215
Toward a Free-Market Union Law
Charles W. Baird
F. A. Hayek and W. H. Hutt wrote extensively about the malign
economic and social effects of the special privileges and immunities
granted by governments to labor unions, but they wrote much less
about what a free-market unionism might look like. They argued that
all legislation that has conferred coercive powers on unions should be
repealed, but they did not propose any specific free-market union
legislation to take its place. Perhaps they thought that if all offending
legislation were repealed there would be no need for any union-spe-
cific legislation. The common law of property, contract, and tort
would suffice. Nevertheless, it is difficult in American politics to
replace something with nothing. Therefore, I think it is useful, albeit
constructivist, to propose a free-market alternative to the Norris-
LaGuardia Act of 1932 (NLA) and the National Labor Relations Act
of 1935 as amended in 1947 (NLRA). Perhaps the chief value of such
a proposal is to make explicit what the ordinary law of property, con-
tract and tort implies for the labor market and the role of unions
therein. New Zealand’s 1991 Employment Contracts Act (ECA) is a
good, but imperfect, guide in this endeavor.
A free market is one in which interactions between people take
place in the context of voluntary exchange. The principal role for
government in a free market is to enforce the rules of voluntary
exchange. In what follows, I will set out my formulation of the crite-
ria for voluntary exchange in any market, including the labor market,
Cato Journal, Vol. 30, No. 1 (Winter 2010). Copyright © Cato Institute. All rights
reserved.
Charles W. Baird is Professor of Economics (Emeritus) at California State
University, East Bay.
216
Cato Journal
and consider what these criteria imply for strikes and “yellow-dog”
(union-free) contracts. Next, I will show how the NLA and the
NLRA violate those criteria. Then I will briefly examine what Hayek
and Hutt had to say about voluntary unionism. Finally, I w