Unions – Past, Present, Future

Watt's steam engine at the lobby of the Higher...

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This will lead you to an unusual view of economic history. It’s a view I find credible. In a nutshell, it posits that during the 1930s, there was an amazing improvement in economic growth in the United States. Had it not been for World War II, the surprising prosperity of the 1950’s would have shown up earlier.

What is interesting is that the huge improvements of the 1930s can be attributed to technology and organization. Organization? Yep – which fits with one of my pet ideas. When the Industrial Revolution started, no one had any experience with large factory-based businesses. The management of these new entities was strictly by trial and error – and there were a lot of errors. Workers rightfully became resentful and the union movement was begun – for good and valid reasons. But over time, bad practices were identified and discarded. Only companies with good practices survived and prospered. By the late 1930s, company managements had a much better idea of how to organize work. Once work was properly organized, prosperity blossomed – or would have, had not war intervened. Unions can take a lot of the credit.

But by the 1970s, and certainly by the 1980s, good practices dominated. Unions began to lose their purpose and their appeal. The costs of unionization had exceeded the benefits to society.

Fast forward to today. Government employees are the last bastion of unionization, and I have sympathy for government workers. Having no competition, governmental bodies have little pressure to improve practices  – other than the unions. But I have no doubt that governments will eventually learn to outsource to competitive private firms. As that happens, unions will gradually disappear. Sure, some vestigial traces will be found in dinosaur companies like GM and Boeing, but this too shall pass. Unions were great when they were needed, but so was the telegraph.

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