The real news here is how the Silicon Valley barons allegedly broke the law. The charge is that they actively colluded to stifle market forces. They collectively acted to prevent their workers from receiving the market-clearing wage. This means not only that they broke the law, and that they acted to undermine the market, but that they really don't think about the market the way libertarians claim to think about the market.This is a big deal. After all, if collective action can be used to improve economic outcomes then why are we against unions? Furthermore, if the tech industry doesn't believe in free markets then who does? I am suspicious if the argument is the financial services industry. Instead, it suggests that extreme views of market forces don't necessarily line up with how business works in practice. And that has huge implications for the moral interpretation of market outcomes as a pure measure of merit in a free and open market.
Friday, February 7, 2014
Silcon Valley collusion
Dean Baker:
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Joseph:
ReplyDeleteI think this is a generally accepted principle, that capitalism has a lot of advantages but most people don't want it for themselves. I think of macroeconomics as a sort of prisoner's dilemma: each of us would be happier with security, but if we all have security we don't get all those good things that come with capitalism. I am amused by this formulation because it treats an individualistic economic system as a public good that exists only because of cooperation and repeated play. But I think this view of capitalism is standard, or at least implicit, among economists.
Andrew, I completely agree. But it is helpful to remember this as it removes the notion that private companies are naturally more inclined to compete. It suggests regulated marketplaces and not anarcho-capitalism.
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