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What Should Unions Do?

Research project Surprisingly, there is very little work on why there ought to be unions, or what they ought to do. Philosophers have neither analyzed of unionism, nor applied normative theories to this part of the economic system. These questions are central in contemporary political debate, which makes it important to examine the normative underpinning of the discussion.

First, why should there be trade unions? This project takes as its starting point the political philosopher John Rawls' theory of justice in order to formulate an argument for why unions are needed and what role they should play in society. The second question is: What should unions do? How should we make trade-offs between higher wages and unemployment, or between young and older people's interests? Finally, what attitude should the state have against unions? Should the state support them, or should it be neutral? This raises fundamental questions about the role of government in society and the economy.

Project overview

Project period:

2014-01-01 2018-12-31

Participating departments and units at Umeå University

Department of Historical, Philosophical and Religious studies

Research subject

Economics, Philosophy and philosophy of science

Project description

What Should Unions Do?

Introduction
Unions are among the most influential organizations in contemporary Swedish society. They occupy a position in civil society, but they are also closely connected to the state in several ways. For this reason, a common theme in Swedish political debate is the role and power of unions in society. Some argue that unions have too little influence, while others complain about their power. This question of political morality is the focus of the present project: What should unions do?

One might believe that this questions has been thoroughly researched, but surprisingly this is not so. There is of course plenty of work done on unions within disciplines like labour economics, sociology and work science. But within those fields that analyse normative questions, there is very little done. Philosophers and ethicists have not written about unions. There is lively debate on many issues related to work and working conditions, but discussion tends to focus on such things as rights in the workplace, workplace democracy, social justice in general or the conditions one ought to make on contracts – not unions. It is telling that the only paper in business ethics that deals directly with the question of unions makes the point that there is no work done in business ethics on unions. Of course, unions are mentioned in some normative works, but not serious effort has been made to investigate unions have be exerted.
It seems obvious that political philosophers and business ethicist should have something to say about these developments. There are, at present, many difficult, important and pressing normative questions that have to do with unions: how should the Laval case be handled? Ought there be mandatory unemployment insurance? Should Lagen om Anställningsskydd (LAS) be reformed? What role ought unions and employers’ associations play within the state? Are unions unfair to the unemployed? How should EU’s freedom of movement be interpreted? Economic policy is to a large extent union policy.

The title of the project is a deliberate pun on the name of the book the started contemporary work in the economics of unions - “What do unions do?” This is no doubt a very important question. But we also want to discuss the question “What should unions do?” I propose a project aimed at answering this question. It will result in six papers to be presented at international conferences and submitted for publication in international refereed journals.
Previous Research

The fact that little normative work has been done on unions leaves me with a challenge in this section. I will approach this challenge in two ways. First, I will sketch some possible positions on the role of unions, based on hints and preliminary accounts in the literature. Second, I will present an approach based on John Rawls theory of justice (and my previous research), which also will be an extrapolation of ideas developed in different areas. This Rawlsian account will then form the basis of my research proposal.

As unions are a part of civil society, one way of justifying the existence of unions would be to argue that they play an indispensable role in a democratic and productive society. This approach has been taken by Michael Sandel in some of his influential work. Democracy needs a strong civil society and unions are necessary for maintaining a democratic culture. This empirical hypothesis may be true, but it cannot serve as a complete normative theory of unions. In itself, it cannot say what kinds of unions there ought to be. Furthermore, it is of little help in deciding between different kinds of regulations of unions, or between regulating or not. Also, if we want to develop something along the lines of an ethic for unions, we seem to need more material to work with, than can be provide by Sandel’s communitarianism.

The most well-developed criticisms of unions also rely on empirical assumptions. In the normative work of Friedman and Hayek, they argue against unionism on the basis of the thought that such institutions lead to inefficiencies on the labour market and hence are detrimental to the common good. Even though such economics-based arguments are sometimes phrased in terms of rights, they rest their case on a consequentialist utilitarian political morality. Perhaps, one could see the disagreement between the communitarianism of Sandel and the libertarianism of Hayek and Friedman, as a disagreement about the consequences of unions. However, it seems that only thinking about consequences misses something important about unions. Many people think that we have a right to join and form unions, and that rights are trumps against consequentialist reasoning. One could argue that even if the consequences of forming a union are worse than not forming one, we would still be in our rights to do so. Perhaps we should, then, investigate if it is more promising to think about unions in terms of rights.

Some who argue against unionism, do so from a Lockean rights-based perspective. Such writers do not claim that people do not have the right to form voluntary associations, but rather that employers have a right to deny employment to prospective employees with union membership. This kind of rights-libertarianism, however, is found unacceptable by many because it denies that consequences have any role in justice. This means both that theory is consistent both with very poor outcomes and with radical inequality. It seems that we need a theory that incorporates a concern with rights with a concern for both consequences and equity.

One could think that Marxism would be one theory that would have much to say about unionism, and to a certain extent this is true. However, this theory is marked by a certain aversion to unions, since the reforms of the labor market that come with a high degree of union membership and influence tend to lead away from revolution. On another side of the political spectrum, catholic social teaching tends to favor unions for this reason and for the subsidiarity inherent in an economy with unions. But again, these theories look at unions from a macro perspective and would need much work to have direct implications for how unions ought to act. Hence, we need a theory that combines a macro and micro account of unions, while making room for equity, rights and efficiency.

In the literature there is an embryo of such a theory. Stuart White, along with colleagues, has developed a sketch of a Rawlsian theory of unions. Such a theory would include workplace rights and justify unions as a means of bettering the situation for the least advantage members of society. But there is quite a lot of work left to be done in order to have a full-fledged normative theory of unions. In this project, I intend to undertake that work.

In previous work, I have approached the issue of work from the perspective of justice and developed a liberal theory of just working conditions. More specifically and more relevantly in the present context, I have investigated the ethics of the employment contract with the help of John Rawls’s theory justice as fairness. A reason for focusing on Rawls’s work was that I found that there was a lack of connection between the discourse on the goal of good work and the debate on justice in political philosophy. Since much of contemporary political philosophy has been developed in response to Rawls, working with his theory allows one to see quite easily what other positions in the debate would imply regarding the issue of work and justice. This aspect of Rawls’s legacy will also be useful when developing a normative theory of unions.

This theory, however, deals only with justice within societies. Rawls distinguishes this from what he calls local justice, which concerns “principles applying directly to institutions and associations.” Rawls’s own theory of justice is lexically prior to local justice, which means that it constrains the local justice of the workplace, since it deals with how the fundamental societal institutions ought to be designed. I investigated the workplace from this perspective, but also the question of justice in cooperation within these institutions. The principles of local justice are to be set up for each institution on the basis of its own aims and purposes. The question of workplace justice is answered by adapting the framework of John Rawls’s political liberalism to the circumstances of local justice. I argued for the following principle of local justice:

Social and economic inequalities within workplaces in societies well-ordered by justice as fairness are to satisfy the conditions that they are to the greatest benefit of the least advantaged co-workers of the workplace, unless they are the result of choices for which agents ought to be held responsible, in which case, the relevant goods should be distributed according to desert.

I also discuss if consent can justify employer authority in the workplace. As a starting point, I use the standard economic explanation of the employment contract, which says that when parties meet to come to an employment agreement, they face transaction costs. These costs have to do with it being impossible to foresee all relevant future events and to form proper responses to these. They are facing a choice under ignorance, i.e., they do not know the full set of future possibilities. Therefore, they cannot agree on a complete contract, stating rules for each future contingency. Instead, they have to write a less determinate contract, which does not specify each party’s obligations in every conceivable eventuality. In the place of explicit conditions in a contract, one party (the employer) is given the authority to decide what to do when the unforeseen occurs. This is, then, what provides the motivation for authority in the firm. Now, what does the idea of justification by consent mean? To count as proper consent, a decision to enter into a contract must have been made under circumstances without coercion and with relevant knowledge. The argument I defend is, in a nutshell, the following: In order for any criterion concerning the level of information needed to achieve justification by consent to have any appeal, it must demand some level of knowledge above ignorance. I argue, with the help of theory developed by Phillip Pettit, that mechanisms must be in place that guarantee a real possibility to contest decisions and policies within the workplace, in order to achieve justification for employer authority. This part of my theory gives a justification for voice within the workplaces and sketches possible mechanism for ensuring such influences, thereby suggesting a role for unions.

Research Proposal
I believe that the theory developed in my thesis can be usefully applied to the issue of the justifiability of unionism. I propose to investigate three normative questions concerning unions.

1. Ought there be unions?
There are of course many explanations why there is such a phenomena as unions , but how can they be justified? It seems common to point in the direction of consequentialism when discussing this issue. Either unions have good consequences, in terms of, e.g., growth, or they do not. We could then figure out if there ought to be unions if we know the consequences of allowing them and of banning them. However, this line of reasoning seems to leave something important out of the picture, namely justice. Both proponents and opponents of unions, through history have talked in terms of fairness and justice, when debating this question. This is where a nearing of the social science of the labour market and political philosophy would be useful to political discussion and policy-making. The answer that I propose in my thesis to the question of social fit appears to be a good starting point for developing such an account.

2. What ought unions do?
Given that there ought to be unions, what should they do? Should they only focus on raising wages and improving working conditions, or should take on broader social responsibilities? Should unions in one sector take its effects on other sectors into account when choosing strategy? Too high demands in wage negations might force inflations to rise, is this something that unions should take responsibility? What demands are reasonable to put on employers? There are also moral issues that arise with respect to the members of unions. For instance, there may be conflicts of interest between younger and older members concerning the advisability of pushing for seniority privileges. The Vaxholm case illustrates that issues of international justice, may come into play within the unions sphere. Unions seems to be in a position of power within workplaces, this would imply that it would be useful to investigate what would be the equivalence of management’s business ethics for unions. Answers to such questions, must take into account the value of voice, distributive justice, property rights and social welfare. To answer this research question, one needs a theory of justice within institutions. My normative theory of workplace fit delivers such an account of justice. This theory would only be a starting point, since the economics of unions is different form the economics of the employment relationship for which the theory was developed. Furthermore, this account must be complemented, with the answers from the first research question and a theory of voice in the workplace.

3. What approach should the State take towards unions?
This question is much discussed both nationally in Sweden and on the EU level, since it has many important policy implications, both when it comes to labour policy as well as wider questions concerning if and how to organize a welfare state. There are several possible approaches that could be taken when answering this question. First, one might think that unions are unnecessary, any good they do could just as well be done through government regulations. There are counterarguments against this line of reasoning both from efficiency and from the value of voice within the workplace. Second, one may think that the state should support unions through the regulatory system. This might seem unfair to the owners of capital, or be thought of as inefficient. On the other hand, such policy might level the playing field between employers and employees. A third possible position is that the state should be neutral between labour and capital. Otto Kahn-Freund called this collective laissez faire. This approach may seem as doing too little to improve working conditions, and as being unfair to unions since it leaves employer in a position of power. In favour of this approach might speak that it respects liberty and leaves terms of contract up to the labour market participants. A fourth approach would be to argue that the state should oppose unions. This approach might be justified if it were true that unions have a very negative effect on growth, or if union actions are detrimental to non-union members. There could still be reasons of justice to support unions; such as unions being necessary for ensuring voice within the work place or that they are still efficient means to attain distributive justice. To evaluate these different approaches, one needs an account of the social science involved and a theory of justice, such as the one presented in my thesis. Moreover, one needs answer to the two first research questions.

In order to deliver precise answers to the three research questions, I propose the following papers.

a. Justice and Unions – A review paper
Since there is so little work done by political philosophers and ethicists on unions, it would be very useful for the political as well as the academic debate to have a paper collect the arguments put forth in favour and against unions. Such argumentation can be found in more applied work by economists and other social scientists. The results will be structured according to the framework presented in this application, i.e., why there should – or shouldn’t – be unions, what they should do, and what approach should the state take with respect to unions. Such a paper would also be a useful starting point for this project in general.

b. Unions and Social Justice
This paper would use the answer to the question of social fit in my thesis to investigate the justification of unions from a liberal perspective. I plan to apply the two Rawlsian principles to the social science of unions, and then present the implications of this theory of justice for unionism. Doing this means that I will evaluate unions according to a standard consisting of the values of liberty, opportunity and distributive justice. Adapting this concept to new circumstances will probably necessitate work on developing new conceptions of these values, and hence theoretical refinements. This work would also suggest moral limits on what unions should do. To develop such a theory will have the important consequence of presenting an account of justice with regards to unions, something that seems lacking in the literature. Moreover, this paper will then be a way of answering the first research question about unions: Why should there be unions?

c. Unions and Voice
This paper will be a companion piece to the paper on social justice and unions. In it, I will investigate the implications of the discussion in my thesis on contestability and voice for the project of justifying unions. This research will necessitate a through investigation of the literature on how unions function, since the economics of the employment contract is different from the economics of unions. The core question will be what role voice through unions ought to play within the workplace. This paper will present a further answer to the question of why there ought to be unions. Together these two papers will deal with what Freeman and Medoff calls the two faces of unionism: voice and efficiency. In this case efficiency would be understood as goal fulfilment in terms of justice and the common good.

d. What Should Unions Do? - The Ethics of Unions
This paper will use the theory of workplace fit, which I develop in my thesis, to investigate what unions should do. Since I also will have a theory regarding the societal role of unions, from the two previous papers, I will be able to answer the question of how unions should take the common good into account, but several important issues remain. How should unions approach employers? How should they make trade-offs when the interests of different members clash? The theory of my thesis is based on the value of reciprocity, which implies that the answer I will deliver will be able to present an account of how unions could act reciprocally towards members, employers and third parties. This paper, then, will provide an answer to my second research question – what should unions do?

e. The State and Unions
When the first two of my research questions have been answered, I will take on the question of how the state ought to act towards unions. As I noted above, there are four different approaches the state can take towards unions. It could take a dismissive stance, either because it infringes on rights, e.g., property rights, or because they lead to a lower level of social welfare. The state could be neutral with regards to what happens on the labour market, since, for instance, this would be in line with the right to association. A further possible approach would be that the state should support unions, since, e.g., they ensure the possibility of voice within organizations. A version of this approach would be that the state sees unionism as unnecessary, since the good that they might accomplish could just as easily be achieved through the use of direct regulations of the workplace. To evaluate these different approaches we would need to know what rights there are in the employment sphere - in addition to the relevant social science - and we would need an account of how to best understand the concept of the common good. With the first four paper of this research project written, I will have developed theory that could be used to make such judgements. The goal of this paper would be to present an argument for what approach the state should take towards unions, and thereby answering my third research question.

f. LAS and Justice
In this sixth paper, I want to use the results of the previous work within the project to evaluate the probably most discussed piece of Swedish legislation: LAS. This legislation has been severely criticized recently for, among other things, giving unions too much power over the employment relationship and for having detrimental effects for the least advantaged on the labour market. To evaluate such claims one need to have an account of what the proper bounds on union influence ought to be and a conception of what unions should use this influence for. On also needs a standard from which to evaluate effects on the least advantaged. The answers to my three research questions provide such an account, which would make this project useful for investigation of important policy issues.

Importance of the Project
The importance of this project is two-fold; theoretical and practical. It develops the political and philosophical theory of the justice society by applying and reconstructing an important and influential theory of justice. It rectifies the shortcoming that theoretical contemporary debate about the just society has proceeded without taking unions into account. Both political philosophy and business ethics need to incorporate unions in order to have useful and fully developed theories of the areas that concern. This project will present such a theory.

On the practical side, we need a theory to think about the kind of entity that unions are. Even though they are a part of civil society, there action and their regulation have far reaching political implications. We need a conception of civil society in general and of unions in particular that answer questions about the role of associations, such as unions, in society, about the ethics of unions, and of how the state should behave towards the organisations of civil society. This project provides a theory developed to help us answer such question, and thereby a principled account which can guide us in solving the social and political issues raised by civil society and by unions.

Previous Work
As noted above, I have investigated a wide variety of issues with relevance to the employment relationship. I have done empirical work on the efficiency of workplace inspections, as well as theoretical work on how to conceive of the notion of efficiency with regards to working conditions . Other publications have been on the evolutionary game theory of the workplace , and on what business ethics has to say about working conditions . I have also investigated the normative implications of the neo-classical theory of the market . This work has provided me with a strong background when it comes to the social science of the workplace. For this project, however, the most important part of my research is the normative theory of workplace justice developed in my thesis. This theory can explain what institutions there ought to be. It provides a principle of justice applicable within institutions and it justifies a demand for voice within the workplace. The theory is developed in a way that takes into account results in social science. Finally, it explains the relationship between justice within workplaces and justice in society generally.

In other words, it is clear that the model works for developing new insights into normative questions with relation to the workplace. In order to discuss the questions listed in the research proposal, one needs a theoretical underpinning that allows one to draw conclusions about a specific institution’s role on the economy and on how this institution should be run. This is the kind of theory I have developed.

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