THE LABOR POLICY OF THE FREE SOCIETY by SYLVESTER PETRO PROFESSOR OF LAW NEW YORK UNIVERSITY SCHOOL OF LAW THE RONALD PRESS COMPANY • NEW YORK Copyright, (c), 1957, by THE RONALD PRESS COMPANY All Rights Reserved The text of this publication or any part thereof may not be reproduced in. any manner whatsoever without permission in writing from the publisher. 5c Library of Congress Catalog Card Number: 57-6822 PRINTED IN THE UNITED STATES OF AMERICA To LUDWIG VON MISES and WILLIAM WINSLOW CROSSKEY Since that moment when man first looked upon himself and saw the image of God, he has struggled against all the powers of nature and the supernatural, and against all the tyrannies of his fellow man, to fulfill the promise in that image. He has lived to the full, in pleasure and pain, the gregarious life to which half of his instincts and appetites committed him. And in response to the other half, he has striven in every element on earth, in the skies above the earth and in the waters under the earth, to express himself as an individual. —Whitney Griswold PREFACE I have two objectives in offering this book to the public. I wish to define the essential features of the free society, and to advance certain proposals in the field of labor relations. These two objectives have, as it seems to me, many things in common, not the least of which is their common relevance to those promi- nent current problems which set our era apart in history. While we speak frequently of the free society, there is reason to believe that its essential nature is not clearly perceived by all its pro- ponents. Yet we ought to know what it is that we proclaim and espouse when we oppose communism, fascism, and totalitarian- ism. I have, therefore, attempted here to restate and to reaffirm in the modern context the structural elements of the free society. As it happens, such a restatement also serves well as a standard with which to measure the labor policy of the United States. For I assume that our labor policy, like all our policies, should be the policy appropriate to a free society. No part of the world of action or ideas lies closer to the central issues of our times than do the problems and conflicts in labor relations. It does not matter how one describes the great current issues. One may say that the heart of the matter lies in the con- flict between individual freedom and the increasing activity of the state; or in the autarchic tendencies of so many nations; or in the struggle between limited government and totalitarianism; or in the subordination of the rule of law to executive authority. Others may think that the foremost problem of our age is posed by the poorer citizens and peoples who wish to share the wealth of the richer citizens and peoples through forcible means when others fail. There are those who insist that the most pressing problem of the times is that of creating an effective and endur- ing international order, the great society of nations. Regardless of the manner of statement, labor relations affect VI PREFACE or are a more or less intimate part of the great world problems. I have tried here to provide a means of understanding the rela- tionship between some of the key problems in labor relations and the forces in the world which have brought about the present state of affairs. For labor relations are the world of today in small. Studying this field, we shall see all the distortions of truth and history so characteristic of the modern world. Thus the common version of our labor law history casts the labor union in the role of the victim of enterprisers and their alleged servitors, the federal and state judiciaries. We hear repeatedly that for most of American history the working man committed a crime in joining a union; that the law discriminated against labor unions; that, until very recently, scarcely a strike could be called without having a court issue an injunction against it; that without unions the individual working man is a mere pawn and always treated as such by employers; that the courage of union officials is the only force which stands between workers and exploitation. Some of these allegations of the current orthodoxy cannot be dealt with by resort to historical fact. That workers are absolutely dependent upon union representation; that only union leaders stand between workers and exploitation—these are theoretical, hypothetical arguments which cannot be either proved or dis- proved solely on the basis of fact or history. Since they are theo- retical assertions, they can be dealt with only in terms of logic and theory. And so the first part of this book attempts to estab- lish a set of standards against which arguments on the question may be judged in a more satisfactory way. A straightforward account of the facts of our labor law history will suffice to dispel the factual inaccuracies in the remainder of these allegations. As we shall see in the following pages, there is little or no authority for the proposition that it was at any time illegal for workers to form and join unions. On the contrary, the best and most reliable authority has recognized the legal right to form unions for more than a hundred years. We shall see that, far from discriminating against unions, the law has struggled in- effectively—up to the very present—merely in the attempt to bring trade unions within the juridical structure, so that the same rules could be applied to them which apply to all other persons and entities in society. We shall see that the peaceful PREFACE Vll strike for higher wages or better working conditions has always been privileged in the United States; and that here, too, the legal situation has been exactly the opposite of what our history says it was. Unions have always had a specially privileged status. Finally, we shall see that, not unions, but nonunion men and employers have been denied adequate legal protection against coercion and violence. Correction of the historical record is one of the main objectives of the second part of this book, where an attempt is made to present as briefly as possible the major features of current labor law and policy in the United States in an accurate historical perspective. The author shares the convictions that a free-market, private- enterprise, private-property civilization is the best guarantor of the well-being of every man, including workingmen; that well- run unions can help the operation of a free-market economy and in this way can add to the well-being of workers; that badly operated unions, while they cannot by themselves destroy the free market, may make it function poorly enough, or by ill- advised propaganda bring it into such disrepute as to provoke its gradual and unconscious abandonment, piece by piece. Holding these convictions, the author urges the correction of the antisocial practices of trade unions. Fortunately this is a thing which can be done—it is a job for legal institutions already in being and for laws which are well understood.' No great new administrative agencies, no complicated new codes, are necessary. It is necessary only to apply to unions, with adaptations made necessary by certain of their special characteristics, the same laws and legal institutions which apply to everyone else in a well- run, free society. Today, the progress of civilization requires that unions, with their capacity for good, be brought fully within the family of constructive, law-abiding citizens. The third part of this book offers proposals for a code of labor laws consistent with the goals and methods of a free and productive society. X- * * This book is dedicated to the two most remarkable contem- porary thinkers of my acquaintance, William Winslow Crosskey, Professor of Law at the University of Chicago, and Ludwig von Mises, Professor of Economics at New York University. The Vlll PREFACE greatest product of the tradition which Crosskey symbolizes is the Constitution of the United States. The product of the tra- dition Mises represents is the market economy. From these two men and their antecedents, from the Constitution of the United States, and from the market economy have come the ideas which I have attempted to put together in elaborating the theory of the free society and in making the labor policy proposals which are to be found in Part III of this book. To these sources I must add those countless judges in England and America, living and dead, who, in writing reasoned opinions in the cases they have decided over the centuries, have been developing the most extraordinary instrument of reason that the world has ever known—the com- mon law. Sylvester Petro New York January, 1957 CONTENTS Part I The Free Society CHAPTER PAGE 1 SOCIETY AND THE GOALS OF MAN 3 2 FREEDOM, WELL-BEING, AND SECURITY 10 3 THE BASIC INSTITUTION OF THE FREE SOCIETY: PERSONAL FREEDOM 24 4 OPERATING PRINCIPLES: PRIVATE PROPERTY AND FREEDOM OF CONTRACT 37 5 PROPERTY RIGHTS, HUMAN RIGHTS, AND THE STATE . 53 6 VOLUNTARY ASSOCIATIONS AND THE STATE 71 7 TRADE UNIONS IN THE FREE SOCIETY 97 Part II Evolution of Labor Law and Policy in the United States 8 EVOLUTION OF LABOR POLICY: THE PRINCIPLE OF FREE EMPLOYEE CHOICE 125 9 FREE EMPLOYEE CHOICE AND EMPLOYER COERCION . 138 10 UNION ORGANIZATIONAL METHODS AND THE FREE CHOICE OF EMPLOYEES 149 11 THE LAW GOVERNING UNION ORGANIZATIONAL METHODS 160 ix X CONTENTS CHAPTER PAGE 12 COLLECTIVE BARGAINING, THE LAW, AND THE FREE MARKET 172 13 COLLECTIVE BARGAINING IN THE GENERAL JURIDICAL STRUCTURE 182 14 COLLECTIVE BARGAINING, VIOLENT UNION ACTION, AND THE LAW 189 15 COLLECTIVE BARGAINING AND NONVIOLENT UNION ACTION 202 16 COLLECTIVE BARGAINING AND THE INDIVIDUAL EMPLOYEE 218 Part III A Labor Policy for the United States 17 UNIONS OF THEIR OWN CHOOSING 235 18 FREE COLLECTIVE BARGAINING 248 19 ENFORCEMENT OF LABOR POLICY: A SENSIBLE JURIDICAL STRUCTURE 262 NOTES 291 INDEX 327 Part I THE FREE SOCIETY Society is something temporary and ephemeral; man, how- ever, is always man.