Labor Unions and the Problem of Monopoly : Collective Bargaining & Market Governance 1890-Present

When trade unionists in the US look backward, they see better times. During the golden age of American capitalism, 1945-1974, the leading firms in the most important sectors of the economy—steel, automobiles, and electrical equipment manufacturing—were union and paid relatively high wages. They were also among the largest companies in the world and competed in oligopolistic markets. Many observers credit oligopoly with creating the conditions for high-road labor relations, by softening competitive pressures and allowing rent-sharing with workers. However, oligopoly is not the only form of market governance supportive of high-road labor relations. For example, wages in the decentralized trucking industry equaled those of steel or auto workers during the golden age. Large corporations are powerful corporations after all, and they have proved virtually impervious to unionization in US history outside the brief window of government-supported unionization, 1936-1948. While some unions in oligopolistic basic industry were able to bargain for a share of oligopoly profits during the golden age, overwhelming employer power prevented them from influencing intra-firm management prerogatives or interfirm market governance. Looking to industries where unions did play a strong role in market governance—especially the bituminous coal, garment manufacturing, and trucking industries—this paper shows how unions leveraged power over market governance into bargaining power over wages and working conditions. In the current age of vertical dis-integration and fissured workplaces, union power over market governance is more important to shop-floor power than ever