internalizing the external cost of union behavior. 

Wrote about this back in the day when Assar Lindbeck died, and I had just spent a summer research fellowship looking at models of union behavior. 
https://thedailyeconomy.org/article/assar-lindbeck-swedens-greatest-economist-died-90-years-old/

Including the unemployed workers in the union ranks is brilliant, NGL

SimpleStacker

some workers realize (consciously or subconciously), that the quickest way for them to increase their allocation of resources is to bargain for it, via political activism and strikes.  The institutional rules allow for this, so they take advantage of it.  They do this out of self interest, not any high minded solidarity about workers uniting.

The Meissner account of post-war Europe I mention is pretty revealing. The Scandi countries did this extremely well: large, industry-wide unions, central wage negotiations (also including the unemployed) managed to credibly commit to 

 take advantage of capitalist investing (=hold back wage demands, minimize strike activity)... so you got lots of investments and, over time, wage increases from productivity.

UK on the other hand, had smaller unions, workplace based, and did 

 incorporate the unemployed. Hence the crazy strikes of the 1970s. Scandi countries grew faster and are, I believe to this day, richer.

the_stacker_muse

BooksAndArticles

econ

Wittgenstein, Economists’ Empathy, and an Unpublished Tale of a Fishing Boat

denlillaapan

> some workers realize (consciously or subconciously), that the quickest way for them to increase their allocation of resources is to bargain for it, via political activism and strikes.  The institutional rules allow for this, so they take advantage of it.  They do this out of self interest, not any high minded solidarity about workers uniting.

The Meissner account of post-war Europe I mention is pretty revealing. The Scandi countries did this extremely well: large, industry-wide unions, central wage negotiations (also including the unemployed) managed to credibly commit to _not_ take advantage of capitalist investing (=hold back wage demands, minimize strike activity)... so you got lots of investments and, over time, wage increases from productivity. 

UK on the other hand, had smaller unions, workplace based, and did _not_ incorporate the unemployed. Hence the crazy strikes of the 1970s. Scandi countries grew faster and are, I believe to this day, richer.