Abstract

This article presents a normative epistemological argument for unions, developed from libertarian premises. According to Friedman, the state should set up rules for the market, whereas managers should focus on profits. On this view, business ethics can be handled by regulations, but Hayek’s theory of the market indicates that this position is problematic, since it relies on the state being able to collect the relevant ethical information. Hayek argued that a market system is more efficient than planned economies, since it handles information more efficiently. However, there is also reason to doubt that markets can provide the needed information. The price mechanism carries information solely about preferences, but ethics also concerns rights, voluntariness and needs. Moreover, Coase showed that inside firms there are no Hayekian price mechanisms. Firms are characterized by hierarchy, which means that both employers and employees may have incentives to not be forthcoming with information relevant information. The moral epistemology of Anderson, with an important role for civil society, is used to identify solutions to these informational problems. As a part of civil society, unions complement the market as a source of ethical information, and inside the firm they balance power and provide an avenue for voice.