From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Sun Apr 20 2003 - 00:11:23 MDT
----- Original Message -----
From: "Lee Corbin" <lcorbin@tsoft.com>
To: <extropians@extropy.org>
Sent: Sunday, April 20, 2003 12:29 AM
Subject: RE: Coordination problem
> Rafal writes
>
> > > > ### According to game theory, certain strategies are
> > > > inherently unstable due
> > > > to the coordination problem. Forced coordination,
> > > > as in legislation to impose a monopoly bargaining
> > > > entity in the form of labor unions, or to stop
> > > > individual bargaining for wages, does solve the
> > > > problem, which is why immediately after the imposition
> > > > the law there is an increase in income to
> > > > the beneficiaries of the law (as in unionized workers).
> > >
> > > I don't know what this BS about coordination is all about,
> > > but I do see that you are pointing out that for a particular
> > > set of workers, their wages will go up if it's mandated some
> > > way, or they achieve it some way through bargaining.
> >
> > ### You might want to read about the coordination problem at
> > http://william-king.www.drexel.edu/top/eco/game/game.html.
> >
> > The "queuing game" is quite enlightening.
>
> Yes, that's fun. (There are many obvious things that airlines
> could do that would minimize discomfort, although I believe
> that people are sufficiently irrational that most of them
> would not be accepted by the herd boarding the planes.)
>
> > Formation of an effective monopoly does increase
> > the potential income of the monopolist compared
> > to a competitve equilibrium. This is uncontroversial, I
> > hope?
>
> Yes, with stress on "potential". It's not so clear that
> in practice monopolies are as bad as is commonly thought;
> Rockefeller, for example, might not have been able to
> maintain his if gouging had been his objective.
### His monopoly wouldn't last - because under market conditions monopolies
tend to break down except in some unusual circumstances (extreme
concentrations of land ownership, very steep entry costs, etc.), but a
state-imposed monopoly (like a state-mandated union law) does last, and will
cause long-range damage to the economy. Monopolies are bad if they exist,
but contrary to conventional wisdom they are not a feature of most types of
market economy.
-----------------------
>
>
> > > Okay. But what about the following *immediate* effect:
> > > if all the janitors in the U.S. get their wages doubled
> > > overnight, then [more janitors are *immediately* without
> > > jobs]. Likewise, if all unions were busted tomorrow (by
> > > equally magical fiat), then the total number of employed
> > > persons would *immediately* go up. Right?
> >
> > ### Not immediately in the latter situation.
> > BTW, you don't need to "bust" labor unions,
> > merely abolish the laws that mandate their
> > formation.
>
> What is the technical definition of "busting" a union? ;-)
### Sending in the Pinkertons?
Rafal
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