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You have misunderstood the analogy. The issue is not whether the collusion is public or private, and it is also not whether it benefits the rich or the poor.

You have misunderstood the analogy. The issue is not whether the collusion is public or private, and it is also not whether it benefits the rich or the poor. The issue is that in general it is illegal to reduce competition by forming a cartel. People to it privately because it is illegal. The one exception for this is forming a cartel of sellers of labor, i.e. a union. Note that, if it were not a labor union, a cartel would be illegal even if it was benefiting poor people at the expense or big corporations. A much better reason for allowing labor unions, is that unless they use physical force (which of course they do, all the time, but I am speaking theoretically here), they don't really create that much market power. People can always choose to work during a strike (again, assuming the union doesn't physically stop them, which is in theory illegal). If unions don't create market power, what is the point of them? I think they can be useful to help management to stick to long-term commitments they make to workers, and to provide an alternate way for workers to be represented in the company.

_delirium 13y ago
Individual unions seem more like companies than like cartels to me. Say there are a few thousand different candlemakers who currently ply their trade individually. Some subset of them decide to join together and incorporate in a company that will negotiate prices and contracts as a group, instead of individually. So they form Candlemakers, Inc., a Delaware corporation and your provider of enterprise candle solutions. This is not illegal, even though formerly competing candlemakers have joined forces and now collude in their provision of candles. They can even negotiate exclusive deals: maybe you get a discount on candles or otherwise more favorable terms if your restaurant/bar/church agrees to make Candlemakers Inc. your exclusive supplier of candles, i.e. for a period of N years you agree not to buy candles made by candlemakers who didn't join Candlemakers Inc. This is still not illegal or considered collusion. Now if instead of it being contractors who joined together by incorporating, the candlemakers were employees who joined together by unionizing, why is this much different? And why do exclusivity deals legal in the incorporated case become illegal in the union case (the "closed shop", i.e. an agreement to only hire the union's members as candlemakers for some period of time)? They seem pretty analogous to me. The Candlemaker's Local 382 and Candlemaker's Inc. are doing pretty similar things: taking formerly individual candlemakers and joining them into a larger entity that markets its members' services jointly. They differ only in the precise arrangement by which the joined workers provide services to the purchaser: one is a union of employees who've joined together to sell their pooled candlemaking labor to the company, and the other a union of contractors who've joined together to sell their pooled candlemaking services to the company. The place where the analogy to cartels works better for me is in large umbrella union organizations, like the AFL-CIO, if they coordinate their exercise of market power. But some of that is already illegal, e.g. secondary boycotts are illegal under U.S. law.
- gaius 13y ago
  The difference is, the candlemakers who formed a company are taking a risk with their capital, whereas the candlemakers who formed a union are getting all the upside while someone else takes the risk. Same reasons the airline pilot's union is not interested in forming its own airline, despite this being the obvious way to ensure its people are treated fairly.
  - xyzzyz 13y ago
    Historically, if you disregard the pathological cases like airline pilots having ridiculous amount of power because of side effects of government regulation, it was always more risky to be in union rather than to have an union in your company. When not outright fired, union members were or are discriminated against, and many of them were actually murdered by their employers (read about e.g. miner strikes in the US in late XIX and early XX century and ill-famed Baldwin Felts detective agency, the examples are really sickeningly numerous). By protesting, union members risked well being of their family, and even their lifes, and they still do in places where labour protection is not strong enough (for instance in many places where stuff bought by Americans and Europeans is manufactured). On the other hand, what the owner of the means of production/service risks is some profit lost -- how often do you really hear about healthy businesses getting killed by the workers' over the top demands? What happens most of the time is business owners and workers agree on some sort of compromise, after which owners go to their mansion to mourn the bigger mansion they could have had.
    - JoeAltmaier 13y ago
      Its easy to label business owners as mansion-dwelling money-grubbers. But consider that for every big deal union made by a car manufacturer someplace, theres a hundred small businesses that have to pay more for machinists etc. Their bottom line may not support that; their business model may fail. Then somebody loses a (lesser-paying) job, and $0 is a lot less than poor pay. So it all comes at a cost. My Mother-in-law lived through the depression, and despised minimum wage. She was a wage-earner whos job was erased because it wasn't worth that much per hour. That left her out in the cold. She knew many people in that situation. Its called the law of unintended consequences. Unions do - something. And that something benefits some and hurts others. And some of the ones it benefits (union bosses) go home to their mansion to mourn the bigger mansion they could have had.
yummyfajitas 13y ago
Unions do create market power. At most companies, not showing up to work is a firing offense. Once a union forms, it is illegal to fire workers who don't show up (that's what a strike is). Similarly, hiring a bunch of non-union workers at cheaper wages is also illegal in many states. Once a union forms, you are legally forbidden from taking your business elsewhere. That's a far stronger form of market power than what is alleged in this case - Apple and Google colluding certainly did not prevent Oracle or Salesforce from poaching their employees. And the anti-collusion agreement only applied to employees working on collaborative projects anyway - i.e., Apple can't poach the Google guy working with Apple on iPhone/Gmail compatibility after they decide they like him. It never prevented Apple from grabbing someone working on Android internals.

_delirium 13y ago

Individual unions seem more like companies than like cartels to me. Say there are a few thousand different candlemakers who currently ply their trade individually. Some subset of them decide to join together and incorporate in a company that will negotiate prices and contracts as a group, instead of individually. So they form Candlemakers, Inc., a Delaware corporation and your provider of enterprise candle solutions. This is not illegal, even though formerly competing candlemakers have joined forces and now collude in their provision of candles. They can even negotiate exclusive deals: maybe you get a discount on candles or otherwise more favorable terms if your restaurant/bar/church agrees to make Candlemakers Inc. your exclusive supplier of candles, i.e. for a period of N years you agree not to buy candles made by candlemakers who didn't join Candlemakers Inc. This is still not illegal or considered collusion. Now if instead of it being contractors who joined together by incorporating, the candlemakers were employees who joined together by unionizing, why is this much different? And why do exclusivity deals legal in the incorporated case become illegal in the union case (the "closed shop", i.e. an agreement to only hire the union's members as candlemakers for some period of time)? They seem pretty analogous to me. The Candlemaker's Local 382 and Candlemaker's Inc. are doing pretty similar things: taking formerly individual candlemakers and joining them into a larger entity that markets its members' services jointly. They differ only in the precise arrangement by which the joined workers provide services to the purchaser: one is a union of employees who've joined together to sell their pooled candlemaking labor to the company, and the other a union of contractors who've joined together to sell their pooled candlemaking services to the company. The place where the analogy to cartels works better for me is in large umbrella union organizations, like the AFL-CIO, if they coordinate their exercise of market power. But some of that is already illegal, e.g. secondary boycotts are illegal under U.S. law.

gaius 13y ago
The difference is, the candlemakers who formed a company are taking a risk with their capital, whereas the candlemakers who formed a union are getting all the upside while someone else takes the risk. Same reasons the airline pilot's union is not interested in forming its own airline, despite this being the obvious way to ensure its people are treated fairly.
- xyzzyz 13y ago
  Historically, if you disregard the pathological cases like airline pilots having ridiculous amount of power because of side effects of government regulation, it was always more risky to be in union rather than to have an union in your company. When not outright fired, union members were or are discriminated against, and many of them were actually murdered by their employers (read about e.g. miner strikes in the US in late XIX and early XX century and ill-famed Baldwin Felts detective agency, the examples are really sickeningly numerous). By protesting, union members risked well being of their family, and even their lifes, and they still do in places where labour protection is not strong enough (for instance in many places where stuff bought by Americans and Europeans is manufactured). On the other hand, what the owner of the means of production/service risks is some profit lost -- how often do you really hear about healthy businesses getting killed by the workers' over the top demands? What happens most of the time is business owners and workers agree on some sort of compromise, after which owners go to their mansion to mourn the bigger mansion they could have had.
  - JoeAltmaier 13y ago
    Its easy to label business owners as mansion-dwelling money-grubbers. But consider that for every big deal union made by a car manufacturer someplace, theres a hundred small businesses that have to pay more for machinists etc. Their bottom line may not support that; their business model may fail. Then somebody loses a (lesser-paying) job, and $0 is a lot less than poor pay. So it all comes at a cost. My Mother-in-law lived through the depression, and despised minimum wage. She was a wage-earner whos job was erased because it wasn't worth that much per hour. That left her out in the cold. She knew many people in that situation. Its called the law of unintended consequences. Unions do - something. And that something benefits some and hurts others. And some of the ones it benefits (union bosses) go home to their mansion to mourn the bigger mansion they could have had.

yummyfajitas 13y ago

Unions do create market power. At most companies, not showing up to work is a firing offense. Once a union forms, it is illegal to fire workers who don't show up (that's what a strike is). Similarly, hiring a bunch of non-union workers at cheaper wages is also illegal in many states. Once a union forms, you are legally forbidden from taking your business elsewhere. That's a far stronger form of market power than what is alleged in this case - Apple and Google colluding certainly did not prevent Oracle or Salesforce from poaching their employees. And the anti-collusion agreement only applied to employees working on collaborative projects anyway - i.e., Apple can't poach the Google guy working with Apple on iPhone/Gmail compatibility after they decide they like him. It never prevented Apple from grabbing someone working on Android internals.