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They were specifically agreeing not to engage in normal competitive practices against one another. They were agreeing not to compete with one another for engine

They were specifically agreeing not to engage in normal competitive practices against one another. They were agreeing not to compete with one another for engineers. Jane might be free to offer her services to other companies, but what if she hadn't gone looking? She might not even know it was likely that she could get a better salary, or she might not have spotted a job posting particularly suited to her. The companies suppressed a form of competition to further their own interests, with the inevitable effect that salaries were also suppressed, because the market was not as competitive as it would otherwise have been. That is illegal, and has been for more than a century.

EGreg 13y ago
You haven't explained why men seducing each other's wives at every opportunity would lead to better deals for them and their wives. It's not about offers it's about advertising in unwelcome places. You are claiming that ANY agreement not to engage in unwelcome behavior decreases competition and therefore leads to a worse deal for the other parties. So basically can you take it to its logical conclusion... us agreeing to not destroy each other's reputation through NSA-type sabotage is actually a cartel? Us agreeing not to sabotage each other's operations through corporate espionage before 1995 and other legal means is a cartel?
- sheepmullet 13y ago
  He hasn't explained because it is a ridiculous comparison. Husband and wife relationships are long term loving partnerships. Employer-employee relationships are business transactions. A good husband/wife shares rewards fairly equally. An employer rarely distributes profit equally. A good husband/wife team both have a large degree of autonomy and decision making power. In an employee-employer relationship this power predominantly resides with the employer. A good husband/wife stands by their partner in times of trouble. An employer will happily jettison under-performing employees. A good husband/wife will sacrifice some level of material comfort in order to help their partner improve themselves. Employers will not provide training etc unless it is in their best short term interests. Etc etc etc. Fact is jobs are nothing like marriage. Likewise it is not about advertising in unwelcome places. Google is not advertising to Apple; they are advertising to individuals who happen to work at Apple. The party, Apple, that considers it unwelcome is a third party to the advertising. It is frankly none of their business. It is unwelcome to Apple because it stops them from underpaying their staff. And finally there is a big difference between actions that enhance the market and allow it to operate efficiently and negative market actions. If you are worth $200,000 to Apple but only $100,000 to Google then it is a better allocation of capital for you to work at Apple. If you are worth that money to Google then they can easily counter offer. This aids market efficiency which is the driver of all our economic growth. This is completely different from trying to steal key players simply to harm your competition. But stopping this key player theft is actually easy via legal and ethical market mechanisms (e.g. vesting options, bonuses on successful completion of key deliverables, fully funded non-competes, actually paying market wages etc).
  - EGreg 13y ago
    sheepmullet - I appreciate your thoughts above but let me highlight the issue in simple terms And finally there is a big difference between actions that enhance the market and allow it to operate efficiently and negative market actions. You see, Google and Apple can very easily advertise openings GENERALLY TO EVERYONE, let's say on a job board. Advertising a position doesn't mean you have to offer it to anyone -- this is technically called Invitation to Treat. Moreover, Google and Apple and any other companies can widely publicize these opportunities. Any employee who is interested in looking around is able to go to a job board or some other marketplace and see the job listings posted there, the same way real estate agents post in MLS. But just like real estate agents would get real pissed off if rival agents hang around their showings and try to poach their clients, the same is true of companies. (Actually, although you say that marriage is completely different, actually the same mechanisms that lead to jealousy and guarding from 3rd parties are in effect.) This is completely different from trying to steal key players simply to harm your competition. THAT IS EXACTLY THE ISSUE. Basically when companies TARGET specific people in other organizations to lure away, it might not be taken kindly. How do you know that Google isn't trying to lure a key member of the Apple team away and pay them a huge salary boost just so Apple's product is now going to have a harder time competing? This is after all competition! But who is it good for? It is good for the small number of people who make themselves indispensable in a company. But it destabilizes the very teams that are building the products that help the public, so the vast majority of people is harmed by this practice. Or at the very least it's not clear that they benefit enough to make a law banning agreements to scale back poaching key people.
    - nknighthb 13y ago
      The companies are free to stop cold-calling people entirely of their own volition. That isn't what happened here. A subset of companies agreed among themselves to not cold call eachother's employees. This is a conspiracy in restraint of trade that helps these companies at the expense of employees and other companies not involved in the conspiracy. They are specifically agreeing amongst themselves to not target certain people in violation of normal competitive practices in the relevant market, while continuing the practices with regard to others outside the conspiracy. Much of the time, the distinction between a lawful practice and an unlawful practice is whether two or more companies got together and agreed to engage in the practice. The distinction is important, because independent adoption of a practice by multiple entities is a sign that they are responding to market forces, while collusive adoption of a practice is a sign that they are attempting to distort market forces. This was unambiguously an attempt to distort market forces.

EGreg 13y ago

You haven't explained why men seducing each other's wives at every opportunity would lead to better deals for them and their wives. It's not about offers it's about advertising in unwelcome places. You are claiming that ANY agreement not to engage in unwelcome behavior decreases competition and therefore leads to a worse deal for the other parties. So basically can you take it to its logical conclusion... us agreeing to not destroy each other's reputation through NSA-type sabotage is actually a cartel? Us agreeing not to sabotage each other's operations through corporate espionage before 1995 and other legal means is a cartel?

sheepmullet 13y ago
He hasn't explained because it is a ridiculous comparison. Husband and wife relationships are long term loving partnerships. Employer-employee relationships are business transactions. A good husband/wife shares rewards fairly equally. An employer rarely distributes profit equally. A good husband/wife team both have a large degree of autonomy and decision making power. In an employee-employer relationship this power predominantly resides with the employer. A good husband/wife stands by their partner in times of trouble. An employer will happily jettison under-performing employees. A good husband/wife will sacrifice some level of material comfort in order to help their partner improve themselves. Employers will not provide training etc unless it is in their best short term interests. Etc etc etc. Fact is jobs are nothing like marriage. Likewise it is not about advertising in unwelcome places. Google is not advertising to Apple; they are advertising to individuals who happen to work at Apple. The party, Apple, that considers it unwelcome is a third party to the advertising. It is frankly none of their business. It is unwelcome to Apple because it stops them from underpaying their staff. And finally there is a big difference between actions that enhance the market and allow it to operate efficiently and negative market actions. If you are worth $200,000 to Apple but only $100,000 to Google then it is a better allocation of capital for you to work at Apple. If you are worth that money to Google then they can easily counter offer. This aids market efficiency which is the driver of all our economic growth. This is completely different from trying to steal key players simply to harm your competition. But stopping this key player theft is actually easy via legal and ethical market mechanisms (e.g. vesting options, bonuses on successful completion of key deliverables, fully funded non-competes, actually paying market wages etc).
- EGreg 13y ago
  sheepmullet - I appreciate your thoughts above but let me highlight the issue in simple terms And finally there is a big difference between actions that enhance the market and allow it to operate efficiently and negative market actions. You see, Google and Apple can very easily advertise openings GENERALLY TO EVERYONE, let's say on a job board. Advertising a position doesn't mean you have to offer it to anyone -- this is technically called Invitation to Treat. Moreover, Google and Apple and any other companies can widely publicize these opportunities. Any employee who is interested in looking around is able to go to a job board or some other marketplace and see the job listings posted there, the same way real estate agents post in MLS. But just like real estate agents would get real pissed off if rival agents hang around their showings and try to poach their clients, the same is true of companies. (Actually, although you say that marriage is completely different, actually the same mechanisms that lead to jealousy and guarding from 3rd parties are in effect.) This is completely different from trying to steal key players simply to harm your competition. THAT IS EXACTLY THE ISSUE. Basically when companies TARGET specific people in other organizations to lure away, it might not be taken kindly. How do you know that Google isn't trying to lure a key member of the Apple team away and pay them a huge salary boost just so Apple's product is now going to have a harder time competing? This is after all competition! But who is it good for? It is good for the small number of people who make themselves indispensable in a company. But it destabilizes the very teams that are building the products that help the public, so the vast majority of people is harmed by this practice. Or at the very least it's not clear that they benefit enough to make a law banning agreements to scale back poaching key people.
  - nknighthb 13y ago
    The companies are free to stop cold-calling people entirely of their own volition. That isn't what happened here. A subset of companies agreed among themselves to not cold call eachother's employees. This is a conspiracy in restraint of trade that helps these companies at the expense of employees and other companies not involved in the conspiracy. They are specifically agreeing amongst themselves to not target certain people in violation of normal competitive practices in the relevant market, while continuing the practices with regard to others outside the conspiracy. Much of the time, the distinction between a lawful practice and an unlawful practice is whether two or more companies got together and agreed to engage in the practice. The distinction is important, because independent adoption of a practice by multiple entities is a sign that they are responding to market forces, while collusive adoption of a practice is a sign that they are attempting to distort market forces. This was unambiguously an attempt to distort market forces.