Abstract Current theories of unions are mainly theories of what unions were and did rather than theories of what unions will be and will do. Thus, the purpose of this book is to help make economic thinking about unions in Europe more forward‐looking and to discuss the role that unions are likely to play in the changed economic environment of the new century. The volume consists of two reports that are the results of coordinated efforts by some of the most authoritative scholars in the field. The first study addresses a number of issues related to the question of how the primary role of trade unions—collective bargaining over wages and work conditions—is likely to evolve in the early decades of the new millennium. Starting from the widespread impression of a trend toward weakening union power, the main aspects considered by the analysis are membership, wage effects, organization and presence of unions, bargaining structure, macroeconomic performance, future scenarios, and strategies. The second study investigates the interactions between trade unions, welfare systems, and welfare reforms. The overall theme is the policy dilemma created by the many different activities of trade unions in the field of welfare provision, notably pension policies and unemployment protection. Throughout the analysis, a tension emerges between the role of unions as voice of atomistic agents and insurance providers—that may contribute to increasing aggregate welfare by remedying market failures—and as rent‐seeking monopolist, underlying the intergenerational conflicts present within unions. The studies point to measures and strategies enhancing this second efficient role of the unions that draws mainly on their capacity to internalize to the employer–employee relationships costs that would otherwise fall on society at large.
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