Since the publication of the History of Trade Unionism (1894) by Sidney and Beatrice Webb, the predominant historical view is that a trade union “is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment.”[1] Karl Marx described trade unions thus: “The value of labour-power constitutes the conscious and explicit foundation of the trade unions, whose importance for the […] working class can scarcely be overestimated. The trade unions aim at nothing less than to prevent the reduction of wages below the level that is traditionally maintained in the various branches of industry. That is to say, they wish to prevent the price of labour-power from falling below its value” (Capital V1, 1867, p. 1069).
A modern definition by the Australian Bureau of Statistics states that a trade union is “an organization consisting predominantly of employees, the principal activities of which include the negotiation of rates of pay and conditions of employment for its members.”[4]
Yet historian R.A. Leeson, in United we Stand (1971), said:
Two conflicting views of the trade-union movement strove for ascendancy in the nineteenth century: one the defensive-restrictive guild-craft tradition passed down through journeymen’s clubs and friendly societies, … the other the aggressive-expansionist drive to unite all ‘labouring men and women’ for a ‘different order of things’.
Recent historical research by Bob James in Craft, Trade or Mystery (2001) puts forward the view that trade unions are part of a broader movement of benefit societies, which includes medieval guilds, Freemasons, Oddfellows, friendly societies, and other fraternal organizations.
The 18th century economist Adam Smith noted the imbalance in the rights of workers in regards to owners (or “masters”). In The Wealth of Nations, Book I, chapter 8, Smith wrote:
We rarely hear, it has been said, of the combination of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labor above their actual rate[.]
When workers combine, masters … never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers and journeymen.
As Smith noted, unions were illegal for many years in most countries, although Smith argued that it should remain illegal to fix wages or prices by employees or employers. There were severe penalties for attempting to organize unions, up to and including execution. Despite this, unions were formed and began to acquire political power, eventually resulting in a body of labour law that not only legalized organizing efforts, but codified the relationship between employers and those employees organized into unions.