One of the effects of inflation is to stimulate the activity and growth of labor unions. A worker whose wages do not rise as rapidly as the prices of products go up will suffer a decrease in "real wages." The people who make their living as managers of labor unions, "spokesmen for the workers," are very quick to tell potential union members about the benefits of joining together to fight inflation by fighting the boss. In the past few years, the AFL-CIO has focused increasing attention on the "public sector." Most cities and towns now have a teachers union which calls a strike at the beginning of every school year.

For once, Marxist theory coincides with reality, given the context of rapid inflation. In the government labor market, the demand for labor does not decrease as its cost increases—the demand for workers is calculated on a "headcount" basis, rather than a "marginal productivity" basis. Further, the government employers are no more motivated by altruism than anybody else (in spite of election day rhetoric), and government jobs are soft and secure enough that employees think twice before quitting to look elsewhere for higher wages. The appeal of unionization, therefore, "to fight for a pay increase" actually makes sense given widespread inflation.

Organizing a labor union, however, brings up the issue of "compulsory membership." In the private sector, this might be the employer's choice; in the public sector, it is the labor organizer's hustle. Just like a miniature government, a labor union finances itself by "taxation" (membership dues) and total revenue is maximized if payment of dues is compulsory. Moreover, if a strike were called, the union would want to enforce its "laws" (membership rules) on every employee—in this case expulsion or fines against those who cross the picket line. If membership in the union is compulsory, expulsion from the union is the same as expulsion from the job. Freedom of choice be damned.

To combat the "compulsory membership" and "expulsion from the job" problems of teachers, a new political action committee has been formed. Concerned Educators Against Forced Unionism, 8316 Arlington Blvd. (U.S. 50), Suite 600, Fairfax, VA 22030 is a task force for the defense of academic freedom. The issue of academic freedom arises because of the near monopoly which government schools enjoy. The issue is not "what shall be taught," but "who shall be allowed to teach." The Concerned Educators Against Forced Unionism intends to focus efforts on legislation which will guarantee the right to refuse to join a teachers union and to refuse to participate in a teachers strike. In conjunction with the Right to Work Legal Defense Foundation, it intends to take initiative in the courts on behalf of teachers who are discriminated against because of union non-membership.


The proposition that compulsory membership is necessary for the supply of "collective goods" and services, such as the management services of the union organizers, is challenged in the latest issue of The Journal of Law and Economics, published by the University of Chicago Law School, 1111 East 60th Street, Chicago, IL 60637, at $9.00 per year. In a technical discussion of the theory of "collective goods," Prof. Earl D. Brubaker of the University of Wisconsin argues that the available evidence does not support the "free rider" hypothesis, which is the basis—often presented emotionally—for compulsory membership and compulsory payment of dues to labor unions. ("Free Ride, Free Revelation, or Golden Rule?" in J.L.E., April 1975, pp. 147-162.)

The Journal of Law and Economics merits a FRONTLINES report of its own as probably the most important scholarly journal specializing in the area of government regulation and the theoretical basis for such control. A remarkable number of important economic and legal studies have appeared in the J.L.E. since it was started in 1958. The current wave of favorable research towards deregulation was initiated by the J.L.E. in its early days, and many articles have appeared under the bylines of Milton Friedman, Yale Brozen, Sam Peltzman, George Stigler, and others. The current issue includes "The History of the Postal Monopoly in the United States," by Prof. George L. Priest, and "Property Rights in Radiation: An Alternative Approach to Radio Frequency Allocation," by Jora R. Minasian.


The issue of labor unions for government employees should concern average citizens, not just libertarians, for reasons quite different from the "threat" of strikes by school teachers, policemen, and firemen. Indeed, a public employee strike might be the perfect opportunity to abandon the government activity and accept bids from private enterprise for the same services. The government union, however, is a ready-made political machine in any community. Worse, it is a political machine with a vested interest in higher taxes and increased government control.

When the collection of union dues becomes an automatic part of the payroll process, the union managers avoid the need to persuade the members to pay each month. When membership in the union is compulsory, the managers avoid the need to sell the members on the benefits of membership each day. Just like any economic activity which is free of the need to sell its services on a continuing, voluntary basis, the management of the labor union is able to indulge in a few "office luxuries," such as additional organizing personnel whose principal duties are political. In the government unions, it becomes centrally important that certain politicians get elected—in order to make the task of collective bargaining easier after the election.

For those who scoff at the political impact "paid organizers" can have in an election campaign, take a look at the success story which Mayor Daley of Chicago has written by means of "patronage workers." Interestingly enough, Mayor Daley is opposed to collective bargaining in the city of Chicago—he knows a threat when he sees one.

The antidote to public sector labor unions might be the growing popularity of "taxpayers unions"—with the implicit threat of a taxpayers' strike. The U.S. Taxpayers Union seems to have the largest, most aggressive organization this writer has seen. (Other tax revolt organizations are encouraged to send me information on their activities.) Information on the activities of the various taxpayers unions can be obtained by subscribing to the Tax Strike News, Box 1089, Porterville, CA 93257, $11.00 per year.

Tax fighters come in all sizes and shapes—from the feisty, grass roots, blue collar variety, as in the U.S.T.U. to the polished, Washington-based National Taxpayers Union, 625 East Capitol, S.E., Washington DC 20003. Jim Davidson of the N.T.U. has achieved a remarkable degree of public exposure for the libertarian position by means of "inside research" on Federal grant boondoggles, and by publicizing these via direct-solicitation mail fundraising. Davidson was the inspiration behind Senator Proxmire's monthly "golden fleece" awards, to the government agency or program which has wasted the most money each month. We expect bigger and better things from Davidson in the future, now that he is a contributor to the "View from the Top" feature of Penthouse magazine.

Following upon the near-success of Gov. Reagan's tax limitation proposal in California, the National Tax Limitation Committee, Suite 701, 555 Capitol Mall, Sacramento, CA 95814 is working with groups across the nation to promote legislation and State constitutional amendments to limit the percentage of the income of citizens that the government can grab. At the national level, Senator Carl Curtis has introduced S.J.Res. 55, "Proposing an amendment to the Constitution of the United States relative to the balancing of the budget." Even as proposals with no hope of passage, this sort of legislative initiative becomes a focal point for taxpayer pressure. Write your Congressman, as well as anybody else who may influence public opinion. Much more on tax resistance in future columns.

Next month we propose to analyze the recent campaigns of Ray Cunningham and Lloyd Taylor in San Francisco. The municipal unions, and former Mayor Alioto's sell-out following the recent strike, were major issues in the election. Cunningham, running for mayor, came in eighth out of 11 candidates, with 1069 votes, while Taylor garnered 10,988 votes in his campaign for one of five Supervisor positions, placing 20th among 29 candidates.