AbstractThe tenacious myth that a free economy and free society impoverish working people undergirds modern government interference in labor markets and legal privilege for adversarial labor unions. Managers are concerned about harmony and productivity at the shop floor level. The opposite characteristics of conflict, disco‐ordination and inefficiency are anathema. Most of the union difficulties managers must cope with at the shop floor level stem from a fundamental source, namely the philosophy of collectivism. This paper analyzes the fable of labor's disadvantage, wage determination under personal and impersonal conditions, public policy toward labor contracts and the role of businessmen in making labor markets operate more efficientl