Existing trade unions were made illegal, and workers were denied the right of collectively bargaining over wages and working conditions. The new law allowed only weak trade unions and forced them to compete with each other rather than to unite in order to improve the competitive position of labor vis-à-vis owners and management. Collective bargaining rights were hampered in several ways. Basic wage increases offsetting inflation were mandated by law, and individuals were granted the right to bargain for wages and conditions regardless of “collective” agreements, although employees in both the public and service sectors were exempted from this rule.

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 1586