Reading Sapiens by @harari_yuval. 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-
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There’s a rich literature on this in economics. The short answer is that firms have a lot of power in setting wages.
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1/The way they conspire is to prevent the passage on minimum wage increases and other worker protection and benefit laws. They don't actually sit in a room and device that in Paducah we only pay X dollars. It is incredibly naive to think they actively conspire in a secret meeting
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2/a major cost for a company like Walmart is wages, and the jobs are simple enough that there is minimal training and replacing workers is easy. There are enough people who need a job that they can fill them even if they pay garbage wages.
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I had the same reaction to that section. And then the rest of the book kinda drags on. His best work is before he gets to modern time.
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Consider that most companies are owned by the same three companies. That there is not nearly as much a market as there pretends to be.
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Major tech companies got caught conspiring with non-poaching agreements. Also, H1B visas are held by the companies which limits the H1B recipient from moving companies for better wages. All sorts of rules favor companies in lowering wages. https://www.cnet.com/news/apple-google-others-settle-anti-poaching-lawsuit-for-415-million/ …
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See also: https://www.reuters.com/article/us-usa-tuna-pricefixing/former-bumble-bee-tuna-ceo-found-guilty-of-price-fixing-idUSKBN1Y72M1 … https://aircargoworld.com/allposts/db-and-lufthansa-reach-settlement-over-price-fixing-saga/ … Collusion is just as viable a strategy in the market as competition. People need to stop treating markets as logical, idealized abstraction and start treating them as the messy, irrational social constructions they are.
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We do know that in,the 2008 crisis banks held onto Holmes by the thousands and let them be vacant or didn’t evict just to artificially suppress the supply and force home prices back up. This is small example of what Yuval meant I believe
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