Four Economic Perspectives on American Labor Law and the Problem of Social Conflict

One of the main purposes of American labor law has been to reduce conflict between employers and workers. This paper discusses the ways in which various doctrines might serve this purpose. Four theories are examined: bargaining with asymmetric information; conflict; herding; and trust. The conflict and herding models provide the most useful perspectives for understanding why conflict (as opposed to inefficiency) is a concern for the government, and how it might be reduced through law.