Chapter 21. The Labor-Industrial Complex

“Labor and capital ought to get together,” said Mr. Hennessy. “How cud they get anny closer together thin their prisint clinch?” asked Mr. Dooley. “They’re so close together now that those that are-re between thim ar-re crushed to death.”

Finley Peter Dunne, Mr. Dooley on Ivrything and Ivrybody

THE VIRULENCE with which company management and organized labor join together to fight for government protection from foreign competition provides a striking illustration of coalescing power in action. It reflects the perception by both management and labor that immunity from competition confers sizable private benefits on both groups and, therefore, that government protection from competition is in their rational—albeit, short-run—mutual self-interest. In the longer run, however, such vertical collusion constitutes a mutual suicide pact between management and labor, a pact, we shall see, with long-lived economic costs to other industries and, ultimately, to society at large. It thus graphically illustrates the political and economic dangers that this kind of power poses in a representative democracy.