Democracy or Oligarchy? Models of Union Governance in the UK, Germany and US

Abstract

What explains the governance patterns of trade unions? A lingering theory suggests there is an ‘iron law of oligarchy’ afflicting social democratic parties in general, and trade unions in particular. Its first proponent, Robert Michels, contended in 1911 that as administration and technology become more complex, experts with dominant personalities are needed to steer the masses. Inevitably, what start as democratic groups become oligarchies. This is the ‘iron law’. This article explains why Michels’ theory was always empty. Instead, it builds a theory of organisational change based on evidence. Over the 20th century, trade unions became central to modern democratic life. There were many models of union governance, and what made a union ‘democratic’ was strongly contested. In three countries with some of the longest histories, the UK, Germany and US, two main models prevailed, even though legal regulation differed. Either a union’s executive became directly accountable to members in a periodic vote (the UK, partly the US), or members would elect delegates, which in turn appointed the executive (Germany, partly the US). When law had no specific regulation, the evidence shows that, unlike the ‘oligarchy’ theory, unions stuck with governance structures they knew best. This usually matched the country’s political system. There is no iron law, just behavioural tendencies to stick to the status quo. People genuinely seek to create and follow models they think are right, and union governance is open to constant improvement. On balance, the evidence suggests that unions are most effective in achieving their goals when executives are accountable through a direct representative vote by members.

Keywords: Trade Union, Labor Union, Democracy, Oligarchy, Michels, Iron Law, Fascism, Behavioural Psychology, Status Quo Bias, Models, Conscious Choice

JEL Classification: K31, J01, J51, J53, J58