Tuesday, November 07, 2006

The problem with unions in Sweden and Norway

Let me first say that I am not against unions or collective bargaining. Economically, collective bargaining may or may not be beneficial to the workers. That depends on each case.

Just like the 19th century libertarian French economist, the brilliant Frédèric Bastiat, I think workers should be allowed to organize themselves. Of course, employers should be free not to hire union members, just like workers should be free not to work for employers who does not allow unions, and unions should be allowed to organize peaceful boycots against companies who does not allow unions.

I have no problems with unions qua unions. I do have problems, however, with coercion. That is why I have problems with today's Swedish and Norwegian unions (I here mainly think of the large ones, such as the Swedish LO and TCO, and the Norwegian LO).

What I'm speaking of is the fact that "Big Labor", the large unions, have in practice became a part of the state (you could say this about "Big Business", too, but that is not the subject of this post). Instead of keeping to their proper function -negotiating about wages and other working conditions with employers- those unions have allied themselves with the Swedish Social democratic worker's party and the Norwegian Labor party. Since those parties have been important in Sweden and Norway, especially in Sweden, where the Social democrats have been in power 61 of the last 70 years, they have been able to effect the legislation in those countries.

The unions didn't get this for free, of course. In both Sweden and Norway, LO has turned into a part of the Social democratic election machine, and I don't doubt that the Social democrats of both countries have LO to thank for getting votes from so many workers (although their number have been decreasing with the slow death of the industrial society).

I started this post with saying that I have nothing against unions or collective bargaining, and now I'm repeating that statement. What I see as the proper function of a union is to negotiate about wages and working conditions (which undoubtedly are necessary functions at least in some cases) with employers.

Take the unemployment benefits in Sweden. Unemployment benefits are received from something called an "a-kassa". There are many different "a-kassa"s, but almost all of them belong to different unions. To be able to get unemployment benefits, you have to be a member of an a-kassa. In theory, you can be a member of an a-kassa without being a member of the union it belongs to, but in practice, that means the union will put your request at the bottom of the pile of papers.

It doesn't end there. The a-kassa is said to be an insurance, however, it doesn't work live any sane insurance, since it's financed by the state (90% of it is financed by the state of Sweden), i.e. the tax-payers.

My problem with the unions of Sweden and Norway is that they are a part of the state apparatus.

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