Conversation

Reading Sapiens by

. I like it, but came across criticisms of the free market. There are good criticisms to be made, but Yuval's felt a bit basic. For example, he mentions how corporations can cooperate to keep wages low for employees. Like, sure, but-

Aella

@Aella_Girl

This would require a corporation to forego a selfish benefit (not hiring competitively) for the "good" of the whole (lower wages for all corps). We don't expect this to ever worn for e.g. the environment, so why do we expect the incentive for defecting to disappear for wages?

3:30 AM · Dec 6, 2019

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This might make more sense if you have a very limited number of corporations, but then I'd want to see consistency when it comes to expecting how well corporations are able to coordinate

Misha Gurevich, Photographer, VC, Wives 0/1

@drethelin

Dec 6, 2019

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@Aella_Girl

When I was listening to that book it had the fastest back and forths between "Huh, that's really smart and interesting" and "Hah, that's absurdly basic and dumb!"

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Not all corporations need to hire competitively, particularly for unskilled labour (or in certain more broad market conditions).

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Corporations have a lot of internal friction, so they don't need to hire top talent in all roles

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I think this assumes that you can hire competitively. Might not work well for less skilled labor categories, where even a much better worker can’t impact the bottom line a substantial amount. So the selfish behavior might not be actually be much of a benefit.

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It's hardly fiction, it happened recently: google.com/amp/s/www.wire environmental efforts don't work like this because the number of collaborators would have to be much higher and much of the payoff would be to future generations rather than to the collaborators.

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Because bidding wars (just like undercutting) just spiral - it's kinda a game theory thing. As soon as you 'cheat' (and bid competitively) - people 'cheat' in response and you lose the advantage. Keeping wages down just has to be marginally better than the marginal employee...

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You could make the same argument about price fixing. Why collude on pricing when one can defect and get more customers with lower prices? Except price fixing happens all the time because you don't lose any competitive advantage if others collude. en.wikipedia.org/wiki/Price_fix