No One Hates Free Market Capitalism More Than Free Market Capitalists
by Mad Rocket Scientist
I’m really starting to think that a good amount of the trouble we have with business in this country would be solved most effectively through a heavy regulatory environment.
Not on business itself, but rather on just the people in the C-Suite and the Boards. Why do I have this thought, you might ask? It might have something to do with this article on PandoDaily:
This is not really new to me, as I recall hearing about it a few years back. What is new is the reach of this “agreement” and how cooperative it was.
For the tl;dr crowd, our favorite tech giants in Silicon Valley — Apple, Google, Intuit, eBay, Adobe (Microsoft is absent from this party, it seems) — all conspired to not poach one other’s talent. This was not a case of ironclad non-competes, but rather an agreement to not cold call each other’s current employees in an attempt to hire them away. This was kicked off mostly by Apple and Google, although it turns out George Lucas is the grandfather of this current scheme.
Of course, that alone, while bad, is not necessarily evil; employees were still free to move about on their own.
No, the really bad bit is that the companies shared salary tables and colluded to keep them equivalent so employees had no real financial incentive to look elsewhere, thus effectively shutting down the price information professional tech employees rely on when it comes to making career choices. They also agreed to keep employees from gaining raises too fast, hamstringing the meritocracy that allows talent to be recognized and rewarded.
Rather hypocritical coming from a class of people that all claim their massive salaries are all earned because their talent is so great, but refuse to acknowledge the same in their intellectual capital.
Of course, this agreement, while only directly affecting the 100,000 or so employees of the cabal companies, indirectly affects the entirety of the STEM field. The bulk of STEM workers wear multiple hats, working across a range of disciplines that should be improving our monetary value. But as many of us have found, our wages have been stagnating for the past 20 years or so. Agreements like the one above are a large part of that stagnation, because the price signals from top companies inform the smaller companies. Agreements like this are a great way to encourage professionals to form Unions — something that has happened before (e.g. Boeing and SPEEA), and can very easily happen again.
Unfortunately, I expect that once the fallout from the current criminal cases and class-action lawsuits settles, something like this will happen again, because we allow for the elites to enjoy a near incestuous relationship, with CEOs also serving on the boards of competitors and other related corporations.
I know some of you would rally for expanding Unions. But given how much like CEOs the major union leaders behave, I don’t think that is an answer — and it could just make the problem worse. (Unions, IMHO, will, as they increase in size and influence, work for the betterment of their leadership far more than for the betterment of their membership – this is structural and can be fixed, but as it stands they’d probably compound the problems).
So, how else can we handle things like this? Should CEOs have their pay and benefits limited by law to a percentage of the company finances, or wages? Should they sacrifice privacy for the power and cash they enjoy (all calls and emails recorded, etc.)? Should we prohibit current C-Suite members from serving on any boards, or just boards in the same industry?