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How anti-trust laws are used to stop independent contractors from organizing [pdf]
- Xunxi 6y agoThat is quite the size of an entire book and a timely submission for a weekend skim for those interested. I did skip to the conclusion, typical ambiguous wrap-up, to say the least.
- daniel-s 6y agoI will confess to not making it to the end of the introduction, but this is a general comment about anti-trust and monopoly laws. They're made up and arbitrary. The best definition I have seen is that someone is a monopoly if they haven't made enough campaign contributions and weild enough political influence to appease government bureaucrats from shaking them down. The exception is for a monopoly created by the government itself by legislation/regulation giving someone special privileges or banning competitors. I challenge a reply to this comment for a definition of monopoly that rational+reasonable people could use to unambiguously differentiate between business that are and are not a monopoly (asside from the one I gave above). I like Walter Block's joke on monopolies. He starts with 3 prisoners in a gulag who are chatting amongst themselves about how they got there. First guy, "I was always late to work. I was accused of depriving the Soviet people of my labour, so was sent to the gulag." The second guy, "gosh, I was always early. They accused me of being selfish and ambitious: trying to brown-nose and get ahead of my fellow workers, so I got sent here too." The last guy, "I was always precisely on time. They said I must be a spy and accused me of having a western wristwatch." The same joke applies to monopolies. Three businessmen are all accused of being monopolists and are sent to prison. First guy, "I was charging more than my peers. They accused me of price gauging." Second guy, "I was charging less than everybody else, they accused me of undercutting the competition." Last guy, "I charged exactly the same as my competitors: I got charged with collusion and participation in a cartel."
- missedthecue 6y agoIndeed, the Chicago school has held for the last 60 years or so that Anti-Trust legislation produces more monopolies than it prevents.
- pixl97 6y agoStrongly defining a monopoly sets the bar for a company to be tenthousanths of an inch below it. Rather than avoid abusive behaviour a corporation will maximize it in the full extent the law allows. Companies are rarely leaders, most boardrooms are execs asking what their competitors are doing so they can mimic it.
- cryptonector 6y agoRather than get a challenge, you're getting downvotes :(
- burfog 6y agoWe unambiguously differentiate by setting a threshold. Does your water heater produce hot water? We can decide this unambiguously if you provide your required temperature and the actual temperature you are getting. Despite the lack of a universal definition of "hot", we can unambiguously determine if your water is hot or not. For your water heater, you probably set the threshold based on how much you enjoy your shower, how well your dishes get clean, and so on. For a monopoly, we can set the threshold at the point where there is an unacceptable amount of market control. Measurement of market control is more difficult than measurement of water temperature, but that is no excuse to give up. We measure beauty, intelligence, bad driving, poverty, odor, and misery.
- raincom 6y agoWell, at least measuring temperature doesn't depend on the K-street, campaign contributions, or ideologies.
- daniel-s 6y agoYou have provided no definition. "Unacceptable amount of market control" defines nothing at all. In fact, it only supports what I said. "Unacceptable" will be what the bureaucrat/politician has decided he wants to go after. Perhaps you want to try again?
- burfog 6y agoDefine "pain", so that we know if opiates are appropriate. (or we give them to everybody who asks?) Define "reckless driving", so we know who the police should stop and who should be charged with that crime. (or we just give up on that concept?) Define "nuisance odor", so we can fine or arrest people who make entire neighborhoods unlivable. (or we let a condo smell like a huge industrial pig farm?) Define "mentally disabled", so that we can pursue rape charges (due to inability to consent) or appoint a financial caretaker. (or we just let the profoundly unintelligent get abused?) Life and law are full of fuzzy judgement. Pretending otherwise is a terrible idea.
- pdonis 6y agoYour hot water heater can be set at a different temperature from mine if we have different personal preferences for how hot the water should be. In other words, nobody gets to declare by fiat what an "unacceptable" level of hot is and force everyone to set their hot water heaters accordingly. The corresponding concept in "market control" is a free market, where nobody gets to declare by fiat what the threshold is for an "unacceptable" level of market control. So your analogy leads us to the conclusion that antitrust laws should be abolished.
- mannykannot 6y agoThe joke is on you. Specifically, actor 2, who charges less than the competitors. Unless actor 2 is both a) selling at less than cost and b) either a de-facto monopoly supplier or is acting in concert with most other significant suppliers, then there is no monopoly issue. The issue is complicated if the low-cost supplier satisfies condition a by using its monopoly to strong-arm one or more of its suppliers into giving it preferential treatment, but the consequence of this is that not all valid cases are acted on.
- daniel-s 6y agoYour logic/argument is completely circular. Do you mean to say that undercutting competition is monopoly behaviour because you're strong-arming[1] your suppliers because you're a monopoly? [1] "strong-arming" is left undefined, but let's continue.
- mannykannot 6y agoNo, the point is the opposite of your misunderstanding: undercutting the competition is not necessarily monopolistic behavior, so your joke contains a straw-man argument.
- icelancer 6y ago>> Unless actor 2 is both a) selling at less than cost and b) either a de-facto monopoly supplier or is acting in concert with most other significant suppliers, then there is no monopoly issue Plenty of businesses have run into problems without doing this. You also use circular reasoning when saying there's no monopoly issue unless there's a monopoly issue.
- mannykannot 6y ago> You also use circular reasoning when saying there's no monopoly issue unless there's a monopoly issue. Your paraphrase is inaccurate. The point is that undercutting the opposition is not, in itself, monopolistic.
- TheCoelacanth 6y ago
- fortzi 6y agoIt’s a nice joke, but antitrust isn’t (or at least shouldn’t) be determined based on price alone
- tobmlt 6y agoHey, just want to say thanks. Fantastic point, and comment. I completely concur. But then I’m basically an Austrian who also likes math so I’m really just choir here.
- caylus 6y agoWow, this is wild. A great example of how regulation can be a double-edged sword. Anti-trust law prevents market participants from colluding to increase their influence - which is exactly what a labor union does. Lawmakers patched the issue by exempting labor unions, but they didn't cover independent contractors. The latest attempt to patch the issue is to force reclassification of many independent contractors into employees. What unforeseen effects might this have? Does AB 5 have enough special cases to avoid making things even worse?
- andromeduck 6y agoWhy should we protect cartels?
- missedthecue 6y agoIt's a good question. The very purpose of a union is to protect its members even at a cost to everyone else. The chicago plumbers union for instance fought successfully over and over to prevent the city from switching their aging lead water piping infrastructure to a composite type. The reason? Lead water piping required more billable hours of maintenance. The result was that Chicagoans had to pay more money to continue drinking from a poisoned water supply, and the plumbers got richer at their expense. In general, there is little evidence that cartels produce net benefits, whether they deal in oil or in labour or in anything else. I suppose the average person is sympathetic to unions both because they can see themselves as a plumber more easily than as an oil sheikh, and because the societal costs of labour unions are hidden and do not take shape in a very tangible form, be they high import tariffs, reduced R&D spending, bad water infrastructure, or more expensive and noncompetitive goods and services, among other things. Regardless, the economics of cartels will never be sound.
- wahern 6y agoIf a union is a cartel because its members bargain collectively, so is a corporation. If you want to keep corporations because of the organizational efficiencies that maximize productivity and welfare, then why not unions? And let's not get into a semantic debate--the rules for forming corporations are designed to make it efficient for investors to organize; likewise the rules for forming unions are designed to make it efficient for laborers to organize. So if you argue that laborers should instead form a corporation if they want to organize, I'd rhetorically ask why not make investors use unions as their vehicle.
- EdJiang 6y agoThis is a really interesting topic. If you go to conventions for different trades, they usually make sure to emphasize that the convention is not a venue to discuss specific pricing, as that could be seen as collusion and anti-competitive. You wouldn't want a plumber's convention to be a place where they collude to fix prices! With technology enabling more peer-to-peer connections, the game changes. If you're a productive plumber, why join a company and work for a salary when you can work directly for the consumer and enjoy higher margins (and higher risk)? However, as time goes on, more plumbers will make the same decision and enter the market. This results in a more efficient economy: more people can get plumbing at lower prices, and more people can work as plumbers. But what if some business owners cost structures (due to mismanagement, poor productivity) do not result in good wages? (eg, XYZ Plumbing struggles to stay in business while ABC is doing just fine). Or what if the market forces end up in a clearing price that's too low? In today's economy, it's considered normal for some businesses to shut down if they cannot make money (know of a restaurant that has closed due to COVID?). But do we as a society want individuals taking on that much risk? If not, how can we insure against that risk?
- alextheparrot 6y agoOne solution could be to target 100% employment and have the risk state subsidised (Through a guaranteed government wage). If the government is forced to spend money to employ people (The military could be argued to be a weak form of this), irrespective of need, I’m sure someone would figure out a solution to the government’s labor surplus. Pretty easy to implement too — just conscription - with the ability to opt in and out as you choose other jobs instead or leave those jobs. Overall, this means individuals are free to attempt different employment at market rates. That could even be below the guaranteed government wage, just there’ll be no subsidies that if individual can’t make the economics work out. Hard to argue that the 1.2% employment rate in 1944 wasn’t helping drive the economy forward.
- pyuser583 6y agoAnd what would this army of people be doing? I have an image in my head of all my neighbors working at the same company. WTF would we be doing? I’m a software engineer, my wife a reporter, my next door neighbor a nurse, the guy across the hall plays video games all day. His girlfriend is a cleaning lady. This doesn’t include the sex offender down the street, the guys who shoot guns in the middle of the night, the drug addicted and mentally ill who hang out near the bus station, or any other “hard cases.” So what would we be doing?
- jasonhansel 6y agoI don't think that this shows that anti-trust laws are bad. But I do think that this partly explains why Uber and Lyft drivers don't "just organize"--it's because they don't receive the protections (limited as they are) that ordinary employees would when they organize.
- Animats 6y agoThat's a fascinating read. I'd never thought of that implication of antitrust law. Owner-operator truckers are in the worst position, as that paper points out.