Centre for Ecomonic Performance

Friedrich Hayek wrote frequently on the consequences of trade unions, usually highly critically, making large claims about their very adverse economic and social impact. A close analysis of his work demonstrates that his judgments do not rest on a theory of trade unions which is clearly different from a conventional treatment; nor does he anywhere present any relevant new empirical work. Further, his methodological writings seem to disbar him from making the kind of empirical claims on trade unions that feature throughout his writings. The conclusion is that he was morally so offended by the extraordinary legal immunities which the trade unions had acquired that his judgment deserted him, so that he descended into a series of wholly untenable empirical assertions. His significant influence on thinking and policy on industrial relations matters, at least in the UK, looks to have been based far more on powerful emotions than on science. This paper was produced as part of the Centre's Programme on Industrial Relations Programme HAYEK ON TRADE UNIONS: SOCIAL PHILOSPHER OR PROPAGANDIST?