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Out of curiosity, do you feel the same about unions, because it is the same exact problem and should be dealt with the exact same way.

jjk166 2y ago
You don't see a difference between a monopoly on food and a union?
- snapplebobapple 2y ago
  Of course not, one is a monopoly on labor and one is a monopoly on an end product. Monopoly is the key word and the problem in both situations.
  - jjk166 2y ago
    Pretty sure food is the key word here, seeing as people need that to live. A monopoly on swiss watches, for example, would be fine. Now again, do you see a difference between a monopoly on food, and a monopoly on a particular form of labor?
    - azinman2 2y ago
      I don’t think there should be a monopoly on anything, Swiss watches included. It stuns growth and innovation, raises prices, and leads to a less dynamic economy.
      - jjk166 2y ago
        Look up natural monopoly.
    - snapplebobapple 2y ago
      I say again, there is no difference. Both result in higher prices for the item being monopolized, lower output and dead weight loss for society (this has a specific meaning in economics, it's basically the worst thing that can happen). All deadweight losses should be fixed. There is probably a difference in urgency given that the deadweight loss on food will be a lot higher because everyone eats and only a few consume Swiss watches, but that is outside of the scope of my question. My question was just to verify whether the op understood the problem and felt the same about both common versions of the problem or if there was a lack of understanding, or if they understood the problem but are stuck in one of the common logic traps stopping a rational conclusion from being formed.
      - jjk166 2y ago
        They don't necessarily result in higher prices for society or dead weight loss. Look up natural monopoly. If anything, government intervention such as breaking up monopolies creates dead weight loss. Sometimes this price is worth it (such as for food production), sometimes it's not (for example luxury goods). Even if one were to assume all monopolies are bad, that would not necessarily mean all are equally bad, or that the optimal strategy for reducing their harm would be the same. Finally, unions are not monopolies on labor. Some unions are sufficiently large that they can be modelled as monopolies, but in general only a small fraction of the labor force is unionized and most unions are limited in scope. You could just as easily say employers have a monopoly on employment at their companies, which would be a true but not particularly useful way of looking at them.
        snapplebobapple 2y ago
        A natural monopoly is just a monopoly where the barrier to entry that makes a monopoly possible isn't manufactured via abuse or government (i.e. Mostly capital costs are too high to support investment by more than one or a small number of players). If the entity lucky enough to have that monopoly is profit maximizing it will definitely result in higher prices and dead weight loss. You are right though, that in this relatively small corner case the correct solution is regulation to force competitive pricing (of which there are many options I won't get into here), not breakup. Of course all monopolies are bad. They are current or future points of deadweight loss and should be monitored and dealt with through regulation ( a very small subset of monopolies/oligopolies) or elimination. A monopoly is the forbidden fruit that everyone wants but noone should get for any length of time. That desire is a big driver of the innovation that is the secret sauce of a free market that makes it superior to every other economic organization method we have tried but once someone gets it it eliminates most of the need for any innovation and leaves that industry stagnating. How bad monopolies are (technically market power) is grossly understate in modern society in my opinion. We are talking about government here. How bad something is isn't an argument for not doing something, it is an argument for priority. If your position is labor unions aren't as bad as X so we should sort X and then break up labor unions that's fine, but that's not what I'm hearing in this thread. Of course they are monopolies on labor. most countries labor labor laws make them an explicit monopoly on labor for any workplace unlucky enough to be unionized. It's not relevant that they are non union companies employing non union labor. If your company is unionized it faces a monopoly on labor and can only hire union for the areas that are unionized unless the union allows non union. It is the textbook definition of a monopoly. (also, how do I sign up for this alternative non union government in my province/country? I would really enjoy the much lower taxes that would have from both lower labor prices but also much faster removal of incompetence via firing.. oh wait I can't sign up for that because there is no option because the public labour unions have a textbook monopoly). You can have natural monopolies at the employee level, however that is pretty rare because it means that employee is almost impossible to replace (this is why key man insurance exists basically). It's quite a lot different than saying all of X must be hired from the union where X is a whole class of worker that is fairly interchangeable with a reasonable labor supply but as a class is impossible or near impossible to do your business.
  - dfxm12 2y ago
    Monopoly on labor This is an interesting theory, but the state, via right to work laws alone, has weakened labor unions to the point where you obviously can't make this claim with a straight face.
azinman2 2y ago
I’m not sure exactly what you’re asking here as they’re so completely different and the effects on society are different as well. Are you suggesting there should be many unions and each one not allowed to get big? In general I’m pro-union as I think they largely protect poor workers from getting fired and make everything more expensive. But you also have to recognize that sometimes society needs counter balance, even if inefficient.
- snapplebobapple 2y ago
  There should be no unions because the base premise of a union (monopolizing labor supply to force higher prices) is straight up monopoly abuse in the exact same way any other monopoly/oligopoly is. the end result is the same (higher prices, lower output, smaller pie for us all to split, dead weight loss). your 2 wrongs make a right argument is something I am sympathetic to but don't agree the solution is a union. The solution is identifying the monopsony being abused to push their wages down and fixing that or recognizing there is no monopsony abuse and their labor is actually that low value and looking for ways to shift some of that low value labor into higher value positions via a number of policy tools (retraining, relocation, etc).

jjk166 2y ago

You don't see a difference between a monopoly on food and a union?

snapplebobapple 2y ago
Of course not, one is a monopoly on labor and one is a monopoly on an end product. Monopoly is the key word and the problem in both situations.
- jjk166 2y ago
  Pretty sure food is the key word here, seeing as people need that to live. A monopoly on swiss watches, for example, would be fine. Now again, do you see a difference between a monopoly on food, and a monopoly on a particular form of labor?
  - azinman2 2y ago
    I don’t think there should be a monopoly on anything, Swiss watches included. It stuns growth and innovation, raises prices, and leads to a less dynamic economy.
    - jjk166 2y ago
      Look up natural monopoly.
  - snapplebobapple 2y ago
    I say again, there is no difference. Both result in higher prices for the item being monopolized, lower output and dead weight loss for society (this has a specific meaning in economics, it's basically the worst thing that can happen). All deadweight losses should be fixed. There is probably a difference in urgency given that the deadweight loss on food will be a lot higher because everyone eats and only a few consume Swiss watches, but that is outside of the scope of my question. My question was just to verify whether the op understood the problem and felt the same about both common versions of the problem or if there was a lack of understanding, or if they understood the problem but are stuck in one of the common logic traps stopping a rational conclusion from being formed.
    - jjk166 2y ago
      They don't necessarily result in higher prices for society or dead weight loss. Look up natural monopoly. If anything, government intervention such as breaking up monopolies creates dead weight loss. Sometimes this price is worth it (such as for food production), sometimes it's not (for example luxury goods). Even if one were to assume all monopolies are bad, that would not necessarily mean all are equally bad, or that the optimal strategy for reducing their harm would be the same. Finally, unions are not monopolies on labor. Some unions are sufficiently large that they can be modelled as monopolies, but in general only a small fraction of the labor force is unionized and most unions are limited in scope. You could just as easily say employers have a monopoly on employment at their companies, which would be a true but not particularly useful way of looking at them.
      - snapplebobapple 2y ago
        A natural monopoly is just a monopoly where the barrier to entry that makes a monopoly possible isn't manufactured via abuse or government (i.e. Mostly capital costs are too high to support investment by more than one or a small number of players). If the entity lucky enough to have that monopoly is profit maximizing it will definitely result in higher prices and dead weight loss. You are right though, that in this relatively small corner case the correct solution is regulation to force competitive pricing (of which there are many options I won't get into here), not breakup. Of course all monopolies are bad. They are current or future points of deadweight loss and should be monitored and dealt with through regulation ( a very small subset of monopolies/oligopolies) or elimination. A monopoly is the forbidden fruit that everyone wants but noone should get for any length of time. That desire is a big driver of the innovation that is the secret sauce of a free market that makes it superior to every other economic organization method we have tried but once someone gets it it eliminates most of the need for any innovation and leaves that industry stagnating. How bad monopolies are (technically market power) is grossly understate in modern society in my opinion. We are talking about government here. How bad something is isn't an argument for not doing something, it is an argument for priority. If your position is labor unions aren't as bad as X so we should sort X and then break up labor unions that's fine, but that's not what I'm hearing in this thread. Of course they are monopolies on labor. most countries labor labor laws make them an explicit monopoly on labor for any workplace unlucky enough to be unionized. It's not relevant that they are non union companies employing non union labor. If your company is unionized it faces a monopoly on labor and can only hire union for the areas that are unionized unless the union allows non union. It is the textbook definition of a monopoly. (also, how do I sign up for this alternative non union government in my province/country? I would really enjoy the much lower taxes that would have from both lower labor prices but also much faster removal of incompetence via firing.. oh wait I can't sign up for that because there is no option because the public labour unions have a textbook monopoly). You can have natural monopolies at the employee level, however that is pretty rare because it means that employee is almost impossible to replace (this is why key man insurance exists basically). It's quite a lot different than saying all of X must be hired from the union where X is a whole class of worker that is fairly interchangeable with a reasonable labor supply but as a class is impossible or near impossible to do your business.
- dfxm12 2y ago
  Monopoly on labor This is an interesting theory, but the state, via right to work laws alone, has weakened labor unions to the point where you obviously can't make this claim with a straight face.

azinman2 2y ago

I’m not sure exactly what you’re asking here as they’re so completely different and the effects on society are different as well. Are you suggesting there should be many unions and each one not allowed to get big? In general I’m pro-union as I think they largely protect poor workers from getting fired and make everything more expensive. But you also have to recognize that sometimes society needs counter balance, even if inefficient.

snapplebobapple 2y ago
There should be no unions because the base premise of a union (monopolizing labor supply to force higher prices) is straight up monopoly abuse in the exact same way any other monopoly/oligopoly is. the end result is the same (higher prices, lower output, smaller pie for us all to split, dead weight loss). your 2 wrongs make a right argument is something I am sympathetic to but don't agree the solution is a union. The solution is identifying the monopsony being abused to push their wages down and fixing that or recognizing there is no monopsony abuse and their labor is actually that low value and looking for ways to shift some of that low value labor into higher value positions via a number of policy tools (retraining, relocation, etc).