Earlier this year, there was a strike by the teacher’s union through many of the public universities in Pennsylvania. The administration was attempting to lower expenses due to decreasing enrollment, either by pay-cuts or health care, and the teacher’s union was trying to maintain their pay and benefits, as well as a few different details regarding advancement in the institution. The strike went for about three days before it was resolved. Students immediately began to take sides. Either they were in support of the union in the belief that it was important to their education, or they were angry at the union for holding the student's education hostage for a more advantageous contract.

This led to many debates as to the legitimacy of unions and collective bargaining, which is currently one of the most divisive issues out there. Some say that unions are a mandatory safeguards for workers in capitalism. Others say that unions are a malevolent force that uses bully tactics for profit.

Unions are intertwined with economics. They began to form during the late 19th century as a response to the poor working conditions that began to appear during the industrial revolution. The premise is to join together the workers in a certain industry and withhold labor until the demands are met. It follows the philosophy of “strength in numbers”. For the most part, this tactic was successful. The workers gained better conditions and better pay in response to the industry-wide protests. This would lend legitimacy to the idea that unions are necessary in a modern economy.

However, to understand the necessity of unions during that time period, one needs to understand the economic context. Industry looked very different back then. Steel and petroleum were almost completely owned by two respective companies. Several companies controlled most of the production in certain industries. The natural economic safeguard against poor working conditions, which was the competition between different employers for labor, was nullified due to there being a limited amount of places of employment.

So, in a system that was lacking competition between businesses, the competitive void needed to be filled by a competition against the employer and the employee. In a monopoly-free world, the relationship between these two groups in a mutually beneficial one. The employer pays the employee in exchange for labor, and every party involved is satisfied. However, in the event of a monopoly, the employer can run the wages and conditions as poor as possible due to the lack of options.

So it became that the effective response to a monopoly, was another monopoly. Labor is a commodity, and unions have leverage based on holding all that commodity. They counter the aggressive pricing of their employer, with the aggressive pricing of labor.

However, that was a long time ago. The modern economy has laws in place against the exercise of monopoly powers, and even laws against the simple creation of monopolies through mergers. The economic context has changed, yet unions remain. The monopolies on one of the most important commodities, labor, continue to this day.

This leads into a fundamental truth about free-market economics. This ideology produces the best possible outcome for all those involved when it is in the context of competition. That is the key. Competitive pricing is the safeguard against economic injustice. Economists understand this. This is why those laws are in place to protect the nature of competition in the economy. The persistence of unions in an economy that has these protections becomes redundant at its best, and harmful at its worst.

Yet, unions continue. This is why the administration in Pennsylvania found themselves dealing with lowered revenue, and being unable to cut from one of their most costly expenses in payroll. This is why the students suddenly found their education halted in a strange game of chicken that would level itself out in normal economic circumstances. In normal economics, those teachers who found their labor to be more valuable would find work at a different institution offering more competitive prices, those who didn’t would stay.

However, these actions could be justified when considering that the state holds a monopoly on low-cost education, as it does hold jurisdiction over many universities. This means that they also are the main employment of low-cost education labor. The state can usually win in competitive pricing, since it does not work for profit, but it also means the quality receives a downgrade. It's not entirely coincidence or prestige that all of the Ivy League schools are private universities.

In summation, in most industries, the concepts of unions and collective bargaining have outlived their usefulness, and are now beginning to hinder economic progress and stability. They had their purpose in their specific economic context, but are now both an obstacle and a redundancy.