Elgar Companion to Hayekian Economics
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Elgar Companion to Hayekian Economics

Edited by Roger W. Garrison and Norman Barry

The Elgar Companion to Hayekian Economics provides an in-depth treatment of Friedrich August von Hayek’s economic thought from his technical economics of the 1920s and 1930s to his broader views on the spontaneous order of a free society. Taken together, the chapters show evidence both of continuity of thought and of significant changes in focus.
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Chapter 14: Hayek on labor unions

Charles W. Baird


It is probably . . . impossible in our time for a student to be a true friend of labor and to have the reputation of being one. (Hayek, [1959] 1967, p. 294) As this epigraph implies, unions have a much better reputation than they deserve. Even today (2012) a majority of the general public thinks that labor unions are the best friend that any working man or woman could have. That is simply wrong, and in Hayek’s writings on unions, from Monetary Nationalism and International Stability (see Hayek, [1937] 1972, pp. 21–2) wherein he first noted the inflationary dangers of collective bargaining, through 1980s Unemployment and the Unions (Hayek, [1980] 1984), which Arthur Seldon characterized as the summation of Hayek’s teaching on unions (Seldon, [1980] 1984, p. 9), Hayek explained why. He argued that while unions benefited some workers it was always at the expense of other workers and that as a whole, unions have made workers significantly worse off than they would otherwise have been. Moreover, he saw unions as they were (and, in large measure, as they still are) in Britain and the US as major threats to the free economy as well as the free society in general. The malign consequences of coercive unionism examined by Hayek fall into two broad categories: effects on the economy and conflicts with the rule of law. In both, Hayek saw immense problems which could only be solved by major reforms of public policy.

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