(7) This great economic power is increasingly finding its outlet in political action, and will continue until its political strength matches its economic strength.

Not all the proponents of labor monopoly legislation would agree with this full statement, but one or more of these elements can be found in most statements of the problem.

OBJECTIVES OF PROPOSED LEGISLATION

How would the problems be solved? There is, of course, considerable diversity in the language and specific proposals of the many solutions suggested by those concerned. An evaluation of each of them would be impossible here and, in part, this is unnecessary for much of this has already been done by Professor Lester and others. An attempt will be made here only to group these legislative proposals by_broad objective, and to discuss a few specific, current proposals. The antimonopoly approach to labor legislation may follow one (or more) of four possible courses. It may seek (1) to limit the size of the bargaining unit, (2) to encourage competition between bargaining units, (3) to prohibit unions (and often employers) from specified acts and (4) to control the substantive results of collective bargaining.

The first of these objectives has been part of the Ball, Hartley and Lucas bills and others—that is, to eliminate national multiunit bargaining by prohibiting the NLRB from certifying a national union as a bargaining agent, and by preventing the national union from seeking to enforce contract uniformity among locals.

The Hartley measure provided that the NLRB could not certify the same individual as a representative of employees of competing employers. An exception was made for small local unions of less than 100 employees and less than 50 miles apart. Employers who would fix terms of employment in violation of this provision would be subject to antitrust prosecution.

Although the second objective of encouraging competition is implicit in proposals to reduce the size of bargaining units, Professor Harley L. Lutz has specifically proposed that unions be required to enter competitive bidding for the sale of labor services with employers free to gain the best bargaining from among competing suppliers. When an employer could not agree on terms with one union-supplier, he would be free to invite bids from another. 21

The third of the above-listed objectives is the most important type of legislation considered today. The legislative proposal which reportedly has the support of the United States Commerce Department is an amendment to Section 6 of the Clayton Act. That section permits union exemption from antitrust prosecution when they are pursuing their "legitimate objects." The proposed legislation would define out of "legitimate objects" union attempts to control or fix prices, to control production, to limit or restrict the areas in which goods may be bought or sold, to prevent the introduction and utilization of technological improvements or new processes, or to exclude use by the employer of certain products or services. Violations would open unions to criminal suits, civil suits by the government or private suits for up to triple damages.

See Industry-Wide Collective Bargaining: Promise or Menace (Boston, D. C. Heath and Company, 1950), pp. 36-37.

A milder bill, also seeking to achieve the objectives of the Attorney General's report, is said to be endorsed by the United States Justice Department. By a new antitrust law it would seek to block union pressure to restrict the type, kind or amount of products used or sold, and to influence their market price or the geographic area of their sale. However, it would only give the Attorney General power to seek court prohibition of such practices. No other enforcement or penalties would be provided.

The fourth possible objective-controlling the substantive results of bargaining is a relatively untouched area. Except for wartime controls and the union security provisions of the Taft-Hartley Act, there is virtually no legislation for this type of control and little is being sought.

It is interesting to observe that all three of our antitrust policies have embodied the third objective, that the demanded legislation has included the first three and that, with very limited exception, the fourth has not been seriously considered.

Given the inevitable trend toward greater national union control of bargaining, and the increasing advantages of multiunit bargaining, it seems clear today that with each passing year the possibility of passing legislation which embodies the first and second objectives becomes more and more remote. It is improbable that even an aroused Congress, fresh from the McClellan Committee hearings, would come as close to passing the Ball and Hartley bills today as it did a decade

ago.

This leaves only the third and fourth objectives. What of them? Of the third approach, we have already noted that national labor policy has moved in this direction aside from antimonopoly laws. Certainly most persons would agree that the practices pointed to in both discussed bills are undesirable, but an objection to the control via the proposed legislation arises. Evidence is not clear with respect to featherbedding and resisting technological change. Since the TaftHartley Act experience shows how difficult it is to deal legislatively with the featherbedding problem, it surely should not be injected into antitrust legislation, but should be handled in the National Labor Relations Act.

The other targets-price-fixing, production controls and limits on the sale of goods-raise other questions. To the extent that these involve direct product market intervention, they are already within the law. If they are not, there can be no serious objection to legislation bringing them within antitrust coverage. However, these will not prove to be the problem cases. Problems will arise from the fact that strong union labor market action may have product market consequences that come within the scope of the law. Would this bring antitrust law into the labor market where there are not direct product market controls? To circumvent this strong objection, the so-called Justice Department bill would not provide the usual antitrust sanctions; rather it would simply give the United States Attorney General power to ask that the offending act be prohibited. This compromise approach to these borderline cases gives the proposal considerable appeal, and if after study it is concluded that legislation is needed in these areas, it would seem to be worthy of careful consideration.

What of the fourth objective, that of direct controls on the union's wage-fixing? Given the great problems in such controls, and our

distaste for governmental control of markets, it is most unlikely that this approach would be seriously proposed soon. Clearly if a mild dose of inflation or unemployment are its alternatives, they will be accepted first. As long as unions are required to face unemployment as a possible result of their wage policies, a market solution to the "uneasy triangle" seems possible.

There is an element of irony in this situation. Clearly at bottom the labor monopoly issue reflects concern with union economic power, and with the apparent lack of a check on it. Yet it seems that legislative devices to reduce union strength by controlling the size of bargaining units and encouraging competition among bargaining units cannot be enacted, nor can legislation be won that goes beyond today's sound distinction between product and labor markets, and controls union activity sufficiently to reduce its economic strength. This leaves but the fourth alternative directly to control the results of bargaining which is as distasteful as any problem it might conceivably solve.

LABOR AND ANTITRUST

By Arthur J. Goldberg, General Counsel, Industrial Union Department,
AFL-CIO*

The ultimate objective of those who cry out against "labor monopoly" is to put our unions under the federal antitrust laws.

Should this objective ever be accomplished, organized labor will be weakened to a point of almost complete ineffectiveness. National and international unions will be prohibited from bargaining for their members at the plant level and all traces of companywide negotiating will be eliminated. All this will be done under the guise of monopoly busting.

Employees working for any of the multi-plant employers who dominate the American economy will be restrained from using their collective strength in bettering their wages and working conditions. Instead, workers will be forced to bargain directly with the plant where they are employed as if that plant was a separate entity, completely devoid of the employer's other interests.

For the great majority of organized workers, the enactment of such legislation will mean a return to the 19th Century when employers with vast holdings held tremendous economic power.

PROPAGANDA CAMPAIGN

Those who would return to the so-called "good old days" have resurrected the charge of "labor monopoly" as a front for their real goal. If they can convince the American public that labor is a monopoly, then "protecting the public interest" will necessitate placing this "monopoly" under restrictions of antitrust legislation.

Like the phrase "right to work," "labor monopoly" is now being drummed into the public mind as the first part of this anti-union campaign. Both phrases are equally misleading.

As "right to work" has nothing to do with a worker's right to a job, "labor monopoly" has no connection with our nation's concept of monopolistic practices.

The American public considers "monopoly" a bad word. We say that monopolies are bad-whether created by business organizations or by business organizations in conspiracy with labor organizations. Too often, however, we do not stop to analyze the reasons behind our condemnation of monopolies.

Essentially, our argument with monopoly stems from the fact that competition is economically desirable and should be the major regulating force in a free-enterprise economy.

We oppose monopolies because we regard it as undesirable for a manufacturer to have complete control over a product, enabling him to raise prices above those prevailing in a truly competitive system.

*AFL-CIO, Industrial Union Department, IUD Digest, volume 3, Winter 1958: 61-67.

We say that such control enables the manufacturer to gain excessive profits at the expense of the public.

NO COMPETITION

There are, however, areas where we recongize the fact that competition among suppliers is undesirable. For example, we do not object to one supplier of electric power, a single telephone service or a oneownership urban transportation system. Similarly, our patent laws give inventors protection against their competitors for a limited period of time.

In such areas, we do not ordinarily apply the epithet "monopoly," although in a technical sense monopoly does exist. We do not use the term because in these areas, the lack of competition is considered socially desirable.

The same type of thinking must also apply to the charge of "labor monopoly." If a labor union is to be considered an undesirable monopoly, it must be undesirable because it suppresses or destroys competition socially beneficial to our economy.

What type of competition does a labor union destroy? Competition among whom? These are questions that must be answered if the charge of "labor monopoly" is to be considered seriously.

Technically speaking, of course, any labor union is a monopoly in the limited sense that it eliminates competition between employees for the available jobs in a particular plant or industry. By concerted economic action, these workers attempt to increase the wage at which the employer will be able to purchase their labor.

If the monopoly concept is to be applied to unions-under this false notion-all labor organizations should be forbidden and replaced by periodic auctions at which jobs can be parceled out to those qualified persons willing to supply their labor at the lowest wage.

Unions must be eliminated, under this theory, because the very purpose of labor organizations is to limit the power of an employer to drive down wage rates and enforce substandard working conditions. If this is not the type of competition envisioned by those who speak the loudest of "labor monopolies," there would seem to be only two other types of competition they seek to encourage. These are: competition between unions to see which will supply labor at the lowest rate; and competition between employers in the sale of their products, based strictly on a difference in labor costs.

Neither of these alternatives will stand the test of careful scrutiny. No one really proposes to establish an economic system under which unions would compete with each other to supply labor at the lowest possible cost.

REWARD THE EFFICIENT

No responsible social critic believes that competition among manufacturers should be carried on, not on the basis of relative efficiency or ability to produce, but on the manufacturer's ability to obtain the lowest possible labor rates. The social advantage of competition is that it rewards the most efficient producer and thus guarantees the optimum use of our economic resources. There is no social advantage to be gained by allowing manufacturers to compete on the basis of sweatshop wages.

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