Legally Certified Monopolists

May 2, 1949

The Taft-Hartley Act is essentially nothing more than an amended Wagner Act. Like that act, it in effect turns the government itself into a union-organizing agency. It is no accident that under the Taft-Hartley Act union membership has been at peak levels and that wage rates have gone up faster either than living costs or man-hour productivity.

Like the Wagner Act, the Taft-Hartley Act abridges management’s freedom to manage. It compels the employer to “bargain collectively” with a particular union leader, no matter how unreasonable his demands may be. This requirement to “bargain” has never been precisely defined. In spite of specific limiting clauses introduced by the Taft-Hartley Act, and specific denials by the Labor Board, this phrase has been in practice interpreted to mean the making of concessions. For if the employer, in response to union demands, simply says “No,” or simply proposes, say, in response to a demand for a wage increase of 15 percent, a wage reduction of 15 percent, and then sits tight, how can he be said to be bargaining “in good faith”?

More importantly, if he cannot reach an agreement with the particular leader of the union certified by the NLRB, there is no one else with whom he is legally permitted to reach an agreement. What would we expect the result to be if a manufacturer were legally permitted to bargain with only one supplier of a raw material, and were legally forbidden to negotiate with any other supplier if he could not reach a workable agreement with that one?

It is this exclusive bargaining provision, common to the Wagner and the Taft-Hartley Acts, and to the Administration and Wood bills, that has built up the tremendous economic and political power of the Lewises and Murrays, the Greens and Petrillos. These men have been turned into huge legally certified monopolists. They have been made, in effect, legal arms of the Government in their negotiations with management.

Instead of reexamining the dubious economic and legal principle behind this provision, the authors of the Taft-Hartley Act retained it, and then tried to limit and offset its most obviously harmful effects. The Wagner Act enormously increased the power and use of the strike weapon. For it took most of the risks out of strikes and deprived the employer of most of his previous economic power to combat strikes. The authors of the Taft-Hartley Act sought to offset this by putting in the hands of the government some of the anti-strike powers that had been stricken from the hands of the employer. And they sought to “balance” some of the coercions on the employer by corresponding coercions on the unions. For example, they made it “an unfair labor practice” for a union as well as an employer “to refuse to bargain collectively.”

But the moment an effort was made to put any limits whatever on the power of union officials, these officials, who had not only acquiesced in but demanded the one-sided government coercions on employers, denounced the two-sided provisions as a “slave labor” law. Therefore the present servile Administration bill, while continuing to impose upon employers a compulsory duty to bargain collectively with unions, would once more exempt unions from any corresponding obligation. “In short,” as the House minority report correctly sums it up, the Administration bill “would have the effect of encouraging, fostering, and nurturing uncontrolled union monopolies in the U.S., and of conferring upon union officials unbridled and unconfined monopolistic power.”

But that the Administration bill is so much worse than the Taft-Hartley Act does not mean that even the latter is good. By retaining the Wagner Act basic principles, it has in fact encouraged and made it possible for unions to impose excessive wage and other demands. These have already led to unemployment in some lines and threaten to bring it in others. There is little prospect that pending legislation will change this situation.