Is There A FLAW In the so-called "Classical Wage Theory of Economics [Austrian School]???"

Nice post, but I think I need to clarify some things. In your original posting you referenced the conservative argument. I do not know how else to approach this except as a political and economic debate, not to mention that I am now debating Hamilton :). (1) "by labor unions that do not receive the privilege of government sponsorship (that is to say union shop laws do not exist as they do now)."---JA a) The right to work laws exist precisely because of what I stipulated above. Before these laws it was a requirement of employment to join the union if a union existed at the company you were applying to. Right to work laws end this requirement...hence the name. That information comes from the same wikipedia sources you mentioned above. (2) "If, while working, they believe the wage has become insufficient, they will seek employment elsewhere or perhaps collectively bargain."--JA a) Let me clarify. I did not say the wage was substandard nor did I say it was substandard because of inflation (which if you read mises you know who is responsible for inflation, but that is an entirely different debate). I simply stated that if workers believe their wage had become insufficient they would logically attempt to rectify the situation. The conservative argument that you mentioned in your first posting is logical only in the context that a state is not a right to work state and thus employees are required to join the union. That is where the "power" of the union comes from. As I mentioned above and you kindly referred to, if the employer can legally hire other individuals, collective bargaining is not a smart idea. You are at once stating that labor laws do not protect unions or require new employees to join them (which they do and which right to work legislation is written specifically against), but at the same time states that do not have these laws are harming labor unions. I would say it is logically absurd to state both, that labor union laws do practically nothing to protect unions and that without them unions are impossible. b)"Nevertheless, it is not even PRACTICAL to say that workers can very easily find a job being offered by the Competition that pays "higher wages" b/c (remember) workers OUT-number the employer like 100 to 1 and the stiff competition amongst workers will AUTOMATICALLY drive down the cost of labor (wages) to the point that they will eventually ALL receive SUB-standard wages." I will simply state that I, myself, have been offered a higher wage from a competing company (and when I was doing menial labor). You should be aware that the money gained in the transaction between customers and a company is used to pay all employees. The relative numbers of employers to employees is a managements issue and in no way related to whether or not companies can hire employees. Stiff competition among workers is a result of excess supply or minimal demand, not a cause of it. Finally, that race to the bottom logic implies the progress of the last 200 years is in the end a farce. (3) "The unions, through the force of law, have created an artificially high wage for union workers because, and only because, union laws prevent companies from hiring others. This, in effect, reduces the number of supplies (legally), driving up the price, and ultimately resulting in fewer individuals hired (i.e. higher unemployment that would prevail otherwise)."--JA (a) Again, right to work legislation would not exist in certain states if the above was false. Wikipedia right to work and you will read exactly that. "Nevertheless, I do admit that the "Classical Wage Theory of Economics" is, irrefutatbly, RATIONAL but there is a FUNDAMENTAL FLAW in that logic, nonetheless." I played along earlier, but you need to identify what the fundamental flaw is. The only flaw I could possibly think of, if it is a flaw, would be the fact that wages tend to be "sticky" (a la Keynes). Although, I do not see that playing a big role in this debate. (b) "Case in point: If there is "no flaw" as you insist, can you explain the HISTORICAL FACT that when the Unionization Rate of American workers was at its PEAK at 35% in 1944, ironically the UNEMPLOYMENT RATE was at its LOWEST in American History at 1.2%???" We were fighting World War 2. That should be sufficient explanation. Besides I am hardly stating that all unemployment is due to unions. I already referenced a natural rate of unemployment earlier.