As you may have heard, employees of high tech companies in Silicon Valley have filed a class action lawsuit claiming that big firms colluded to keep wages low by not competing with each other. These companies are Apple, Google, Intel, Adobe, Intuit, and Pixar. How very “free market” of them! You will find all the nasty details in Mark Ames’ excellent Pando Daily article, The Techtopus: How Silicon Valley’s Most Celebrated CEOs Conspired to Drive Down 100,000 Tech Engineers’ Wages.
What’s especially wonderful about this case is that the primary villain is everyone’s favorite example of the kind of “entrepreneur” we must encourage with low taxes and no aid to the poor: Steve Jobs. Of course, as I note all the time: Apple has got to where it is not by innovating but by packaging. In addition, they use the legal system to attack competition. And now we know that Steve Jobs himself was directly intimidating other companies into making this deal that cost 100,000 employees an estimated $9 billion over five years at the end of the 2000s. Adobe CEO Bruce Chizen wrote at the time, “[I]f I tell Steve [Jobs] it’s open season (other than senior managers), he will deliberately poach Adobe just to prove a point. Knowing Steve, he will go after some of our top Mac talent…”
Because I have worked a lot in the high tech world, I know what a crock most of this “innovator” fawning is. The real innovators tend to get swallowed or crushed by the big companies. The big companies are not innovators—ever. Again: look at Apple. All they’ve ever done is package other people’s technology well. They are above all good at branding. But people on the outside really think they are great. Yesterday, Thomas Friedman wrote a hilarious column that shows just how thoroughly he has metabolized the globalized, libertarian Silicon Valley Kool-Aid, Start-Up America: Our Best Hope. He starts by talking about some banal ideas that he calls “creative” coming from large companies that he calls “start-ups.” And what links all these companies together?
This is not creativity or innovation; this is trend chasing; this is what people who don’t have any new ideas do. But of course, Friedman doesn’t understand this. Rich men in nice suits told him it’s the future. And Friedman so wants to believe—he’s written books saying it is the way things are. We learned the lesson of The Lexus and the Olive Tree where he told us that to unleash the free market, each country must put itself in a “golden straitjacket.” And The World Is Flat taught us that globalization is super-keen but even if it ain’t we have to live with it because he and the rest of his class are gonna cram it down our throats.
All of this is about the great libertarian idea of free markets and free minds. The problem is that the markets are anything but free. And even more important, the minds are closed. Friedman is the poster-child for this. He believes in the new global world order and no amount of fact will change his mind. Of course, he’s just the front for the New Gilded Age tycoons who spew out this free-market claptrap while working behind the scenes to do everything they can to distort the market to their advantage.
Dean Baker as always has a extremely insightful take on this whole wage-theft situation. In one sense, it is no big deal: companies are doing illegal and immoral things to increase profits is not surprising. What is interesting, however, is what it says about all of the libertarian rhetoric that comes out of Silicon Valley. They always claim that no government intervention is necessary because in a free market everything takes care of itself. But their actions indicate that they do not think this is true in our current “free” market:
The fact the Silicon Valley honchos took the time to negotiate and presumably enforce these non-compete agreements was because they did not think that there were enough competitors to hire away their workers. They believed that they had enough weight on the buy-side of the market for software engineers that if they agreed to not compete for workers, they could keep their wages down.
So the issue is that businesses will continue to abuse workers and the system generally. We should do everything we can to stop it. But what we should not do is believe the free market claptrap that comes from these people. Because when it comes down to it, it is clear that even they don’t believe it.
On this day in 1820, the civil rights leader
because of the color. (One can do silver-copper coin tricks using the two dollars.) But no one today complains about the size of the dollar, even though it is exactly the same as the Anthony dollar. Regardless, here in California (and Florida, New York, West Virginia and Wisconsin), it is Susan B Anthony Day. So happy Susan B Anthony Day!
Well, Greg Mankiw is out with a great big pile of income inequality apologetics in The New York Times, 
Andrea alerted me to the documentary That Guy… Who Was in That Thing. It consists of interviews with 16 relatively familiar screen actors about the acting business and their lives. It’s interesting because we don’t get much information about actors at that level. I didn’t learn much, however. I’m very aware of just how extreme the winner-take-all economics of the film business is.
Dean Baker is probably the most insightful economic thinker in the public discourse. But there is one area where I think he is wrong. He complains that we have nothing to worry about from automation because it will make our lives better. This is in contrast to those of us who believe that robots are like other forms of capital and will be distributed the way that capital is now: unequally and unfairly.
Sometime around this day in 1818, the abolitionist
There is this thing in economics called 

I just got word that Ralph Waite has died. You probably know him as the father on 

