Incompetent Scheming Is Just as Bad As Competent Scheming

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A couple of months ago I wrote about new evidence suggesting that several big Silicon Valley firms had explicitly agreed not to hire away each others’ workers. This case has now gotten more attention, and Tyler Cowen comments about it:

I would suggest caution in interpreting this event.  For one thing, we don’t know how effective this monopsonistic cartel turned out to be.  We do know that wages for successful employees in this sector are high and rising.  Many a collusive agreement has fallen apart once one or two firms decide to break ranks, as they usually do. [More follows about how this might play out in the real world]

Cowen is an economist, and I don’t want to knock him for doing some economic analysis. Still, this is the kind of thing that gives economics a bad name. Who cares if this scheme was effective? Maybe it was the Keystone Kops version of collusion. What matters is merely that they tried. These companies felt perfectly justified in conspiring to hold down wages in a tight labor market. Like so many titans of capitalism, they think free markets are great just as long as workers who are in high demand don’t get any fancy ideas about what that means.

Throw the book at them. If their scheme didn’t work, it just means they’re incompetent plotters. But they’re plotters nonetheless.

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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