Why trade unions are, fundamentally, anti-modern associations

One of the libertarian positions that are the least understood by non-libertarians is the disdain of trade unions. Are we not for the freedom of people to associate? This objection is fairly easy to shoot down if one understands what libertarians mean by freedom. By freedom libertarians mean the absence of use or credible threat of use, physical force or equivalent behavior. [1]

When an employer refuses to let her employees form a union under threat of dismissal, she does not restrict their freedom. In fact, she actually exercises her freedom not to associate with people on terms that she does not accept.

There is, however, a deeper, more interesting issue here. Some relatively market-friendly people among our fellow travellers will accept that employers not accepting trade unions technically does not violate their employees’ freedom but they may say that trade unions are beneficial, that they allow employees to better interact with employers, and that they are an inherent feature of the modern industrial order, and that interventionist big governments have merely distorted them.

However, I would like to claim that trade unions are, in fact, a fundamentally pre-modern form of association that emerged not as a necessary element of the modern world but as part of the still largely medieval people’s reaction to the Industrial Revolution whose rapid unfolding they could not comprehend.

Trade unions are anti-modern associations

Consider an older form of organization that trade unions, guilds. Guilds were associations of artisans and other economic agents outside of agriculture. Their raison d’être was three-fold: restrict entry into the relevant profession, create detailed rules as to how the production of the relevant good or service were to be conducted and also ensure a special legal status of the members before the political authority.

When one looks at trade unions carefully enough one will notice that they have retained all the three features of guilds, albeit in a less vivid form. Trade unions tend to resist the lowering of wages even during recessions and thus tend to restrict entry of new employees. They also aim at establishing uniform rules of employment within in a given industry. And finally, they essentially strive to endow their members with a special status vis-a-vis non-members and practitioners of other professions.

A pro-market defender of unions might object here that these features of unions merely result from the big governments’ involvement, just like the misdeeds of the Catholic Church and other official religious bodies came from their union with the state. If governments only ensured that employers do not fire union members, unions would merely represent employers before the employers. Isn’t representation a cool liberal idea dating back to the struggles from the 17th century onward in which liberals of the era happily took part?

Here, my response would be that liberals of the era were actually deeply mistaken. A true liberal must not accept the idea of representation either in politics or in the domain of civil association.

In politics, representation implies that the different groups of people represented have different political interests that are potentially all legitimate objects of pursuit. That in the political sphere the right ideal to strive for is some sort of balance among the conflicting interests, should there be conflict among them.

Libertarians, on the other hand, recognize that if everyone were politically rational they would realize that there best shot consists in defending equal negative liberty and property protection for all. This is not to say that there are no conflicting interests in society but rather, that in the longer run, attempts to resolve such interests politically tend to make everyone worse off than they would be without them.

It is, however, even more wrong to consider interest representation as the essence of civil associations such as for-profit corporations or non-profits. Legal entities do represent their members in a narrow sense, meaning that unless they clearly state otherwise, it is presumed that they agree to the actions that the legal entities executives take. But this does not and should not mean that say a corporation is a vehicle that gives its shareholders some special legal status vis-a-vis the world outside it. Through their membership in a joint-stock company shareholders do not acquire any rights that they did not have before. They are now merely able to jointly pursue the goal of producing something without enormous transaction costs.

On the other hand, employees’ fundamental goal is not to control production of a good or service. If it were such, they would have chosen to become sole proprietors or stockholders. Rather, their goal is to be able to exchange the application of the particular skills they have for predictable compensation. They, thus, fundamentally, do not need a common legal entity.

The perceived need for such an entity for employees comes from the mistaken pre-modern idea that society consists of clearly defined groups with partly opposing interests. Once this idea is rightly rejected, trade unions can be recognized for what they are — just another misguided reaction to modernity.

[1] For example, a clear instance of an equivalent behavior is when a person tells another person that a glass with some liquid is safe to drink while that glass, knowingly to the former contains poison.


PhD, economics (2018) from Aix-Marseille University, independent blockchain adoption consultant based in Aix-en-Provence, France, Email: daniilgor2004@gmail.com

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Daniil Gorbatenko

PhD, economics (2018) from Aix-Marseille University, independent blockchain adoption consultant based in Aix-en-Provence, France, Email: daniilgor2004@gmail.com