The End Of The Libertarian Fantasy

Author: January 23, 2012 11:28 am

The Libertarian devotion to the “free market” is absolute. To them, all government regulation is inherently bad because the “free market” will magically correct any and all abuses. Many is the conversation I’ve had where the claim is made that “I don’t need the government to protect wages because my skills are in demand and the market will determine my level of compensation.” Libertarians believe in all kinds of fairy tales just like this.

Well, that argument is now officially toast and it’s time to grow up. You see, in an ACTUAL free market, the most desirable skills for a given industry will force the various corporations to compete for those skills. That means higher pay and juicer benefits get offered. That means there is a constant struggle between rivals to poach the best workers from each other. For corporations to agree to NOT do this is called “wage fixing.” By not bidding against each other for the top talent, corporations collude to artificially suppress the wages of their workers. This not only goes directly against the concept of a “free market” but it’s illegal, too.


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Starting next week, a class-action civil lawsuit will continue in San Jose to determine if  several tech companies including Google, Apple, Pixar, Lucasfilm, Adobe, Intel, and Intuit conspired to eliminate competition for skilled labor. So much for Google’s motto of “Don’t be evil.”

The suit alleges that these companies had informal agreements with each other to not poach workers, not to make an offer if the worker approached them on their own and, worst of all, to inform the workers’ current employer that they had approached a competitor.

From TechCrunch.com:

In one particularly juicy piece of evidence from May 2005, Adobe’s CEO Bruce Chizen emailed Steve Jobs regarding “Recruitment of Apple Employees”. In the message, Adobe’s SVP for human resources writes “Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa.”

Additionally, documents state that there is “strong evidence that the companies knew about the other express agreements, patterned their own agreements off of them, and operated them concurrently with the others to accomplish the same objective.”

For example, Lori McAdams of Pixar wrote an internal email to others at Pixar  in April 2007 stating, “I just got off the phone with Danielle Lambert [of Apple], and we agreed that effective now, we’ll follow a Gentleman’s agreement with Apple that is similar to our Lucasfilm agreement.”

Does that sound like a “free market” to you? Where there is fair and open bidding for marketable skills? Or does it sound like corporations rigging the market to benefit only themselves?

Yes, Virgina, corporations break the law all the time. What kind if child thinks they wouldn’t do these things if there were no laws at all? I know that many Libertarians will read this realize that government regulation is the only answer to unrestrained corporate greed. Ah, who I kidding?! They’ll just click their heels together and chant, “Ron Paul loves FREEDOM! Ron Paul loves FREEDOM! Ron Paul loves FREEDOM!”, pretend that this never happened and the government is just trying to take over another industry.

Some people will never learn.

I'll regulate you! And your little corporation, too!

 

 

 

 

 

 

 

 

 

 

 

 

 

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11 Comments

  • Libertarianism: The “fu** you, I got mine” philosophy.

  • liz- No I agree. like you couldn’t just prosecute drunk drivers after they drive drunk.

  • @Lester.
    Here’s the best example of why we need regulatory agencies and not just laws alone against abuse:

    The Thalidomide sleep drug catastrophe. Look that name up on Wikipedia if you aren’t familiar with it.

    Sure there were laws at the time against causing harm to people – manslaughter, reckless endangerment, etc. Which always require that somebody has to experience harm before anybody can be charged. Meanwhile, fetuses were terribly harmed.

    People desided that after-the-fact “justice” was not good enough. They wanted to have better security BEFORE THE FACT of ingesting stuff. So the FOOD AND DRUG ADMIN was created. (Do a little googling on the kinds of non-food substances food producers used to routinely add as ingredients in foods before regulations. It will really turn your stomach!).

    So now most drugs (and food) are checked and regulated in all the ways I bet you take for granted, including that what the company SAYS is in there, is actually in there – in the amount that’s been tested for effectiveness and hopefully, to not be harmful.

    Of course nothing is perfect. We still need the courts for when companies (or even consumers) do wrong or make mistakes. Consumers also need to do some homework to. But there is only so much an ordinary person can do against multi-national corps.

    Whenever I read yet another news item about the kinds of things companies have and are now doing with drugs, food, etc., in China and elsewhere, I give fervent thanks for our FOOD AND DRUG Admin. and other time-tested, regulatory watchdogs and rules. Long may they serve!

  • good exchange in the comments

    It is already illegal. What would regulation do? Make it double illegal?

    Brett Koenig · R&D Software Engineer at The Government

    No in the Right’s perfect world these things would be illegal and legal action would be taken against such illegal activities. Instead of having regulators that are so close with the corporate world that they fail to effectively regulate, just remove the overhead of regulation and let the justice system do its job. I lost all faith in regulation during the Bernie Madoff fiasco. Not one person was fined or fired for overlooking what he was doing. Proper research by investors would have ended his run much earlier but people assumed that regulation stopped ponzi schemes.

    Let’s look at what regulation prevents businesses from doing. 1) Polluting the environment. You can already sue a company for polluting your property. 2) Endangering workers due to poor working conditions. You can sue over dangerous working conditions and if it is particularly egregious criminal action can be taken. 3) Sell dangerous products. Once again you can sue and it is criminall if intentional or reasonable care wasn’t exercised they would go to jail. 4) Defraud customers or stockholders. That is fraud and is illegal, you go to jail for that. 5) Cheat on taxes. Illegal and that should be the job of the IRS to investigate, not an additional entity. 6) Make easy money by messing with the stock market (i.e. insider trading). That is also fraud and is once again already illegal.

    So for regulation to be effective and catch it before the legal system does, we have to assume that these companies won’t lie to the regulators. That doesn’t seem like a reasonable assumption to me.

    • 1. Polluted property is still polluted, the continuing damages are rarely covered in settlements decided by the courts. A loss is always a loss, you never recover what is gone, you merely adapt and adjust. Pollution that causes permanent health damages can’t be ‘fixed’ by money.

      2. Endangering workers…suing is poor compensation for the damages, criminal action does nothing to improve the conditions of those damaged. Especially preventable damages.

      3. Dangerous products, once again damage is done which could be prevented.

      4. Fraud, lots of fraud has occurred in recent memory, imprisoning those who committed such frauds as Enron did nothing to improve the lives of those who suffered because of this fraud.

      5. Taxes. The IRS does investigate, and they also hire agencies to aid them in these investigations. The IRS is a collection agency not an investigation agency.

      6. Easy money…illegal does not prevent the activity nor does it seem to make much impression on those who would do so in the future.

      All your points are for after the fact of damages done. Evidently prevention in your view does not meet with the old saying of “An ounce of prevention is worth a pound of cure”.

      • well I think he’s saying the regulations aren’t working and can’t work. I had this huge discussion with some people abuot the FDA and homeopathic medicine which I knwo nothign about. They were all glad the FDA had come out against it and now there is something on homeopathic medicine that says “the FDA doesn’t think this works” or whatever. I wonder if that has had the slightest effect on it’s sales. So I don’t know, exactly how much are you actually accomplishing.

        I worked at a place once and a woman went downstairs to get somethign and hurt I have spotlights mean, it was a basement what are you gonna do have spotlights everywhere? the inspectors would never see somethign like that.

  • Aquarian Dreamer

    your talking about the old model corporations. that hasnt been true since the era of the robber barons and monopolistic trusts. learn your history moron(or did you decide to protest and burn any history book you could find instead of actually reading them?)

    • i understand exactly what you’re saying, but you can make your point without insult. there are ways to point out the gun in the room that are more effective.

      peace

    • “If there are separate rules and regulations for Corporations than for the average business owner, then it doesn’t work.”

      …So then it doesn’t work.
      That is the point. It will never be fair. Those with the gold make the rules. What if YOU don’t think something is fair. Who are you going to appeal to?

      I honestly understand where you are coming from, but free markets are a fantasy. It is competitive markets that matter and there are too many businesses who would prefer not to compete.

    • I’m not sure that the “era of robber barons” is over. A lot of libertarians don’t even admit that there were “robber barons” and call them “productive captains of industry” instead.

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