Don't forget that the initial response to labor price-gouging capital was to hire armed goons (like the Pinkertons) to break the strikes. The fight between capital and labor that ultimately led to something more balanced wasn't a purely voluntary economic transaction - there was plenty of violence involved on both sides.

And don't forget that a big part of why many Western countries started to invest more into welfare is because after 1917, their governments realized that the alternative could well be an armed uprising, and that they need to keep their citizens sufficiently content to prevent that - even if that means they have to force the wealthy to share more of their income.

(Note, I'm not saying that Soviets somehow achieved better results. The point is solely that the threat of a socialist/communist revolution was a significant factor in capitalist countries shifting away from unregulated capitalism and towards welfare state.)

> Labor price-gouging capital is a beautiful sight to see. Usually only capital remembers it can do that.

This was a pleasure to read, although it made me wonder what the optimal unit of labor is to still have a functioning competitive market. If all capital was controlled by one entity, no market could exist -- that's basically why the US has anti-trust laws. The same is true for labor. Seems like for each market there must be an optimal unit of labor (number of workers in a union, for example), to balance well-being of an individual worker with functioning of the market. Hard problem, though.

Yes, the problems that monopoly creates are analogous problems to the problems with large unions. The union management seeks to increase their own power, and the larger the union, the more possibility to abuse that power. However, the upside of having an institutional way to apply political pressure for the benefit of the worker can definitely outweigh whatever abuses and inefficiencies most unions create.