves from the workplace in a free society. From this it is supposed to follow that there is a right to have mass "absenting" when the shop stewards signal "all out".

Leaving aside the matter of contractual agreements that may be violated by leaving work at short notice, the gritty moral issues arise when (a) not all the workers want to go out and (b) management tries to recruit replacement workers for the ones who have gone out.

What is the legitimate use of violence? Agents of the state have the right and indeed the duty to use violence (under clearly defined rules) to maintain law and order and to protect the realm. The lawful use of private violence is generally restricted to self-defence. In the light of this principle, the use of violence by trade unions to enforce conformity in strikes and the use of violence on picket lines is clearly outside the law unless the law has been revised to permit the unions to operate outside the limits that apply to everyone else.

The acceptance of trade union violence is one of the great blemishes on the face of the western democracies. The tolerance that is extended to trade unionists in that respect reflects the hold on the popular imagination that is exerted by the mythology of the labour movement. This was very clear during the waterfront dispute some years ago when the liberal intelligentsia and sympathetic commentators in the media lined up to support the wharfies without blinking an eye over the potentially lethal violence that they were using. The ultimate absurdity of their stance was demonstrated by the suggestion or implication that the substitute dockworkers were equipped with balaclavas and dogs in order to inflict violence instead of the real reason which was to save themselves and their families from violent retribution.

Collective bargaining to even up the shares between labour and capital.

Peace-loving supporters of the labour movement may concede that violence in industrial relations is an evil, but they may argue that it is (or was) a necessary evil to obtain justice for the downtrodden and disadvantaged. Can they continue to defend the strike threat system if it is demonstrated that the main beneficiaries are the most reckless and violent players, the "bloody aristocracy of labour"?

Collective bargaining is supposed to improve the lot of the working class as a whole by a redistribution of wealth from capital to labour. This is the central point that Hutt contested. He showed that claims enforced by the threat of strikes can only advance sections of the labour force at the expense of unorganized labour, the unemployed and the community at large without affecting any overall transfer of wealth to the working class at large.

As far as Hutt could find in the literature, unprotected and non-unionised workers gained proportionately as much from general upward movements in productivity as workers in unions. It seems that there is no clear correlation between the degree of unionization and the speed of wage-rate increases. The exceptions to that pattern are the most violent and uncompromising who do better than average and more lowly workers and the unemployed who do worse than average either because they are excluded from any kind of work by "the going rate" (wage rates set too high which render them unemployable) or because they are kept in lower paying jobs by regulations and practices which impede productivity and flexibility in hiring and firing.

Conclusion

A wide-ranging debate on industrial relations is required to prepare the way for a more fair and flexible system. It seems from the chapters by Grace Collier and Ken Phillips in The Greens: Policies, Realities and Consequences (summarized here) that the Fair Work Act was crafted to suit the most militant trade unions who happen to be major financial backers of the Greens. The results are causing widespread concern about genuine fairness for all the players in the system, not just the workers, and also about productivity which every economist agrees has to be raised for the benefit of everyone. Genuine fairness and productivity should not be sacrificed on the altar of trade union mythology.

More on W H Hutt can be found here including an overview of his career and major works, his important essay on the mythology of the factory system and a condensed version of his account of the apartheid system in South Africa.

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About the Author

Rafe Champion brings the grafting qualities of the opening batsman and the cunning of the offspin bowler to the task of routing dogmatists, protectionists and other riff-raff who stand in the way of peace, freedom and plenty. He has a website and he blogs at Catallaxy and also at The History of Australian and New Zealand Thought. For more about Rafe visit here. All of his posts on Catallaxy for 2007 can be found at this link. Not all the links work and some need to be cut and pasted into the browser.

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