5 ms·

Non-competes are very much pro-business, in that they weaken the power of labor.

drawkbox 13y ago
Small businesses, contractors, freelancers, and more who are asked to sign these are very much businesses and it is very anti-business to them. It is relative, if you are big and established they are good, if you are small/medium (where most innovation and eventual businesses comes from) then they are bad. It is anti fair business, but in a monopolistic/feudal/plutocratic type system it might be pro-business to own skilled people (anti-poaching agreements are also pro-business in that view). In a libertarian and free market sense it is anti-business when viewed from the aspect of an individual/small/mid company. I guess its safer to say non-competes are pro big business and anti small business / anti innovation at least.
rz2k 13y ago
And, if understood in that way, it is an instance where the term "pro-business" is a political ideology rather than an economic perspective. Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. As a result it could be argued that a labor union might hurt an economy if less output comes from the same input, while those labor unions' arguments would be that they disagree about how different working conditions maximize the society's actual utility. A non-compete on the other hand is a contract to decrease worker productivity. It is the opposite of union agreements that forced companies to employ people whose work is no longer needed, it is an agreement not to work. Furthermore, it isn't even entirely about benefiting business owners over their employees, but about benefiting established companies for their past success rather than whether or not they can compete in the current business environment.
- _delirium 13y ago
  Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. I don't think that's really true, in a realpolitik sense if you look into why different interest groups were advocating for "pro-business" policies at various points in various countries' histories. Historically the rationale for "pro-business" policies has most often been that they increase the profits of businessmen, which is why parties mainly representing the business sector have advocated for them. Sometimes they produce more wealth for everyone in society, sometimes they reduce it, other times they're roughly wealth-neutral but just reallocating it. But that isn't the point or the parties' raison d'être, though they may pretend it is in their politicking.
  - nickff 13y ago
    This is a 'bootleggers and baptists'[1] situation, and it is almost impossible to determine the true motives of the politicians.[1] We might be suspicious of the motives of the politicians, but we should also consider that they may be operating with a variety of rationales, all difficult to disentangle. [1] http://en.wikipedia.org/wiki/Bootleggers_and_Baptists http://en.wikipedia.org/wiki/Bootleggers_and_Baptists
    - rz2k 13y ago
      It's an excellent term! It does capture why I am surprised that content distributors have lobbied against ISP favoritism. I want to believe that Netflix wants an entrepreneurial environment like the one that enabled their initial growth, but I can't help wonder if their greatest threat isn't some new upstart, and why they wouldn't be in favor of a large barrier to entry, even if it costs a nontrivial portion of their revenues.
      - nitrogen 13y ago
        ...I can't help wonder if their greatest threat isn't some new upstart, and why they wouldn't be in favor of a large barrier to entry, even if it costs a nontrivial portion of their revenues. I have to imagine they are choosing a sizable chunk of a much larger pie instead of the vast majority of a tiny and shrinking pie.
  - rz2k 13y ago
    I think that you are right when it comes to something like a negotiation between a business and a labor union. Both sides simply view it as an adversarial process, much like how lawyers represent their clients and presume the system will work it out from there as long as they are relatively honest. However, while it may often require some credulousness, I think a significant majority of people sincerely believe that their political positions make the world a better a place rather than just their own lot in life. There are honest discussions that can be had about most policy decisions. For instance, it might be difficult to sell your software business, if you can't legally promise not to immediately launch a competing product. And yet, most of the serious policy mistakes of the past few decades have been made in the wake of debates involving two sets of competing soundbites—a problem that could be improved by better economic education starting at a younger age if I'm right that people are generally motivated to improve the world.
deleted 13y ago
[deleted]
dragonwriter 13y ago
"pro-capital" isn't necessarily the same thing as "pro-business"; non-competes, in particular, reduce labor market mobility, which reduces overall market efficiency in the same way that barriers to capital market liquidity would.
- nickff 13y ago
  Though I have never, and will never sign one of these agreements, I cannot agree with your statement that they "reduce[] overall market efficiency". First off, such a grand claim merits some citation of empirical or theoretical evidence. Secondly, there are a variety of ways that these agreements (which I do not support) may increase productivity, such as by increasing the employer's trust in the employee, allowing the latter to access confidential documents, and increasing the average period of employment, thereby giving the employee more time to accrue experience and improve productivity in a specific field and/or application.
  - deleted 13y ago
    [deleted]
api 13y ago
Capitalism is an adversarial system. People forget that.
- pekk 13y ago
  It's not a zero-sum system.
  - api 13y ago
    Doesn't matter. If you have no leverage you don't capture any of the upside regardless of whether the overall system is growing.
  - dredmorbius 13y ago
    At its limits it is. Beyond them, it's negative-sum.
- mseebach 13y ago
  No, it's not. People forget that.
MisterBastahrd 13y ago
Yes they do, but they also weaken the labor pool. Their primary purpose as used nowadays is not to protect any vital business interest but to make it difficult for employees to move around the marketplace and seek their best rate.

Small businesses, contractors, freelancers, and more who are asked to sign these are very much businesses and it is very anti-business to them. It is relative, if you are big and established they are good, if you are small/medium (where most innovation and eventual businesses comes from) then they are bad. It is anti fair business, but in a monopolistic/feudal/plutocratic type system it might be pro-business to own skilled people (anti-poaching agreements are also pro-business in that view). In a libertarian and free market sense it is anti-business when viewed from the aspect of an individual/small/mid company. I guess its safer to say non-competes are pro big business and anti small business / anti innovation at least.

rz2k 13y ago

And, if understood in that way, it is an instance where the term "pro-business" is a political ideology rather than an economic perspective. Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. As a result it could be argued that a labor union might hurt an economy if less output comes from the same input, while those labor unions' arguments would be that they disagree about how different working conditions maximize the society's actual utility. A non-compete on the other hand is a contract to decrease worker productivity. It is the opposite of union agreements that forced companies to employ people whose work is no longer needed, it is an agreement not to work. Furthermore, it isn't even entirely about benefiting business owners over their employees, but about benefiting established companies for their past success rather than whether or not they can compete in the current business environment.

_delirium 13y ago
Historically the rationale for pro-business policies is that greater production creates more wealth for everyone in a society. I don't think that's really true, in a realpolitik sense if you look into why different interest groups were advocating for "pro-business" policies at various points in various countries' histories. Historically the rationale for "pro-business" policies has most often been that they increase the profits of businessmen, which is why parties mainly representing the business sector have advocated for them. Sometimes they produce more wealth for everyone in society, sometimes they reduce it, other times they're roughly wealth-neutral but just reallocating it. But that isn't the point or the parties' raison d'être, though they may pretend it is in their politicking.
- nickff 13y ago
  This is a 'bootleggers and baptists'[1] situation, and it is almost impossible to determine the true motives of the politicians.[1] We might be suspicious of the motives of the politicians, but we should also consider that they may be operating with a variety of rationales, all difficult to disentangle. [1] http://en.wikipedia.org/wiki/Bootleggers_and_Baptists http://en.wikipedia.org/wiki/Bootleggers_and_Baptists
  - rz2k 13y ago
    It's an excellent term! It does capture why I am surprised that content distributors have lobbied against ISP favoritism. I want to believe that Netflix wants an entrepreneurial environment like the one that enabled their initial growth, but I can't help wonder if their greatest threat isn't some new upstart, and why they wouldn't be in favor of a large barrier to entry, even if it costs a nontrivial portion of their revenues.
    - nitrogen 13y ago
      ...I can't help wonder if their greatest threat isn't some new upstart, and why they wouldn't be in favor of a large barrier to entry, even if it costs a nontrivial portion of their revenues. I have to imagine they are choosing a sizable chunk of a much larger pie instead of the vast majority of a tiny and shrinking pie.
- rz2k 13y ago
  I think that you are right when it comes to something like a negotiation between a business and a labor union. Both sides simply view it as an adversarial process, much like how lawyers represent their clients and presume the system will work it out from there as long as they are relatively honest. However, while it may often require some credulousness, I think a significant majority of people sincerely believe that their political positions make the world a better a place rather than just their own lot in life. There are honest discussions that can be had about most policy decisions. For instance, it might be difficult to sell your software business, if you can't legally promise not to immediately launch a competing product. And yet, most of the serious policy mistakes of the past few decades have been made in the wake of debates involving two sets of competing soundbites—a problem that could be improved by better economic education starting at a younger age if I'm right that people are generally motivated to improve the world.

deleted 13y ago

[deleted]

dragonwriter 13y ago

"pro-capital" isn't necessarily the same thing as "pro-business"; non-competes, in particular, reduce labor market mobility, which reduces overall market efficiency in the same way that barriers to capital market liquidity would.

nickff 13y ago
Though I have never, and will never sign one of these agreements, I cannot agree with your statement that they "reduce[] overall market efficiency". First off, such a grand claim merits some citation of empirical or theoretical evidence. Secondly, there are a variety of ways that these agreements (which I do not support) may increase productivity, such as by increasing the employer's trust in the employee, allowing the latter to access confidential documents, and increasing the average period of employment, thereby giving the employee more time to accrue experience and improve productivity in a specific field and/or application.
- deleted 13y ago
  [deleted]

api 13y ago

Capitalism is an adversarial system. People forget that.

pekk 13y ago
It's not a zero-sum system.
- api 13y ago
  Doesn't matter. If you have no leverage you don't capture any of the upside regardless of whether the overall system is growing.
- dredmorbius 13y ago
  At its limits it is. Beyond them, it's negative-sum.
mseebach 13y ago
No, it's not. People forget that.

MisterBastahrd 13y ago

Yes they do, but they also weaken the labor pool. Their primary purpose as used nowadays is not to protect any vital business interest but to make it difficult for employees to move around the marketplace and seek their best rate.