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

Dear Jathan, Thanks for your feedback. I appreciate it greatly. First and foremost, I would just like to clarify the PARAMETERS (boundaries) of this specific debate in context. In other words, I am NOT debating the "political side" moreso than it is the ECONOMIC side. Nevertheless, I have a QUICK comment on a legal ERROR that you made in reference to U.S. Labor laws: (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) This is a fundamental MISinterpretation of the labor laws. The United States has NEVER (in its history) passed COMPULSORY unionization laws where citizens are FORCED to join a union at the decree of the State. On the contrary, the "The National Labor Relations Act of 1938" (a.k.a. the "Wagner Act") that was signed by Pres. Franklin D. Roosevelt simply said that the Labor Relations Board of the Dept. of Labor would coodinate SECRET-ballot elections in all places of employment that were in the operation of "INTERstate commerce." If a simple-majority (51%) of each INDIVIDUAL worker voted to JOIN the union, then a Union would be organized (and recognized by Federal Law) and the employer was naturally obligated to collectively bargain and negotiate "in good faith." (b) However, if a majority of the INDIVIDUAL workers voted AGAINST joining the union, a union could NOT be formed. (c) Nevertheless, the CURRENT law is based on a revision (fatally-flawed in my judgment)to the "Wagner Act of 1938" when the Republican Congress override Pres. Truman's veto of the infamous Taft-Hartley Act of 1947 (a.k.a. the "Labor-Management Act"). While this law did NOT completely repeal the "Fair Labor Standards Act of 1938," but simply DE-Federalized it by allowing each individual State to "opt out" of jurisdiction of the Federal Law by becoming SO-CALLED "Right to Work" States. It also gave the Federal Government via the President the power and authority to put an injunction (stop) on a strike by workers in the FREE MARKET for 30 days. Ummm! So much for the illusive "free market," right?! I mean, how is it the perogative of the FEDERAL GOVERNMENT to intervene in a contract dispute between to individual citizens??? This is nothing more than CORPORATE Socialism!!! cf. http://en.wikipedia.org... cf. http://en.wikipedia.org... (2) "If, while working, they believe the wage has become insufficient, they will seek employment elsewhere or perhaps collectively bargain."--JA Here, your reasoning and logic is CIRCULAR. In other words, on the one hand, you are saying that if wages at a given place of employment is SUB-standard--[i.e. "Sub-standard" defined as BELOW the standard of living (inflation)], the employees can simply organize and "collectively bargain" with the employer for a livable wage. However, on the other hand, you are tending to support the notion that States have a right to pass so-called "right to work" laws which pretty much NULLIFIES any power that workers have in collective bargaining. For example, in "Right to Work" states like Colorado, Arizona, Alabama, etc., all the employer has to do when workers are striking is hire a truckload of ILLEGAL immigrants from Mexico or somewhere to break the picket line and work for $3-$5 an hour. 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. (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) First and foremost, you are confusing yourself by not understanding the specific NATURE of the Current labor laws (cf. #1). Nevertheless, I do admit that the "Classical Wage Theory of Economics" is, irrefutatbly, RATIONAL but there is a FUNDAMENTAL FLAW in that logic, nonetheless. (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%??? SOURCE: cf. Historical Statistics US (1976) series D-86 (http://en.wikipedia.org...) SOURCE: cf. http://www.commondreams.org... Ironically, today, ~60 years AFTER the passage of the Taft-Hartley Act when the Unionization rate is roughly 14%, the Unemployment Rate is nearly 5x HIGHER at ~5%?! best, Christian