4 ms·

>meddling in the "free market"? And what exactly kept the families from just packing up and leaving? It would seem that it must have offered a better value pro

by hueving 10y ago

>meddling in the "free market"? And what exactly kept the families from just packing up and leaving? It would seem that it must have offered a better value proposition that anything else if people chose to stay there. Unless they were slaves, your whole point is moot.

zepto 10y ago
Eh? Packing up and leaving with what money? Paying their debt with what?
- hueving 10y ago
  It costs very little leave comparatively. They don't need to pay the debt. If they have nothing, they just declare bankruptcy. If the ridiculous scenario the GP suggested actually worked, we would see, you know, examples of it.
  - ubernostrum 10y ago
    If the ridiculous scenario the GP suggested actually worked, we would see, you know, examples of it. You mean like all the documented examples people posted? (see https://news.ycombinator.com/item?id=12178695 https://news.ycombinator.com/item?id=12178695 for an example) Company towns enforcing debt slavery are an actual, genuine, true, real, factual part of US history. They existed. They really did work as described. People really did not manage to escape them. In several places it took literal armed revolution to break this system. So if your theory of economics somehow predicts that such things are impossible, the problem is with your theory of economics.
thasmin 10y ago
They couldn't leave because they had no money to pay for anything outside the company town.
dTal 10y ago
For a detailed explanation of how company towns led to debt slavery and what factors prevented people from just packing up and leaving, see the above comment.
true_religion 10y ago
Ah, in a perfectly 'free' market, there is still the possibility of inadequate and asymmetrical held information. In this case, people will not make the best decisions because they simply do not have the information to do so. For example, someone in a company town may not know that moving to the city will most definitely result in a better job, and out of fear of this ignorance, they continue to stay in a poor situation until it reaches a point where emotionally (rather than rationally), it becomes intolerable. To me, the one of the purposes of good governance is to ensure that information is spread widely, and citizens are well educated in order to understand and take advantage of it. Edit: To add to it... recruiting children, laying debt upon them, and ensuring they only know about 1 kind of job is exactly the kind of asymmetric information that we make laws to prevent the formation of.
MereInterest 10y ago
Sure, you can leave. You just need to settle your debt at the store before you do. We did give you that advance after all. And don't forget the rent that you're paying us, and how you're a few months behind. Maybe next year would be better. Save up, get out of debt, then leave town. Never mind the fact that we control both your income and your expenses, and will make sure that never happens.
- deleted 10y ago
  [deleted]
- hueving 10y ago
  If you're in debt you declare bankruptcy. This isn't 1500s in England.
  - true_religion 10y ago
    I'm not sure of the specifics, but in the US personal bankruptcy didn't exist in its present form until 1978. It's very likely, that it was incredibly difficult to file for bankruptcy in the era of company towns in the US---i.e. 1880 (first bankruptcy bill was filed in 1889) through 1934.
sitharus 10y ago
You underestimate the power these employers had over their employees. The company owned everything. The only way out without paying for company run transport, which you won't get without settling your debt, is to walk. Walkers are easily rounded up by debt collectors, and if you had a wife and children you wouldn't leave them. These towns were set up to create a supply of indentured labour.
FussyZeus 10y ago
Forgetting all the points already made, when you're going to make this argument for any given group of people who should "just" move (which by the way, how is it every single iteration of this argument involves the word "just"? As if throwing all your crap in a moving van and hitting the highway is just a thing you do some weekend when bored?) why don't you consider doing that yourself for five minutes? You'd almost certainly need a new job (though that's probably why you're moving), you'd never see any of your friends regularly again, you may be moving away from close family which could be good or bad depending, strong probability of losing a significant other, you'd almost certainly need a new bank or at least to change the addresses on all of your accounts, then you'd have to handle mail, any trusted experts in your area such as mechanics, repairmen, etc. you'd need to find new ones which is a hell of a thing to do in a strange town, and on and on and on. Plus there's always the chance that wherever you're moving TO is just a case of grass being greener across the fence and won't actually help anyway. THAT is why the word "just" does not belong in that argument at all.
EGreg 10y ago
More generally the problem with "free markets" and why they are never really free is switching costs: https://en.m.wikipedia.org/wiki/Switching_barriers https://en.m.wikipedia.org/wiki/Switching_barriers It is also why everyone is locked into sites like facebook (network effects) or cities like NYC even if they say they want to leave GREAT SCENE: http://m.youtube.com/watch?v=LWZk24MA7TE http://m.youtube.com/watch?v=LWZk24MA7TE
botfly 10y ago
Why don't they just eat cake?

by hueving 10y ago

zepto 10y ago

Eh? Packing up and leaving with what money? Paying their debt with what?

hueving 10y ago
It costs very little leave comparatively. They don't need to pay the debt. If they have nothing, they just declare bankruptcy. If the ridiculous scenario the GP suggested actually worked, we would see, you know, examples of it.
- ubernostrum 10y ago
  If the ridiculous scenario the GP suggested actually worked, we would see, you know, examples of it. You mean like all the documented examples people posted? (see https://news.ycombinator.com/item?id=12178695 https://news.ycombinator.com/item?id=12178695 for an example) Company towns enforcing debt slavery are an actual, genuine, true, real, factual part of US history. They existed. They really did work as described. People really did not manage to escape them. In several places it took literal armed revolution to break this system. So if your theory of economics somehow predicts that such things are impossible, the problem is with your theory of economics.

thasmin 10y ago

They couldn't leave because they had no money to pay for anything outside the company town.

dTal 10y ago

For a detailed explanation of how company towns led to debt slavery and what factors prevented people from just packing up and leaving, see the above comment.

true_religion 10y ago

Ah, in a perfectly 'free' market, there is still the possibility of inadequate and asymmetrical held information. In this case, people will not make the best decisions because they simply do not have the information to do so. For example, someone in a company town may not know that moving to the city will most definitely result in a better job, and out of fear of this ignorance, they continue to stay in a poor situation until it reaches a point where emotionally (rather than rationally), it becomes intolerable. To me, the one of the purposes of good governance is to ensure that information is spread widely, and citizens are well educated in order to understand and take advantage of it. Edit: To add to it... recruiting children, laying debt upon them, and ensuring they only know about 1 kind of job is exactly the kind of asymmetric information that we make laws to prevent the formation of.

MereInterest 10y ago

Sure, you can leave. You just need to settle your debt at the store before you do. We did give you that advance after all. And don't forget the rent that you're paying us, and how you're a few months behind. Maybe next year would be better. Save up, get out of debt, then leave town. Never mind the fact that we control both your income and your expenses, and will make sure that never happens.

deleted 10y ago
[deleted]
hueving 10y ago
If you're in debt you declare bankruptcy. This isn't 1500s in England.
- true_religion 10y ago
  I'm not sure of the specifics, but in the US personal bankruptcy didn't exist in its present form until 1978. It's very likely, that it was incredibly difficult to file for bankruptcy in the era of company towns in the US---i.e. 1880 (first bankruptcy bill was filed in 1889) through 1934.

sitharus 10y ago

You underestimate the power these employers had over their employees. The company owned everything. The only way out without paying for company run transport, which you won't get without settling your debt, is to walk. Walkers are easily rounded up by debt collectors, and if you had a wife and children you wouldn't leave them. These towns were set up to create a supply of indentured labour.

FussyZeus 10y ago

Forgetting all the points already made, when you're going to make this argument for any given group of people who should "just" move (which by the way, how is it every single iteration of this argument involves the word "just"? As if throwing all your crap in a moving van and hitting the highway is just a thing you do some weekend when bored?) why don't you consider doing that yourself for five minutes? You'd almost certainly need a new job (though that's probably why you're moving), you'd never see any of your friends regularly again, you may be moving away from close family which could be good or bad depending, strong probability of losing a significant other, you'd almost certainly need a new bank or at least to change the addresses on all of your accounts, then you'd have to handle mail, any trusted experts in your area such as mechanics, repairmen, etc. you'd need to find new ones which is a hell of a thing to do in a strange town, and on and on and on. Plus there's always the chance that wherever you're moving TO is just a case of grass being greener across the fence and won't actually help anyway. THAT is why the word "just" does not belong in that argument at all.

EGreg 10y ago

More generally the problem with "free markets" and why they are never really free is switching costs: https://en.m.wikipedia.org/wiki/Switching_barriers https://en.m.wikipedia.org/wiki/Switching_barriers It is also why everyone is locked into sites like facebook (network effects) or cities like NYC even if they say they want to leave GREAT SCENE: http://m.youtube.com/watch?v=LWZk24MA7TE http://m.youtube.com/watch?v=LWZk24MA7TE

botfly 10y ago

Why don't they just eat cake?