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There are some fantastic counter-arguments in there. For the record I think both sides have valid points: unions do make industries "sclerotic," but they also e
by api 11y ago
There are some fantastic counter-arguments in there. For the record I think both sides have valid points: unions do make industries "sclerotic," but they also exist to prevent a deflationary race to the bottom in wages. I'd reference Peter Thiel's comments on competition from Zero to One-- they apply just as well to labor as they do to companies.
"All workers can't be paid union wages" is perhaps true, but flattening the labor market completely would result in a squeezing of disposable income that would harm the economy overall not to mention the well being of its participants. As Thiel correctly argues: surpluses are required for pretty much anything outside the status quo to happen. If there are no corporate surpluses there can be no R&D or expansion. If there are no labor surpluses, there can be no adoption of anything new or interesting or novel. How many impoverished check-to-check workers will be purchasing an Oculus Rift or a Tesla?
A lot of the criticism of unions is also hypocritical. For example, corporate executives as a class are de-facto unionized. Why is it that companies pay absurd salaries for directors? Being a CEO is a hard job but it's not that hard. The reason companies hire superstar directors and pay them superstar wages isn't because these people are actually hundreds or thousands of times more effective. It's because these people are connected. They're plugged into the "old boy network" a.k.a. in the union and that confers a privileged position in relation to things like raising money, making big deals, protecting companies from government scrutiny (the CEOs union has a revolving door with government), etc. A great recent example would be Condi Rice being recruited for the Dropbox board. What expertise does she have in IT enterprise marketing, distributed systems, engineering team building, ...? None. But she's very connected in the "union."
I think it's reasonable to hypothesize that any time you see what appear to be above-market wages being paid for any form of labor, something union-like is going on even if it's not officially organized as such.
I also love the comparison of YC to a union. It's very much like one. An open question for pg:
Would he be willing to forego YC's union-like attributes? This would entail ceasing all collective bargaining with investors on the part of YC companies and refusing to permit companies to openly leverage the YC brand to increase their clout in the market. YC could still provide co-working space and mentorship but could not use any collective marketing, branding, or bargaining strategies to assist its companies in fund raising or growth.
Wouldn't it be a more efficient market if startups competed only on merit and negotiated in a flat market domain with investors?
- gobengo 11y agoIf {YC,CEOs} are like unions, then the corollary to OP is interesting "{YC,CEOs} have potential energy that could be released by startups."
- api 11y agoI believe this is true, and there probably are things that could be done to "disrupt" both these markets. YC (and to a lesser extent Silicon Valley itself) have union-like characteristics. Why is it that a bunch of companies working on distributed networks that are designed to permit easy global communication have to be located within 20 miles of each other and consequentially forced to spend sizable percentages of their investment capital propping up an absurd real estate market? This is being disrupted by things like AngelList that make it easier for startups in more reasonable local markets to raise capital on an open flat market. The death of Detroit wasn't caused by the death of cars. The automobile market has grown since the 1970s. It was caused by the global geo-diversification of the automobile industry. I wonder if the same thing could happen to SV (and YC) as a result of similar disruptive market shifts in the IT/Internet/tech markets. Since investors are to a great extent the customers in this market, the shift could come if investors see superior returns from companies outside the SV/YC orbit and decide that paying the Valley Tax is not justified. Also like Detroit, SV's cliquish quasi-unions are perhaps a bit smug and self-satisfied and don't see it coming. I'm not sure how you'd go about disrupting the "CEOs union." Let's make the question more concrete: what value does a union hire like Condi Rice (just using her as one example) bring to Dropbox and how might a startup replace that with something more efficient? I personally don't know enough about the high corporate world to know the answer, but I suspect a few around here do and might have some ideas. Maybe it would be possible to leverage your customer base. If you have something people love -- like AirBnb for example -- and are getting flak over it, which would be cheaper: to mobilize your customers or to hire a $200m/year CEO with government connections?
- vacri 11y agoI think it illustrates that while the tweet sounds insightful, it's actually nonsense and doesn't stand up to scrutiny. Besides, every industry has unions or entities that are similar to unions - even the software/startup industry - so it's basically saying 'startups can work anywhere'. I'm also curious to see how a startup would 'release the potential' held back by bus-drivers' or coal-miners' unions, such that there would cease to be such unions (ie: 'the sclerosis is removed'), without there being the reduction in wages/conditions that the follow-up tweet mentions it's not trying to pursue.