Two Errors from Matt Yglesias

Matt YglesiasIt’s a burden. You know that, right? Being very smart is a burden. I’m not talking about myself, in case you were wondering, because I’m not very smart. But young Matt Yglesias is, and his intelligence leads him horribly astray from time to time. Like today: two different articles really stood out for their very intelligent cluelessness.

First up, Yglesias explains, Why Aren’t There More Employee-Owned Firms? His answer: it’s the managers, stupid! Workers don’t care about owners; it’s the managers who make their lives hell. In fact, he claims that the self-employed are happier because they don’t have to deal with managers telling them what to do. Having spent most of my life self-employed, I can tell you that this is a crock. What you quickly learn is that your clients (or customers) are even worse and more unreasonable than any manager you’ve ever had.

Now, I don’t know why there are so few employee-owned firms, but I have some ideas. First, its about norms. I understand that modern conservatives have become revolutionary and thus inured to norms. But most people are not. I have had a lot of small businesses because my father did. And he did because his father did. I always knew I could start a business, because lots of people who were no better than I did the same thing. Those trailblazers who don’t know any people in business and yet start their own? They are the exception. (Ever noticed that in any given area, the convenience stores are mostly owned by one group of immigrants?)

Second, the reason there are so few employee-owned firms, is that in the real world (not the corporate and Wall Street world), owning your own business is really hard. When it is yours you are much more likely to do all the extra work. When you are just one-five thousandth, not so much. The same thing goes on with group projects in school. In my experience, one person ends up doing all the work. (That person, of course, was always me.)

So Yglesias was wrong about that. But he wasn’t finished! He asked a second question, Do Immigrant Engineers Depress Engineer Wages? His answer: not that I can tell! Now look: I’m very pro-immigration. I would like to see far more immigration into this country. But this is the most basic of economics. If the quantity of the supply of a product (in this case: labor) is increased, it will cause prices to go down. Would it be a catastrophic blow to engineer wages? Almost certainly not. And in the long run, it would be better for everyone.[1] But don’t tell me it will have no effect. That’s just dumb, even though it is doubtless the result of over-thinking.

Again, I have experience with this. Technology films do not like H-1B Visa employees because they are cheap. In general, they’re a little cheaper. But not much because the companies who provide them get paid excessively for it. (Often more than the employee himself gets.) But what is best about them from a corporate standpoint is that they are reliable, work ridiculous hours, and have no choice! That last part is critical. Going along with this is that it divides the labor force and makes it harder for native employees to unionize. That’s what’s going on.

I don’t mean to beat up on Yglesias. It was a slow news day unless you are naive enough to worry about North Korea or especially fond of Jonathan Winters. Just the same, he’s totally wrong about these issues. But in a totally Yglesias way!


[1] For the record, I think if we are committed to the dynamic economy that everyone seems to think is so great (I disagree), then we need to have really strong and well funded programs to provide for dislocated workers. As it is now, we provide almost no support for such workers and it is wrong.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

0 thoughts on “Two Errors from Matt Yglesias

  1. Here’s my two cents on the scarcity of employee-owned firms:

    One: capital. Just basic Marxism 101. Most employees can’t put up the dough to become owners and take those risks.

    Two: inertia. And this goes back to the "Mirror Pond Robber" story, how he could spend 27 years in creative misery. Workers don’t think, "hey, we could pool our savings and create a business like this one which we owned ourselves," because that’s a rather wild and crazy (and entirely possible) thing to think about. They don’t even form unions anymore, to command a share of the profits, because nobody else does. We do what we’re accustomed to doing.

    The observation on immigrants is perceptive. People don’t come here because they want to take our hard-earned dollars (they work harder than we do) but because they feel they have no other options. And, once here, they often gravitate to the job opportunities (like running convenience stores) people from a similar background have had success in.

    When I worked at convenience stores in Portland in the 1990s, many of my co-workers were Muslims, and, for whatever reason, quite a few had gotten it into their heads that becoming airline pilots was a path to prosperity. (Flight schools were cheap, and airline union pilot salaries paid much more than they do now.) As creepy as thinking of Muslims in flight schools is today, those guys were pretty cool, and none of them spouted jihadist nonsense. I remember working one night when two off-duty Muslim co-workers, obviously plastered, came in and bought Budweiser. "Aren’t you not supposed to have this?" I asked. "Nope," they replied, and bought the Budweiser.

    I’ve long thought that if you want to radicalize and infuriate a social subgroup, the best way to do so is by demonizing them. I’m maybe about 15% Irish, normally it means nothing to me. If Fox News started blaming all ills on the Irish, I’d hang Gaelic flags all over my apartment and start cultivating my brogue accent.

    Random rant — but I was also the guy doing all the work for my lab partners in school, for what that’s worth. Boy, did that piss me off . . .

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