What's wrong with dog eat dog?

[Barney]

I think there are many examples of government behaving foolishly because of good sounding motivations like "anti dog eat dog". You yourself have expressed criticism for competition.

I've been thinking about the whole question of "dog eat dog" and competition and I want to clarify something.

Ayn Rand makes a clear and compelling point about the value of competition for business and the foolishness of trying to eradicate it by government legislation. But that's not a particularly unique point. Most politicians I have heard value free market competition.

What I am critical of is a business using rock-bottom pay rates to treat its employees poorly, using the excuse that they are not slaves, are free to leave, but stay because it's "better than the alternative." If you want to call that competition between employer and employee, you can, but it's of a different order entirely. When all the power is on one side, and the other side has little to bargain with, then it can be called exploitation - taking advantage of someone in a desperate situation. That, I am critical of.

[Ondrej]

I see your point and I sympathize with the dire straights people find themselves in. But I don't think it is competition between employer and employee that creates this situation. It is the competition between employees. By virtue of the fact that they are better off with some employ rather than none, they will take what they can get. This speaks to the dire straits in general, of everyone. If they were not in such dire straights they would not be willing to work under such conditions. What the workers need is more options and less workers. If the market is awash with workers the pay (and safety standards) necessarily goes down as everyone is desperate for some work and there is not enough to go around. The compassionate immediate solution might be to boycott whichever company is taking such advantage of their workers. But in doing so you take their pay away and send it to some other workers less desperate for pay and more concerned with their working safety. In other words you remove it from the most desperate people and give it to those who have more. There is something to be said for this approach in that it pressures companies to maintain some basic standards for treatment of their employees. But the flip side is that it may price certain endeavors out of the realm of possibility and no company at all is willing to "take advantage" of those workers. Why bother setting up a factory in Cambodia if the product can just as cheaply be made in Germany?

This point was laid out very clearly in "The Undercover Economist" which you gave me many years ago (or maybe the squeal which I also ready).

[Barney]

I agree that the situation is complex, and we could easily do more harm than good with the best of intentions. But that is not a reason to forget about the whole problem and return to doing whatever pleases ourselves best.

Let's take the case of Amazon as an example. For the last 7 years, I've boycotted Amazon, and bought products through their competitors even though they are more expensive. It has made me poorer than I might have been. Now assume everyone does the same as me. Sure, it's bad for the Amazon employees who lose their jobs when Amazon has to make cuts. But at the same time, the competitor businesses will be growing and seeking further employment. Where are they most likely to hire people from? The people who were fired from Amazon. So eventually, all the employees who were treated like dirt, are moved to employers who don't treat them like dirt. The customer is a little poorer as a result, but I'm hardly begging on the streets. I have bought fewer books than I might have done - books I probably wouldn't have read anyway. Everyone wins.