Collusion through Common Leadership [pdf]
wwws.law.northwestern.edu
wwws.law.northwestern.edu
"It is worth noting that such collusion against workers may have costs beyond just the directly impacted workers in the high-tech sector. Wages and salaries of jobs in one industry can serve as reference points when workers in other firms/industries negotiate their wages. Thus, if high-tech workers get paid less, this may impact wages of other workers, say in finance, which may then impact wages in another sector and so on. Collusion in one sector can have impacts on other industries."
To read more: https://www.nominalnews.com/p/competition-no-poaching-real-p...
That being said, the best response would be to make it easier for workers to split off and spin up new businesses (ideally co-op style, we really should be experimenting with communal ownership styles now that communication tech is so much better). There isn't a mechanism to stop small politically connected groups conspiring with each other, that is just how power works. It isn't feasible to out-law the politically connected.
Are you suggesting Dana White of UFC fame joining the Meta board isn't particularly skilled? That he wasn't approached for his in depth knowledge of social network theory and practice, online ad revenues or AI ethics?
It’s already not hard for workers to split off and form a new company with whatever ownership structure they want.
What’s somewhat harder is to find a way to cover your bills until the company is able to pay your salary, assuming you aren’t willing to sell part of the company in exchange for that funding. (I’m not giving you money in exchange for nothing; I’m probably not lending you money to immediately spend on salaries without collateral that will be worth something if you fail, and if you have that collateral, you could already use it to raise funds.)
Unless you’re proposing some government scheme to give money for no security, I’m not sure of the form of making it easier that wouldn’t be immediately gamed.
It is more a political project than an economic one; I interpret serial board members as a problem of power centralisation. The incentives shouldn't be to engage in that sort of centralisation, it can't possibly be a technically good idea. One idiot in the wrong place will cause too much damage and board members don't have time to keep track of multiple companies. It'd be good to do things that decentralise power.
The difficulty really is in organising people into a functional company and acquiring customers ASAP. The coordination costs are high and the prospect remains risky, so very few people do this.
Probably the best option for more cooperatives is to legislate the idea of a hostile takeover by employees into existence, such that a majority of employees can vote to take over a company if they can finance it's purchase. As you might imagine, certain quarters would respond badly to this.
The idea already exists and does not need to be legislated into existence: it’s a leveraged buyout (LBO).
A law change is only needed if you want to force a sale at a lower price than the current owner(s) will accept. In other words, if you want to forcibly take the company from them for less than the price they are willing to accept, so basically seize part of the value of private property and give it to other private people. I agree that would be unpopular.
[1] https://www.epi.org/publication/reining-in-ceo-compensation-...
We used to call this “interlocking directorates” and it’s a fundamental pillar of antitrust law. Why are we using a new term?
It seems sloppy to me to be honest.
Tech vs consulting/finance for MBAs, tech vs. HFT for SWEs, tech vs. advertising for creatives, etc etc
If hiring a finance "worker" will make my company $500k/year I will offer him $450k regardless of what Google engineers make.
Either way, engineer wages at Google would not be a factor.
If it did not at least affect that willingness, they might not be worth $250K/yr as a financial analyst.
...for you. It would be a factor for who you are trying to hire. If who you are trying to hire sees Google engineers making $$$, but you are offering $ for job X, and they do not see it as an unbridgeable gap in their own aptitude, they could well say "I am going to instead try to be an engineer at Google so I can make $$$, instead of being offered $ doing X". This happens all the time.
I've been in the board room when discussing salaries and told that we need to offer the lowest that the candidate will accept - "it's just good business".
I was arguing against that mentality as responsibilities and retention are a more important metric to my mind when thinking about compensation. But even there, I'm part of the problem as I would set my "retention" target to some measure above industry standard: where-by I am still thinking in industry standard terms. (as per this thread)
Then what is the firm doing at this point?
(But morally I agree; there is no reason every company has to be Scrooge, and I think it's to their long-term unprofitability to be so, by effectively ensuring a lack of experience & growth within the employees generating the value in the first place.)
But to get back to the topic, tech wages are definitely not set by comparing with finance wages!
No, they absolutely will not. Absolutely not. The entire history of the labor movement and of labor law is testament to this. We’ve tried this, repeatedly, in the real world, and labor gets fucked every single time. Employers do not pay according to the value generated by the employee, they pay the minimum they need to get an employee. Get this model out of your head, it is wrong.
But certainly not since then.
And even he probably paid the minimum overage he could. It's the nature of business.
1. For paying a team of N people the going wage.
2. For paying a team of N/2 people, double the going wage. Aiming for the best workers it could find.
3. Paying a team of 2*N workers, whatever the bottom of the market is.
This would be for teams where high functioning workers resulted in high value results, i.e. creative/design/technically challenging work.
I have no idea how a study like this would work, but the more challenging the work, the higher likelihood that you save money going high salary, high talent.
Some AI researcher seem to be falling into this category, with really high salaries. Researchers certainly have 10x talent. But I bet there are a lot of 2x, 4x engineers, designers, whatever, that are being overlooked and/or under motivated. That would be cheaper to pay, and produce more value, in small numbers, than others in larger numbers.
I think you're saying that employers pay employees as little as they can, not according to some formula based on the value each employee generates. Aside from some very specific exceptions, I think that's very true.
But then we need to explain why all companies don't just pay minimum wage!
I claim that prices (wages) on a labor market, like on most markets, is determined by supply and demand. Obviously, companies that pay employees more than the value they generate will run out of money and die. This sets an upper limit on wages.
The lower limit comes from companies outbidding (demand) each other for workers (supply) as long as it's profitable. In aggregate this means wages will converge on on some large percentage of the value generated by the typical employee.
A former colleague built a program that would have saved $30M p.a. in OpEx but as a policy they can’t deploy something unless more than two people understand it and they wouldn’t pay enough to hire someone capable enough. Probably would have taken $600K.
It’s about power and in general management does not want to yield power to ICs no matter how much money they could make with it. The more productive the IC the more power management loses.
We are giving away this expertise for fractions of a penny, but companies react to market pressures. Let them spend the extra $36 million for not keeping up with it. When they offer incentives, then do the work.
Heck, maybe you can make an underhanded pitch to whatever cloud provider it was that you earned them millions by not fixing the issues.
“The market can stay irrational for longer than you can stay solvent”
There are price makers and price takers. Guess which side labor is on?
After learning how microeconomics/"price theory" explains how prices emerge in markets, it can be hard to discuss with people who don't understand the mechanisms.
AP Physics is learning that a perfectly spherical cow does X.
Common sense is realizing perfectly spherical cows don't exist, and that certain things are overly simplified or more chaotic than theorists would sometimes like to admit.
There may not be perfectly spherical cows in the real world, but then real cows will also do X, to the extent their non-perfect-spheriness doesn't interfere with it. Theorists don't simplify for the sake of simplifying, they're trying to study specific components of the whole in isolation. Yes, it's important to not confuse a component for the whole thing, but then it's also important to know the most impactful components and how they behave.
I think these concerns are pretty similar to the religious idea that "evolution is just a theory". Our human minds really don't want to admit any facts that would force us to change our world view.
- Yogi Berra
The inverse of a "no-poach list" would be a "no-hire list".
In the past, blacklisting (now should be called denylisting) was a real labor issue. People who stood up for workers rights (think: coal-mining towns in the late 1wr800s) or had unpopular political views (think: Hollywood in the early cold war) were, so the story goes, put on shared lists and denied work.
But the effect would be similar. Enabled beneficial collective action for the executive class, through a concerted and curated collection of who can participates in working together.
Does tech do this, too? If so, it could explain the need to import labor, and reflect or contribute to an artificial inability to find high-tech labor domestically?
That is-- some of the collusion enabled by "common leadership" might not be possible with a workforce having full agency--but, with the risk of blacklisting, basically, there is potentially another side to the collective action of the executive minority.
Of course, blacklisting might be illegal, so, hard to learn about, but so might be some other other forms of collusion, which the paper talks about?
I am not a lawyer, just wondering if this is part of a bigger workforce pattern, reaching further to the lower rungs of the ladder, too, even if in the inverse form (exclusion, not inclusion).
Links:
- https://firstamendment.mtsu.edu/article/blacklists/
- https://pen.org/censored-free-speech-hollywood/Similarly, Marx claimed that as capitalist societies develop, workers would face increasing poverty, declining living conditions, etc. While the income gap between the top and low end is ever increasing, in the grand scheme of things, living standards for workers have improved considerably across the board in pretty much every category. Marx also argued that capital accumulation would lead to a decrease in profit margins, which would eventually result in an economic collapse, again ending capitalism. While we've seen numerous economic downturns, practically all affected economies have eventually recovered.
And so forth, there's many other examples we can take turns picking apart, but I doubt there's much value to it — most people arguing over Marx don't actually know much about Marx.
I'm no scholar of this stuff by any means, but by my understanding the relevant difference was between those that lived by what they owned versus those that lived by selling their labor. I don't know the exact numbers but I would assume those that live by selling their labor are a majority but not super-majority. Those that live entirely off their property are a tiny minority, but there currently exists a solid chunk of people that both sell their time and build wealth from property/interest.
Most of the HN crowd probably falls into that later category
They are a global supermajority. In some of the wealthiest nations on the planet, they are instead only a majority.
>there currently exists a solid chunk of people that both sell their time and build wealth from property/interest.
Yes, they are called the petite bourgeoisie. Marx wrote about them extensively. In very wealthy nations like the US, Canada, UK, Australia etc my understanding is that they make up roughly 30% of the population. The rest are proletarians & lumpenproletarians, aside from a negligible-in-numbers percentage of the population that compose the haute bourgeoisie or "real bourgeoisie". I believe the percentage of the population who are bourgeois in the US is around 0.3%, much lower in the other wealth nations because so many of global elite choose to live in the US.
The percentage of the population who are petite bourgeoisie in countries other than the wealthy nations is highly variable, class composition varies a lot worldwide (e.g. there are many countries like the Phillipines where there is quite a large peasant population still). In general, outside of the wealthy nations the petite bourgeoisie are something like 5-15% of the population, and the haute bourgeoisie make up significantly less than 0.3% of the population.
The Marxian theory, as such, concerned specifically industrial workers, because they were, by their own occupation, brought together in organized thousands at single sites of production.
Or, your atomic family.
Or heck, the bulk of the Neolithic.
Populations from hundreds of thousands to tens of thousands of people, over the course of millennia, in effectively completely egalitarian, likely communal societies.
And those are just the ones we’ve found.
Indus River Valley civilization may have been as many as 5 million people, no rulers, no social hierarchy, uniform housing, no monumental/elite structures or housing, no evidence of centralized power or government, standard weights and measures, collective infrastructure projects, etc etc.
It lasted roughly 1400 years.
So… no, you don’t actually need a small groups. You actually only really need it to be completely socially unacceptable for some to live in excess while others suffer.
In the entirety of human history, the only mechanism by which the human condition as a whole is improved is by applying a portion of the private surplus towards the public good. How much is a question of the moral character of the civilization in question.
In the 50’s, in the US, if you made over $200k (~$2.2million in 2025 dollars) you paid over 90% of every dollar earned above $200k in taxes. The top corporate tax rate was 52%.
I’d argue that the US is reverting to the average global experience precisely as its domestic market breaks down due to interventions — eg, destroying small businesses via regulation and mass importation of foreign labor.
Pretty sure this reflexive, luxury belief is not borne out by the data.
https://ourworldindata.org/grapher/world-population-in-extre...
Even if people have a roof of their own head and bread in their belly, they don't like living with anxiety about being able to pay off debt, or what would happen if they had an unexpected hospital stay. And above all, they don't like working so hard only for the value they produce to be sucked up and used to buy back stock for the benefit of billionaires.
https://en.m.wikipedia.org/wiki/High-Tech_Employee_Antitrust...
Also, in retrospect, this timing was funny. https://www.apple.com/newsroom/2009/08/03Dr-Eric-Schmidt-Res...