The classic from the great labor economist W.H. Hutt argues that it is not the strike but the strike threat that makes unions so incredibly costly to American prosperity. It hangs over unionized companies like the sword of Damocles, intimidating property owners into giving into demands at the expense of profitability.
“The strike is a form of warfare,” he writes, “and the expectation of its use-as a fact or as a threat-has come to condition nearly all private policy in determining wage offers. The strike-threat system has created a species of continuous aggression and resistance to aggression; and union policymakers have felt it essential to keep alive an undampened suspicion of and lurking hostility toward management and investors.... My thesis that strike-threat power is an unacceptable method of redressing wrongs in any circumstances, while it is of course doubly objectionable when it is used for indefensible objectives.”
This is not a relentless rant but a thoroughly scientific investigation by a top labor economist of the 20th century. It was published during a period of declining strikes, as a way of showing that it is not the actual strike but the structure of unions themselves that are the real source of the problem.
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Hutt was an economist of the classical tradition who identified himself with the Austrian School. He studied at the London School of Economics and became a professor at the University of Cape Town. He is particularly known for his works “The Factory System of the Early Nineteenth Century” (1925), The Theory of Collective Bargaining (1930), and The Strike-Threat System (1973).
Mises Institute, 2009
