Firstly the executive summary: Trade unions have destroyed jobs, companies, whole industries. Their economic effect on Britain has been profound and disastrous. We are all far worse off because 0f them.
Now let’s look at the two ways of organising our economy.
Capitalism. Under this system an organisation can only survive in the market by looking after the customer. By delivering goods or services of the right quality at the right time at the right price. Otherwise they go bust.
Socialism. Under this system the state directs what goods and services will be delivered, what their quality will be and also the price. This cannot possibly exist in a market because competition would kill it, so monopolies are essential for it to function. Such organisations exist for the benefit of the state, not the customers. They cannot go bust because they can fix prices and rely on the state for subsidies of taxpayers money.
Trade unions really came to power during the disastrous Attlee government post WW2. They formed a part of what was called the Post War Consensus which imprinted socialism throughout all of Britain’s institutions. Despite Margaret Thatcher’s best efforts much of this is still in place today.
The function of unions was supposed to be looking after workers’ interests. To protect them from evil bosses. The reality was that unions used their power for political purposes. Many activists were blatant Marxists and communists. They wanted even more socialism and they used their members as pawns in their efforts to achieve this.
The Conservative governments of Churchill, Eden, Macmillan and Douglas Home were fairly socialist. They maintained the Post War Consensus and the damaging trade union power. Then came Labour and Harold Wilson and things became a lot worse. Ted Heath tried to fix things in one go with his Industrial Relations Act but this led to the three day week and the country wouldn’t back him, this brought back Wilson, then Callaghan and the Winter of Discontent, when the unions tried to bring down a democratically elected Labour government. Then, of course, Margaret Thatcher came to power and rescued Great Britain from most trade union evil.
The Winter of Discontent was at a time when governments tried to dictate what people were paid, the prices of goods in the shops, currency exchange rates and much more. The union leaders of the big nationalised industries (and some private industries) fought against this (even though it was pure socialism) in an effort to bring about their Communist utopia. Just about every public service went on strike, dead bodies were not buried, hospitals were closed to patients, mountains of garbage piled up in the streets, 29,474,000 working days were lost directly and many more indirectly. Something had to be done.
So let’s look at how unions exert their power:
- Withdrawing labour, striking. On a production line with thousands of people it only takes a handful to walk out and the whole line stops. In 1978 and 1979 Derek Robinson, a trade union activist at British Leyland, organised 523 walk-outs at Longbridge, costing about £200m in lost production. Hardly surprisingly the factory is no longer there and many thousands lost their jobs. The same applied throughout the car industry, it was destroyed. Only to be reborn when Margaret Thatcher brought Honda, Nissan and Toyota here in brand new factories with brand new workforces and minimum trade union power. Now our car industry is stronger than ever thanks to Margaret Thatcher and despite the historic trade unions malevolence.
- Picketing. Now largely illegal. This involved gangs of union thugs closing down a business by stopping goods and people getting in and out of the premises. Often the thugs didn’t even work for that business. During the Grunwick dispute 550 pickets were arrested as they used violence to try and close a film processing lab. At the Wapping print works 400+ police officers and members of the public were injured by violent union thugs, 1,000+ of whom were arrested.
- Demarcation. This meant that each employee was only allowed to do certain tasks. If they tried to do anything else there would quickly be industrial action. When my brother did his electrician’s apprenticeship one of his colleagues had worked at Cammell Laird shipyards before WW2. He said that pre war if he wanted to take a cable through a bulkhead he just did it in a few minutes. Post WW2 the trade unions said that he couldn’t do this, that several trades had to be involved to maintain demarcation. What took minutes now took half a day, something that wasn’t happening in Japan and Korea. Our ship building industry was trashed and hundreds of thousand of men lost their jobs.
- Manning levels. The unions said that it took so many people to do something and that no improvement in productivity was allowed. We had a coal industry that was largely digging coal at a cost that was much greater than world prices. Management bought the latest machinery to fix this and then the unions took industrial action till manning levels were maintained despite the new machinery, negating any productivity benefit. Eventually the governments (mainly Labour) could not sustain the losses and pits were closed. Whole communities were destroyed by the trade unions. The steel industry was forced to buy this expensive coal but had a manning problem of its own with three or more people employed for each real job. So the steel they sold to the car industry was either incredibly expensive or subsidised by the taxpayer. The steel industry was eventually rescued by privatisation, but by then it was so incredibly inefficient and uncompetitive that great swathes of it had to be closed. Once again huge numbers of jobs were destroyed by the unions.
- Working to rule and go slows. The unions had a book of rules that governed how fast (in other words very slow) each task could be done. They could thus force their will on the management by applying this and bringing production to a crawl. As with all these union actions this was paid for either by the taxpayer or the customer. In other words us.
It is easy now to see how socialism and the trade unions took the Great out of Britain and trashed the economy costing millions of jobs to satisfy their idiotic dogma. Other countries who started in a far worse condition, such as Japan and Germany, were easily able to overtake us with their economies built on capitalism, competition and markets.
So where are we today? Margaret Thatcher destroyed trade union power gradually, not in one go. It took eight pieces of legislation to get things under control. As this happened Great Britain blossomed, at long last our economy could start to recover from over thirty years of trade union destruction.
In private enterprise, capitalist companies there is no room for old style trade unions. Companies must be competitive to survive in the market by looking after the customer. Labour and capital must be used in the most effective manner possible. We all win with far better goods and services at far lower prices.
In our public monopolies we still have a disaster with workers being grossly overpaid and excessive manning levels being the norm. Residents of London know that regular Underground strikes are usual as the unions seek to stop managers from managing. And rail commuters know that season tickets are ridiculously expensive to pay for the incredible inefficiencies of a still largely nationalised train service.
It is a well proven fact that everything that government does it does badly, so the less government the better. There are still huge swathes of the economy (just under half) that are public sector and therefore fairly useless, often largely because 0f trade unions. The answer is for government to do as little as possible and for the market and capitalism to supply all our goods and services.
The transition from public to private ownership is painful as all the excessive workers need to be shaken out, in order that the business can be competitive and look after its customers properly. Margaret Thatcher’s privatisations led to a spike in unemployment, but this was a good thing as Great Britain started to become competitive again.
So what about protecting workers from evil bosses? Firstly this has been achieved largely by Conservative governments. From Robert Peel’s Factory Act of 1844 to the Enterprise and Regulatory Reform Act of 2013. It is in the best interests of everyone that a worker has fair and equitable terms and conditions.
The second measure is to remove employment protection, so bosses can get rid of any worker any time they want. This benefits everyone as it creates a true market in labour so people end up doing the job they are best suited to. Employers become far more willing to employ people in the first place who they will then not be stuck with. Employers have to give the remuneration and working conditions that the market dictates, competing for workers. The individual worker is empowered. And it works, many countries have this, including socialist ones like Denmark. It also makes trade unions largely irrelevant.