Anti-Capitalist Sentiment (with some morality)

[Renton]

I'm trying to figure out exactly what I think the government should be involved in. At this time I've a question for Renton: how do the free markets stop companies from colluding to not hire each others' employees as a way to suppress wages? Apparently reports are showing the big players in Silicon Valley have been doing this on the hush-hush. ISPs collude in other ways (keeping prices higher than they need to be), but also on the hush-hush, because if the colluding can be proven, some very important people would get in legal trouble. I think I can figure out how the markets would stop the ISP type collusion, but not the Silicon Valley type.

Well, there's no law in libertarianism against employer collusion, admittedly. Employers reserve the right to mistreat their employees as long as it doesn't violate the NAP, and employees reserve the right to negotiate better terms.

That's not to say however that there wouldn't be a ton of factors going against this type of behavior in a free market in the modern age. First of all its pretty risky for employers to engage in this behavior because it opens them up to being exploited by competitors who don't play ball. The threat of such competitors emerging would be ever-present, and it would take an awful lot of influence to get market-wide cooperation of this sort.

Second of all, who's to say there wouldn't be a market for transparency and fair business practices in a free market? Watchdog organizations would certainly pop up where people value such services. Employees can also cooperate, in the form of voluntary unions, strikes etc. Really what you're describing is the opposite of a worker's union, actally. It's an employer's union, and I think it's pretty logically incongruent to condemn one and condone the other.

Third, and this comes with the watchdog package, but with enhanced transparency on things like this you have the possibility for public outrage. Businesses don't want to risk ruining their reputation, or facing boycotts or other protests. This is a factor even if no one protests or boycotts because reputation protection is a preventative thing. It only takes the threat of reputation harm to lower the likelihood of shady actions.

Finally, you have substitution. These types of trusts/cartels/monopolies/whatever are often not worth the trouble of forming them because even if you are successful in doing so, customers can often substitute different products or services for the one you have cornered the market of. If some steel magnate monopolizes the industry and jacks up the prices, builders can just switch to concrete or heavy timber. If employers form a trust to pay X job a lower wage, that person can apply his skills to a slightly different discipline for a more competitive salary.