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Warren Wang
Warren escaped Communist China a decade ago to pursue education in Australia. Now a finance businessman, he passionately defends libertarian freedoms.
In light of recent scandals surrounding the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU), it is time to consider a more fundamental issue: the very existence of unions in modern society. Unions like the CFMEU are outdated organisations that do more harm than good to the people they claim to protect. From a libertarian perspective, unions disrupt voluntary employer-employee relationships, infringe on individual liberties, and perpetuate corruption and inefficiency. The existence of unions like the CFMEU is contrary to the principles of a free market and individual autonomy.
Libertarian economists and thinkers have extensively argued that unions are inherently coercive institutions that distort labour markets and undermine individual freedom. Essentially, unions are a political organisation rather than an economic organisation, aiming at controlling the labour market with coercive and political means, rather than through voluntary exchange and cooperation.
Distortion of Labour Markets
Fundamentally, unions disrupt the natural balance between employers and employees. Unions often demand higher wages and better working conditions than what the market can sustainably provide, which inevitably leads to inefficiencies and can drive businesses to reduce their workforce. As Murray Rothbard once stated, “unions cannot determine wage rates without putting companies out of business and causing unemployment.” The adversarial relationships unions create between employers and employees often lead to strikes, reduced productivity, and a hostile work environment. Employers are forced to comply with union demands or face the threat of collective action, which is economically damaging.
Without unions, the labour market would be more efficient, fair, and prosperous.
Infringement on Individual Liberty
Unions impose collective bargaining agreements on all workers, regardless of individual preferences. This coercive nature undermines the voluntary nature of employment contracts. One of the most fundamental arguments against unions is that they violate the very basic principle of freedom of association, as well as the freedom not to associate. In a free market, employment terms are negotiated based on mutual benefit. Employers offer wages and conditions that reflect the value of the work, and employees accept jobs that meet their needs and preferences. This voluntary exchange is the cornerstone of a free and prosperous society.
Perpetuation of Corruption and Inefficiency
The CFMEU scandal is just another recent prime example of how unions can become corrupt and self-serving. Instead of protecting workers, the CFMEU has been involved in criminal activities, kickback schemes, and internal conflicts that harm the very people they are supposed to help. This corruption is not an isolated incident but a symptom of the broader problem with unions. With power comes corruption. It is no surprise that unions become corrupt over time as that is part of their nature.
The Case for Abolishing Unions
Given all the fundamental problems with unions, the natural conclusion is that we should abolish them entirely. Without unions, the labour market would be more efficient, fair, and prosperous. Without unions, employers and employees would engage in direct negotiations, fostering a more cooperative and mutually beneficial relationship. Without unions, businesses would operate more efficiently, leading to greater innovation, job creation, and economic growth.
Unions like the CFMEU are outdated organisations that do more harm than good to the people they claim to protect.
Furthermore, the abolition of unions would protect individual freedoms. Workers would and should have the freedom to negotiate their terms of employment based on their unique needs and circumstances, without being forced into collective agreements that may not serve their interests. This would lead to a more diverse and dynamic labour market, where individuals are free to pursue opportunities that best align with their skills and personal situations.
Moreover, many industries with either very weak or nominal unions, such as hospitality, IT, and the gig economy, flourish due to less intervention from unions, resulting in a freer labour market. For example, the tech industry has seen tremendous growth and innovation partly because it is less burdened by union constraints, allowing for more flexible and dynamic employment practices. The gig economy, encompassing platforms like Uber, demonstrates how flexible work arrangements can be managed without the involvement or interference of unions. This, I believe, represents the future of employment, where every individual acts as their own boss, making the existence of unions unnecessary. These examples highlight how a freer labour market can lead to industry growth and innovation, benefiting both employers and employees.
Conclusion
In summary, unions like the CFMEU should have no place in a modern, free-market economy. They distort labour markets, infringe on individual liberties, and perpetuate corruption and inefficiency. From a libertarian perspective, the abolition of unions would lead to a more prosperous, fair, and free society. By allowing voluntary employer-employee relationships to flourish, we can create a more dynamic and innovative economy that benefits everyone.
This article was originally published by Liberty Itch.
