Free market forces at work, the way they should be

There’s a much publicized (in SV) trial going on over an oligarchic wage suppression scheme that was in force between a number of big players in SV. Apart from Facebook that is.

Techcrunch has the details.

What transpires when free market forces are allowed to work with their invisible hands unconstrained? Simple.

And what happens next is precisely what is supposed to happen when companies don?t collude to defraud their employees of fair-market wages: Google coughed up more money to improve its retention.

Kudos to facebook for doing the right thing, though in all honesty, I don’t attribute this to being altruistic on their part. They were in the drivers seat, needing talent, and had the largest likely liquidity event coming up. It stands to reason that they would attract the best and brightest.

And after the facebook IPO, twitter did this. And so on.

This is what happens when market forces work their magic. And when you attempt to suppress the market forces with anti-“poaching” or attempts to massively increase the supply of workers via H1B visas or stuffing grad schools with tremendous numbers of people, an order of magnitude more than the market for their skills can accommodate …

… this never, ever works in your favor in the long term. Or in the short term. Even if you think it does, the data suggests that tampering with a market is never a good thing.

The market will correct around you. And render your fix irrelevant. Or damage your environment in profound ways.

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