
Silicon Valley billionaires believe in the free market, as long as they benefit - irv
http://www.theguardian.com/commentisfree/2014/feb/03/google-apple-silicon-valley-free-market-joke
======
abalone
Collusion is small potatoes. The real "free market" hypocrisy is that Silicon
Valley was created by government spending. Still plays a huge role today.

Really disappointed more authors don't take on that topic.

I don't like the author's definition of "classic libertarianism" though.
Classic libertarianism is anarcho-socialism. Liberty in all spheres of life:
the personal, the political, the economic. Opposition to all forms of tyranny
and concentration of power.

What the author is describing in the article is American "Libertarianism"
which came about in the mid-20th century. It adopted the term from libertarian
socialism but cleansed it of its critique of authoritarianism in the economic
sphere (corporations are dictatorships).

It's as though a royal servant came up with a philosophy of "liberty to do
whatever you want with your kingdom" and the royals embraced it, along with
anyone else who aspired to it. It's a corruption of the term.

But the idea that anyone in Silicon Valley is an honest Libertarian (in the
American sense) is ridiculous, given the massive amount of state spending that
supports it.

~~~
hackerboos
The word Libertarian was coined by french anarchist (libertarian communist)
Joseph Déjacque.

In the US the word libertarian would be better replaced with neo-liberal.

~~~
rat87
A neo-liberal is just someone who is strongly pro free-trade and possibly some
lowered/standardized regulation of business(although not universally,
possibly(but not always) formerly or currently associated with center-left(or
at least center-left from a US perspective)

~~~
conanite
)

------
adventured
This article clearly elaborates that the author doesn't understand either the
philosophy or ethics of libertarian (or actual free market) economics. From
what I can tell, the author may have not have even read cursory basics on
Wikipedia about such.

This header:

"Google, Apple and other tech firms likely colluded to keep their workers'
wages down." then concludes: "So much for that libertarian worldview"

That assumes incorrectly that willful collusion is somehow anti-free market,
or anti-libertarian. The free market has absolutely no position on collusion,
except that force may not enter into economic transactions. If two parties
choose to collude to set prices, the free market has no opinion on the matter
as such; if they set prices incorrectly in the process of judging the market,
they will lose. That is basic free market ideology.

A free market doesn't outlaw or in any way forbid collusion. Nor is it
considered immoral in laissez-faire doctrine to agree to freeze or suppress
wages across an industry. The use of force (eg to prevent workers from leaving
their job for a better paying one) to control workers would be considered
immoral and illegal. Otherwise, it's the responsibility of the worker to
pursue a job that properly compensates their talent, not the responsibility of
the business owner to overpay the worker (and if the owner isn't properly
compensating the worker, and that worker leaves, the owner loses).

As a response to wage collusion by business owners, in a free market workers
also have the right to collude to attempt to inflate wages; owners also have a
right to fire every single one of them in response. Whichever group judges
correctly about their value proposition, wins.

One can then move on to debating the merits of laissez-faire Capitalism versus
other systems; or libertarian ideology; or 19th century free market economics.
The author however is far off base in understanding even where the
conversation would begin.

~~~
toyg
The hypocrisy, it burns!

So it's ok to exploit one's personal situation (family and financial
commitments stopping one from moving to a location where the cartel is not in
force, for example), but hey, no physical violence please, psychological one
will do!

There is a main difference between the two actors: employers _own original
capital_ , employees don't. The penalty for employers (losing some profit if
all workers quit or get fired) is virtually nonexistent: limited-liability
companies are set up with the explicit aim of exonerating capital owners from
responsibility beyond the invested capital. You lose the company, you lose a
bit of capital; but in most cases, there is more where that came from. Workers
don't own original capital (which is why they are workers, after all). The
penalty for them is much higher, they could lose their house and/or
livelihood.

Refusing to consider the fundamental imbalance of labor relationships is
disingenuous at best. It's sad that we're still debating this same stuff in
2014.

~~~
smsm42
Yes, it is OK to "exploit" the fact that somebody wants to sell something
cheap, but it's not OK to take it by force. If you think it is hypocritical,
next time you buy something at a discounted sale instead of stealing it you're
a hypocrite.

>>> The penalty for employers (losing some profit if all workers quit or get
fired) is virtually nonexistent:

Because in your world running a business carries no risk as businesses never
go bust. I see. Must be nice.

>>> limited-liability companies are set up with the explicit aim of
exonerating capital owners from responsibility beyond the invested capital.

And losing invested capital (for small business/startup - likely all one has
and also a lot of borrowed money) is nothing. Again, must be nice to be a man
for whom losing all investment is nothing.

>>> The penalty for them is much higher

You mean, they have to go to work to another place now? If they possess
marketable skills of decent quality, it won't be long before they'd be paid
for them. If not, now we know why the business went bust - they shouldn't have
hired workers which are incompetent.

>>> Refusing to consider the fundamental imbalance of labor relationships is
disingenuous at best.

Here we considered it and found you fundamentally misunderstand both nature of
business and nature of employment, suggesting business carries no risk and
employment only possible with single employer and if that goes bust the worker
can not work anymore. Yes, it does sound a bit sad.

~~~
toyg
_Because in your world running a business carries no risk as businesses never
go bust. [...] And losing invested capital (for small business /startup -
likely all one has and also a lot of borrowed money) is nothing_

We are talking about Google, Apple, Intel and Adobe -- startups? Small
businesses? No, market-clearing companies with billions in profit and rich
dividends, quarter after quarter.

 _If they possess marketable skills of decent quality, it won 't be long
before they'd be paid for them._

As you put it, must be nice to be a man for whom losing a job is nothing. If
you are a major investor in Intel or Adobe, chances are you are not going to
lose your house over it; things tend to be different for most workers.

I am not saying business never carries risk; what I'm saying is that the type
of risk is qualitatively different from the risk of losing a job for an
average salaried worker.

~~~
smsm42
Google, Apple, Intel and Adobe were startups once. They took risks. These
risks played out. Hundreds of others took the same risks, and you don't know
their names, because their risks didn't. But you can also remember names like
Compaq, DEC and Ashton-Tate. They were giants once. They are no more. There's
always risk, and Adobe of today may become Ashton-Tate of tomorrow.

>>> must be nice to be a man for whom losing a job is nothing.

I didn't say it's nothing. I said it's not losing your livelihood on permanent
basis. If you have marketable skills, you will find another job, and unlike
capital, your skills can not be lost. They can become stale and out of date,
but there's an easy remedy for that - keep learning and improving - and that
needs to happen even if you do have a job.

>>> If you are a major investor in Intel or Adobe, chances are you are not
going to lose your house over it;

Unless you deal in trivialities like "if you're a billionaire, then losing a
million does not matter", many people lost a lot on dotcom boost, and many
lost their house quite literally betting on housing market. Unless you are a
politician or friends with one, investment always carries a risk of loss.

>>> I'm saying is that the type of risk is qualitatively different from the
risk of losing a job for an average salaried worker.

Yes, it is, investor risk what can be easily and irreversibly lost and can not
be protected (I exclude bailout shenanigans of course, this is plain old
robbery that our politicians facilitated) and the salaryman risks only a
temporary dip in the cash flow in the most cases, and his skills can not be
taken away or lost, indeed they are usually improving constantly (15 years of
experience is usually better than 5). The nature of risk is substantially
different. That's why most people prefer salary.

------
yummyfajitas
This article is stupid. Larry Page, Sergey Brin, Eric Schmidt and Steve Jobs
are all Democrats and Obama supporters. Most valley leaders are.

The reasoning of the article laid out explicitly: Peter Thiel is guilty of
hypocrisy because (democrats) Larry Page and Steve Jobs failed to live up to
Peter Thiel's libertarian principles.

[edit: CEO of Adobe, also involved in this mess, is a Democrat and selected by
Obama to be on his PMAB.]

~~~
jrs99
is collusion even anti libertarian?

~~~
yummyfajitas
Whether it is or not (I'd generally say not, but I don't want to speak for
true libertarians [1]), this article is stupid.

[1] I'm only weakly libertarian, so I don't want to speak for them. My values
are almost entirely left wing liberal, but I haven't drank the koolaid on
economic theories designed to justify the status quo and protect party
cronies.

------
ergoproxy
The author, Dean Baker, has a very narrow view of what libertarianism is and
isn't. I'm a left-libertarian. I take a great deal of inspiration from the
libertarian activist Karl Hess, who developed the language of the 1% versus
the 99% in his 1975 manifesto, _Dear America_ :

"1.6 percent of the adult population owns 82 percent of all stock, and thus
actually owns American business and industry. In a very real sense, that tiny
1 percent of the population faces the other 99 percent across a barrier of
very real self-interest. That tiny 1 percent has been accumulating more as the
years go on, not less. The key to that accumulation is assuring that the
people who make up the other 99 percent are sharply restricted in what power
and privilege they accumulate."

Again, that was written by an American _libertarian_.

Libertarianism is a _family_ of philosophical viewpoints, that runs the gamut
from the "Libertarian socialism" of Noam Chomsky to the "Geolibertarianism" of
Henry George to the craziness of the "Tea Party."

It's noteworthy that Ayn Rand denounced libertarianism. I was excommunicated
from the Objectivist club in college for espousing libertarian anarchist
views.

It's also noteworthy that Tea Party founder Karl Denninger renounced the Tea
Party, saying it was co-opted by the Republican Party, which shifted its focus
to "Guns, gays, God." He sums up his feelings toward the Tea Party, saying:

"Tea Party my ass. This was nothing other than The Republican Party stealing
the anger of a population that was fed up with The Republican Party's own
theft of their tax money at gunpoint to bail out the robbers of Wall Street
and fraudulently redirecting it back toward electing the very people who stole
all the f---ing money!" Source:
[http://www.huffingtonpost.com/2010/10/20/karl-denninger-
tea-...](http://www.huffingtonpost.com/2010/10/20/karl-denninger-tea-
party_n_770108.html)

Someone who's really interested in the variety of libertarianism ought to
start with the Wikipedia article at
[http://en.wikipedia.org/wiki/Libertarianism](http://en.wikipedia.org/wiki/Libertarianism)

~~~
lmm
You're coming over rather no true scotsman there. Every political group tries
to disown the negative aspects of its labels. But those who self-identify as
libertarian are and should be judged on the views and actions of others who
self-identify as libertarian.

~~~
coolj
Should you judged by the views and actions of others who self-identify as
"hackers"? If the label includes people with a wide range of fundamentally
incompatible views, it's not very useful to use as a yard stick. It looks a
lot like guilt by association.

~~~
lmm
> Should you judged by the views and actions of others who self-identify as
> "hackers"?

Yes

> It looks a lot like guilt by association.

Your political affiliation is your own choice, so it doesn't seem to have that
unfairness.

~~~
yummyfajitas
So it's fair to judge Democrats as guilty by association in this case?

(Larry Page, Sergey Brin, Marisa Mayer, Eric Schmidt and Steve Jobs all self-
identify as "Democrat", not "[Ll]ibertarian". The president of Adobe is on
Obama's PMAB. I can't find info on the others with 3 minutes of googling.)

~~~
lmm
Sure, although I'm not sure the hypocrisy line is terribly effective here. A
bunch of people who think regulations are necessary to stop corporations
exploiting their workers turn out to run corporations that exploit workers?
Well, yeah, isn't that exactly what you'd expect?

------
salgernon
While I frankly believe that libertarians are idiots and will drag society and
social progress into the victorian age (hey, opinion, ok?), I think its
important to point out that Steve Jobs @ Apple was not in any way one.

I don't believe for a minute that he cared about how much people made and was
far more concerned with either employees leaving with secrets, or more likely
annoyed that a revolving door of employees between his company and others took
_time_ away from getting his projects completed.

Apple has no problem paying people, but if they're trying to complete
something for particular market opportunity, they probably don't want to waste
time bringing new hires up to speed.

~~~
coolsunglasses
Yet, when I look at the data, Apple engineers get paid below the market
average and they work at one of the most profitable companies of all time.

~~~
cbsmith
Considering how many engineers would gladly take a below market wage for an
opportunity to work at Apple, I don't think that is necessarily out of line
with market forces doing their usual "magic". Even economists would admit that
wages are not the sole determinant of where people choose to work.

~~~
girvo
I was thinking about this the other day coincidentally. The only big tech
company I would want to work for is Apple, and I'd gladly take a few tens of
thousands less than my already far larger than my living expenses wage to have
the opportunity to. I wonder what that says about me?

~~~
dhimes
_I wonder what that says about me_

For one thing, it says that you are likely young. And I don't intend that as
an insult.

~~~
girvo
Fair! I'm 23, no children, no wife, no particular responsibilities. I suppose
that means I can "afford" to take that pay cut and throw myself into something
like Apple. The only thing that gives me pause is the reports from those that
I know who have worked there is that it's very very demanding, but also very
very fulfilling.

~~~
dhimes
Well, if you're going to do it now's the time. I'll have two kids in college
next year, and a third in a few more years. That'll probably run about $300K
when all is said in done.

So taking a few tens of thousands of dollars cut for ten years is that.

------
c_plus_minus
Steve Jobs, Eric Schmidt, Intel heads and so on are/were libertarians? News to
me (and them I imagine).

~~~
blazespin
The whole article was rife with made-upisms. For example, plenty of
libertarians believe in intellectual property.

~~~
billpg
I hear some communists also believe in the private ownership of the means of
production too.

~~~
dnautics
eh, that one's real. It's a wedge issue, and there are not entirely
unreasonable libertarian arguments for IP. I happen to totally disagree with
them, because _they 're wrong_, but I sympathize with the libertarian that
believes in IP.

------
ChristianMarks
This kind of "free-market libertarianism" involves systematically winning
asymmetric zero-sum games against labor: free for me, not for you [1].

[1] [http://publicsphere.org/2014/02/02/the-asymmetric-zero-
sum-g...](http://publicsphere.org/2014/02/02/the-asymmetric-zero-sum-game/)

~~~
jpttsn
So that article is just phrasing the normative in positive terms? Besides
rigour, what's the point?

This confuses more than it clarifies. _Economic injustice_ is a question of
moral values; phrasing it as a scientific truth lends it a false air of
credibility.

~~~
ChristianMarks
Putnam has argued against a strict fact-value dichotomy in " _The Collapse of
the Fact-Value Dichotomy_ " and in a recently published book of essays edited
by Putnam entitled, " _The End of Value-Free Economics_ (Routledge INEM
Advances in Economic Methodology)." _Economic justice_ , _theft_ and _fraud_
are not strictly questions of moral values--this presupposes a spurious fact-
value dichotomy. These notions have both normative and positive aspects; the
positive aspects of these notions (and others, related to class dominance) can
be captured in game theoretic terms--and should be.

In the _Preface to Game Theory Evolving_ , economist Herbert Gintis suggested
that the mathematical methods of non-cooperative (and cooperative) game theory
developed by von Neumann and Morgenstern, Nash and their successors–Gintis
among them–have the potential to elevate social and political discourse above
ideological debate.

Gintis does not take the step of applying game theory to the topics under
discussion--but neither have most of the comments here, with the expected
result.

~~~
jpttsn
Capturing the positive aspects in game theoretic terms might have advantages;
I recognised rigour as one.

However, I don't think these advantages warrant capturing all the positive
aspects in game theoretic terms. It makes the reading opaque, hiding the
normative value judgments behind scientific-seeming jargon.

Instead of formalising the positive aspects, clarify the underlying normative
choices. Then we will come closer to finding where it is we actually disagree.

~~~
ChristianMarks
I have revised the article at
[http://publicsphere.org](http://publicsphere.org). The normative value
judgments are not hidden behind scientific seeming jargon. The normative value
judgements retain the significance they have--however, they are inextricably
entangled with certain positive phenomena, which _should_ be explicated.
Instead of denying the relevance of positive aspects outright behind
philosophical seeming jargon based on a discredited fact-value dichotomy
imported from British Logical Positivism into economics, find some positive
reason they are wrong. I see no reason to privilege the normative aspects at
the expense of the positive aspects--unless the intention is to prevent the
discussion from rising above ideological debate.

~~~
jpttsn
> inextricably entangled with certain positive phenomena, which should be
> explicated

Let me attempt to disentangle them: You assume collectives (not only
individuals) have rights.

> approximately 0.1% of the US population has been systematically winning
> asymmetric zero-sum games against the lower 99%.

You treat clusters of individuals as players in a game, and infer injustice
from systematic winning of these games; as though justice would necessitate
"fair gameplay" between collectives, not just between individuals.

There's nothing to disagree with in your formalisation, but your formalisation
is meaningless to anyone who disagrees with the underlying philosophy of
rights and justice.

~~~
ChristianMarks
_Let me attempt to disentangle them: You assume collectives (not only
individuals) have rights._

No, I make no such assumption. The assertion that I do is not warranted. Since
philosophers like to find inferences their interlocutors believe they have not
made: locate this assumption. Rousseau's vocabulary of "rights" has not been
particularly helpful.

I do not "infer" injustice. The attempt is to characterize positive aspects of
it. It seems to be characterized by the systematic winning of certain games by
one group against another, especially when the utility obtained by winning is
population dependent for one group (the "winners") and not for the other group
(the "losers").

A general prohibition against allowing one group to systematically win
asymmetric zero-sum games against another group would be a normative
principle. So would some elaboration of special exceptions.

incidentally, you use the term 'meaningless' too loosely. Under what
philosophical theory does a formalization becomes meaningful depending on who
agrees with its "underlying philosophy"?

------
romanovcode
I like how top comments are arguing about what "Libertarianism" is and that
author does not know what it is 100%.

Yet they are completely ignoring the main point of this article - big
companies pushing down wages.

lol

~~~
mattgreenrocks
Pedanticism poisons discussions, but nerds gotta be right on the Internet.

~~~
shadowfox
For multiple definitions of right (if the top comments are to be believed) :P

------
forgottenpaswrd
Free market includes the freedom to conspire for lowering wages down like
includes the freedom from workers to decide where they work or even compete
with those companies.

Having said that, we don't live in a free market, the economy is ruled by
central banks who do central planning, thanks to free money for them, taken
from the rest of us.

In the technology sector, we live in a world with business and software
patents, and with lawsuits costing millions, which makes competing against the
big guys harder and harder for little guys.

------
cbsmith
I love this notion that Silicon Valley billionaires can all be painted with
the same brush. Truly, if there was ever a group of individuals known to
celebrate conforming to the thought processes of others, this is it.

------
rayiner
Libertarianism is a scapegoat here. These people are all Democrats. More or
less in the same vein as all the Democrats on Wall Street.

~~~
judk
The Koch brothers are Libertarian and Republican. Judging by their political
spending.

These labels are entirely useless. Word games are stupid. To have a useful
conversation, just agree on words, then argue ideas.

------
nickik
Everybody only belive in the free market if they benefit. Nobody wants a free
market, everybody wants direct handouts or whatever else.

As long as there is a third party that can be made to help you, you will. The
only reason there exists a relativly free market in the first place is that
there is a balance between diffrent 'powers'.

Everybody individually would benefit from some policys in there faver but
there are few policys that help everybody.

As soon as one groupe gets to much power (meaning political influance) the get
a handout (Sugar Farmers, US Steel ...).

------
iambateman
The free market is all about fighting for your own self interest. The purpose
of government is to ensure those members with special power or position are
not able to extort those advantages.

ANYONE in their position would do this. It's not a matter of belief or
politics or even ethics. It's a matter of oversight. The people responsible
for _providing for_ the free market have failed to protect relatively less
powerful market players.

Let's stop pretending that the "free market" isn't a dirty nasty place.

------
theorique
In other news:

\- kids believe in extra cookies at snack time

\- dogs believe in steak and not dry kibble in the dog bowl

People (and animals) like things that they perceive to benefit them. How is
this even news?

------
mathattack
This seems strange, as it's a little removed from the folks doing most of the
complaining, no?

 _This case is striking on many levels, the most obvious being the effective
theft of large amounts of money by some of the richest people on the planet
from their employees._

------
jokoon
that's what politics encourage you to do, so off course those guys will be
billionaires.

------
Allower
Silicon Valley has nothing to do with a free market, those companies make
ridiculous profits for one reason, intellectual property. And IP is in
complete opposition to the free market.

~~~
irv
A point that was made in the article

------
xname
I heard many young people try very hard to get an unpaid volunteer / intern
job in UN headquarters. They need to pay their own rent and food out of their
own pocket to work for UN for nothing. How crazy is this?

UN must be libertarian! Damn!

