James Surowiecki's article on the mechanics, historical probabilities, and behavioral economics that go into a strike is fantastic. After running through research showing that strikes rarely end with large gains for workers, that both sides tend to systematically overstate the strength of their position, that the longer a strike goes on the less likely it is to end well, and that, in the end, strikes are rarely economically rational once you factor in the lost wages, Surowiecki gets to what I think is the exact right bottom line:
Justice matters quite a bit in strikes, which often turn more on questions of fairness than on strict economics. Fairness doesn't matter much in conventional economics, which assumes that, if you and I can make a deal leaving us both better off, we'll make it. But, in the real world, if the deal seems unfair to me I may very well reject it, even if doing so leaves me worse off. The quintessential example of this is the so-called ultimatum game, where participants offered a share of a ten-dollar bill by a fellow-participant will actually turn down the free money if they think their share isn't big enough. In the same way, a capuchin monkey who's being rewarded for working with another monkey will often refuse to participate if she sees her partner get a better reward. And in a series of experiments run by the economists Simon Gaechter and Ernst Fehr people prove willing to pay in order to punish those who act unfairly. Readiness to pay a price in order to enforce an idea of what is right is part of what keeps sides from settling: writers accept the loss of paychecks because they believe they deserve a cut of the revenue from their work, and producers accept the loss of business because they believe that TV shows and movies are their property. The paychecks and the profit-and-loss statements may indicate that the writers and the producers should be able to resolve their dispute quickly. But in labor relations the bottom line isn't always the bottom line.
Or, as Labor types would put it, strikes are about dignity and justice. There's also the argument that the threat of strikes, and the occasional demonstration of one, ensure better treatment in non-strike conditions (i.e, negotiations take place with the threat of a strike in the background), and so they're rational in a long-term sense, even if few individual strikes make much of a difference.
