Prompted by Jackson, Machlup agreed to read a paper on "Monopolistic Wage Determination as a Part of the General Problem of Monopoly" at the Economic Institute in January 1947 (Machlup 1947). In this paper, Machlup argued that American unions did not learn the hard lessons from the past: there was no evidence they were ready to moderate their wage demands. To the contrary, he raised the specter of the economic and political danger of spreading syndicalism and of a labor monopoly, in particular on control over real wages. He also looked askance at government regulation of wage rates resulting from collective bargaining. His proposals for reform were to break down large unions to smaller size (by prohibiting industrywide wage bargaining) and to prohibit state intervention during the wage-bargaining process. … To restore full employment, Machlup suggests curbing labor monopoly power in four ways: educating union leaders, prohibiting state aid to unions, eliminating closed shop rules, and, in particular, downsizing the average union. The downsizing proposal, which Machlup considered politically feasible, sought to limit the union size to that of the plant level and to prohibit any combination between different unions.

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 968