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Comment by _delirium | Hacker News Reader

The headline kind of has the valence of government activity backwards, though I agree with its policy proposal.

Other states don't restrict job-hopping, they just stand by and don't interfere as the free market ends up having the effect of restricting job-hopping. Employees end up signing restrictive employment contracts, and states don't prohibit them from doing so. California has made a conscious decision that the economy overall works better if some kinds of private-sector contracts are prohibited, so it's restricted what can go into an employment contract to a greater degree than other states have (every state has some restrictions, e.g. in the modern era you can't sell yourself into indentured servitude, but some states are more restrictive than others).

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I think your lense of "free market" needs to be supplemented with a little game theory here. If you're an employer, what's your disincentive for tucking in a little non-compete in your contract? None at all[1], especially since many of your prospective employees won't read it or potentially (if you're a low-wage employee) understand it's implications. Then what's the disincentive for an entire industry to do this? None at all. And suddenly, there is no free market for job seekers anymore.

There's a reason why in the US, overwhelmingly contracts are read against the one who drafts them for example. There's an inherent power imbalance here. That's where laws and courts come into balance things out.

[1] To point, it's not uncommon for California-based tech companies to insert non-compete clauses into their contracts, even though they cannot possibly be enforced unless there is some special compensation.

" especially since many of your prospective employees won't read it"

Why is this on the employers, exactly?

Both parties have to understand a contract for it to agreed upon. For example those massive T&C that go with a website sign-up largely mean nothing if the company hasn't ensured you read and understood them.

This is an interesting, but completely incorrect view :)

"However, the awareness of a legal obligation is established, not through each party's subjective understanding of the terms, but on "objective indicators," based on what each party said and did"

Your T&C examples are adhesion contracts, subject to a different set of rules.

Here, you have an opportunity to bargain like any other party.

There is a disincentive, at least when employees recognize what they are signing and how it limits their options. Informed workers that think ahead would see it as a more restrictive job.

Of course, its usually slapped in front of them AFTER they've accepted a job. Having accepted a straightforward offer in good faith, the terms are then altered, slightly.

Perhaps it should be more clearly stated in a written offer that must be considered before accepting.

And perhaps that's why its better to not allow these. It makes it easier for employer and employees to deal with each other. And it makes companies compete more on merit, rather than manipulation.

It doesn't hurt the companies ability to compete with each other, as long as they all live under the same rules.

Having accepted me as an employee, the company also has invested some resources and is reluctant to lose me. As such, I never had problems removing any annoying clauses in contracts. (True, being from a former communist country my tolerance to restrictive clauses is much higher than that of US citizens, so maybe that accounts for the difference.)

Though of course a non compete is lessening the freeness of the market.

Of course the market runs because of rules we set in the first place.

Enforcement of contracts is always government intervention. It's a regulation of business, forcing people to stick to their word on certain issues, despite obvious economic reasons not to.

Not enforcing some contracts is less intervention, not more.

Right, and in most contracts you would sue for damages if the contract were broken. But with non-compete agreements, it's common to seek injunctive relief, which is a kind of terrifying and powerful tool that the court has. Liquidated damages seem like a more reasonable, free-market friendly alternative, although I'd rather see courts stay out of this even more.

True, I agree that contract law's existence in the first place depends on government enforcement. The same could be said for property ownership, at least state-enforced legal forms of property rather than direct possession (e.g. absentee land ownership proved via deeds and land registries, and enforced via trespassing law).

Within the context of the U.S.'s current economic/legal system, I think it's more in accordance with common usage to think of the existence of private property and contract law as being the basic substrate on which everything else happens, including more specific government action. For example, to continue with the property analogy, we typically think of eminent domain as a state "taking" property, even in cases where a person's "ownership" of a property depends on the government in the first place (someone owns a deed to land they don't actively reside on or use, but since it's legally recognized as property, the government choosing to build something on it is legally recognized as a taking of property). But point taken that this whole contract/property system is itself created and enforced by the state, not some kind of naturally occurring phenomenon.

> Within the context of the U.S.'s current economic/legal system, I think it's more in accordance with common usage to think of the existence of private property and contract law as being the basic substrate on which everything else happens

This may have been common usage through the 1920s, and it may be common usage for people who wish the New Deal never happened. But even then it would be a stretch. This country's legal history is a lot more nuanced than that. What you articulate is probably best described as a minority vision today.

My reading of New Deal legal history (though I'm admittedly an amateur reader of it) is that it came closer to endorsing that view than rejecting it. There was a turn towards courts being open to social-democratic style regulation of businesses and contracts, whereas previously some had held that a strong "freedom of contract" prohibited interference with most contracts between private parties. But courts didn't challenge the default existence of property and contracts as the substrate over which regulation happened. They simply held that the state had the authority to regulate them in a number of cases. And it was described in those terms, as regulation, which tends to imply that it's restricting something that preexists the regulation.

An alternate, more radical view would be that, since the state had created contract law, property law, etc. in the first place, many New Deal laws weren't even regulations or restrictions on anything, merely the state choosing to withdraw some kinds of legal arrangements that it had previously created. But I don't think any New Deal courts were nearly that radical. They instead agreed that they were regulations or restrictions, but held that those regulations/restrictions were within the government's powers to enact, most often justifying them as within the power the Constitution gives Congress to regulate interstate commerce.

The free market solution to contract enforcement is something like credit ratings where businesses form a network to enforce penalties. Without government, assuming society would be able to reach those levels of sophistication, it seems probable that capital would still enjoy a strong balance of power over workers to force them into undesirable contracts.

It's fine if corporations can form syndicates to black list workers, workers can form unions to strike, take over factories, etc. If corporations can then buy its own mercenaries so can workers form their own militias to take on rent a cops. And so on. This stupid fantasy of corporate tyrants free to do as they wish ends the same way all tyrannies do, with a revolution.

Except that many states have now made laws making unionization very difficult. Also, I'm not sure if you intended, but everything you said describes the early 1900s. The Pinkertons were deployed on many occasions to break up unions, and they acted as a mercenary force against the working class. In the end rights were won, and then the 1980s came and Reaganism heralded the destruction of everything that had been fought for under the guise of being 'business friendly'.

I guess so, though there are a lot of examples in history where you ended up with stable feudal-like states. The idea that anarcho-capitalism would produce an optimal equilibrium seems ahistorical to me. I don't think humans have figured out an ideal system of governance, but a strong central government constrained by the rule of law and some democratic checks and balances seems to be the best we've got.

Which examples are you thinking of where a anarcho-capitalist society ended up as a stable feudal-like state?

I'm not saying it wouldn't happen, I just don't remember such an ancap society existing in the first place.

I'm sorry, I didn't meant to say that anarcho capitalism specifically has historically end up in a feudal state. What I meant is that a lot of historical societies, and modern ones for that matter, end up with strongmen oppressing the majority of people so it's something to be very wary about.

Contract enforcement is a government activity, though. To enforce a contract, you ask the government (via the courts) to force the other party to give you assets, or not to work somewhere, etc.

By the same reasoning, if I sue you for defamation for calling me a lamebrained chucklehead, courts refuse to entertain the suit because the government won't restrict free speech. You're entitled to express your opinion, and the government won't assist me in suppressing your speech.

In many states, the government is happy to assist employers in restricting job-hopping.

I take your point that this government activity has its immediate catalyst in private actions in the free market, and that's different in important ways from other government activity. But still.

Consent on both sides is an important difference. It's not everything, but maybe important enough that it's misleading to talk around it.

Consent under coercion which most work contracts are implicitly, else how are you going to pay for your living expenses, by necessity require government intervention.

Under that point of view, seems like the government should instead prohibit work contracts themselves, therefore eliminating such coercion.

You can not eliminate this source of coercion without for instance giving people free living wage. Eliminating such contracts would not eliminate the coercion but make it worse. Maybe not as bad a contract, because people can still walk away, but still could end badly.

Who would be coercing whom if work contracts were eliminated?

The natural state of mammals on this planet is hunter gatherers. Hunter gatherers don't have any way of storing food, so they take only as much as they need. They are under constant coercion by their environment. So I guess the environment is coercing, whether that's nature or it's society. There is a way to get the basic resources for survival. For hunter gatherers they may go out at any time and if food is available they can hunt it. In society, there is no way to get that unless there is some form of contract or agreement for some resources in return for work.

Just saw your reply below, so I'll just pretend you've posted the same reply here. ;-)

I'm a free market guy, and I also agree with certain notions of contract law - like you cannot sign away your inalienable rights. You have those rights regardless.

Also, in order for a contract to be enforceable, there must be an exchange of value. I would agree with the validity of a non-compete clause if there was specific compensation tied to that. For example, "we'll give you $50,000 after you leave the company if you don't compete with us for a year." But tacking it onto an employment agreement, no.

Inalienable doesn't mean what you seem to think it does.

  inalienable: incapable of being alienated, surrendered,
  or transferred <inalienable rights> [1]

What the parent said sounds like pretty much the dictionary definition of inalienable to me?

[1] http://www.merriam-webster.com/dictionary/inalienable

The original inalienable rights -- life, liberty, and happiness -- aren't inalienable because their transfer is prohibited by law, but because they're impossible by fact.

You can be denied of your life, your liberty, and/or your happiness. They cannot however be transferred to another person.

Your material possessions -- real estate, chattel property, intellectual property -- can be.

Again: the nature of inalienable rights is intrinsic, not protected by law.

You'll find that meaning supported in the definition you've provided.

(There's a whole 'nother discussion of rights-based arguments generally I won't get into, though I find the question somewhat problematic.)

Sure you can. There are plenty of examples in history of people voluntarily becoming a slave to other people because they have fallen into debt.

Transferring usufruct of your labour != transferring your life.

You say "free market" but the only reason other states work that way is because the courts enforce non-compete agreements. The state has a monopoly on court judgments, after all. In the same way we can say that the 19th century US didn't "restrict" freedoms, it merely "allowed people to own slaves". I'm not saying the comparison is apt, but it's easy to flip around words and say that "California prevents companies from preventing you from working for competitors" instead of "California does not enforce private non-compete contracts".

People said that in the 19th century. Some apologists even asserted that hapless slaves were too feeble to function an independent free men.

End of the day, it's "freedom fighters" vs "insurgents".

Job hopping, or as normal people call it staying employed. Governments do need to legislate this because scummy corporations and their management have made it a necessity to do so.

Adam Smith's invisible hand can rest, replaced by the lawyer's suit.

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