A Libertarian Alternative to the EFCA

by Dan Clore

The EFCA (Employee Freedom of Choice Act) would allow workers to immediately unionize a workplace where 50+% of the workers have signed union cards, a process known as “card check”.

Employers and their front groups have waged a massive campaign against the EFCA in the mass media, claiming that it would eliminate secret ballots. This is not true: under the EFCA, while workers would no longer be required to hold a secret election after 50+% have signed union cards, they can still do so if they want to. But their employers would not have the power to require that they do so. They also fail to note that employers frequently abuse the election procedure, using it to buy time in which to fire workers likely to vote in favor of unionization and put other pressure on the workers against unionizing.

More principled critics, free-market advocates, have objected to the EFCA on the grounds that it represents government interference in the marketplace. While factually accurate, by itself this ignores the great amount of government interference in the market on behalf of employers. And that suggests a libertarian alternative to the EFCA.

I propose that any company that refuses to allow its workers to unionize be made ineligible to receive any benefits from government interference in the market on its behalf.

But for my purposes here, I'll ignore the vast majority of such government interference on behalf of employers, such as various forms of corporate welfare, protectionism, regulation that eliminates competitors, etc. etc. etc., and focus on a form of government interference that (1) benefits nearly all traditional companies; and (2) is directly relevant to the issue at hand, unionization.

The form of government interference in the marketplace on behalf of employers that I speak of is incorporation. When a government grants a charter of incorporation to companies, it creates by fiat a “collectivist legal entity”, or corporation. Among other things, this allows the many owners and investors in the company to be legally considered a single collective entity for business purposes when this is to their benefit, while at the same time granting them “limited liability” that considers them separate from the company when this helps them avoid responsibility for it.

This creates an asymmetrical situation in which employers enjoy the benefits of collective organization and representation, but can deny these benefits to their employees. Unionization, with its collective organization and representation for employees, makes this situation more symmetrical and thus fairer.

So, my suggestion for a libertarian alternative to the EFCA is simply this:

Any employer (company) that refuses to allow its employees to unionize, should be disallowed the charter of incorporation and its consequent benefits.

This would decrease, rather than increase, government interference in the marketplace (granting corporate charters constitutes such interference, while failing to do so does not), and therefore should please advocates of the free market.

It would also most likely lead to a much greater rate of unionization, as most employers would probably choose to recognize their workers' unions rather than forego the benefits of incorporation, and therefore should please union advocates.

Employers could not complain about being forced to recognize unions if this suggestion were instituted, as they could avoid the requirement by organizing as unincorporated businesses, such as single proprietorships and partnerships. (Worker-owned-and-controlled businesses, such as workers collectives and workers cooperatives, would also be exempt, as the workers are themselves their own employers.)

I don't expect this proposal to gain much traction, but it should at least serve to make readers think about the issues in a way more productive than the typical fare.

Additional note: Readers might like to use this column to check out the remarkable job that GoogleAds does matching advertisements to content. As I view them now, eight of twelve ads are either for sites promoting misinformation about the EFCA or for union-busting companies.

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