Noah Smith on Worker Compensation, Co-determination, and Market Power

Noah Smith on Worker Compensation, Co-determination, and Market Power

01/10/2018 by EconTalk: Russ Roberts

Web player: http://podplayer.net/?id=56191026
Episode: http://files.libertyfund.org/econtalk/y2018/SmithNcodetermination.mp3

Bloomberg Opinion columnist and economist Noah Smith talks with EconTalk host Russ Roberts about corporate control, wages, and monopoly power. Smith discusses the costs and benefits of co-determination–the idea of putting workers on corporate boards. The conversation then moves to a lively discussion of wages and monopoly power and how the American worker has been doing in recent years.

As episodes go, this was a bit of a mutual admiration society between two people who don’t agree – Russ Roberts kept going “Oh, I like your methods and your epistemology, Noah.” Now that I think of it, it may not have been that much of a mutual admiration episode, as Russ Roberts was the one expressing all the admiration.

Anyhow. It was an interesting episode, if not one that was terribly novel. Noah Smith talked about the possibility of worker representation on corporate boards and its potential benefits (theoretically, more revenue being diverted either to wages or rainy day funds instead of profit distribution; and better decision making since worker inputs were being taken) but also threw up his hands and said it was impossible to predict.

On monopoly power, Noah Smith made the fine point that monopoly in an industry by itself, or monopoly in a geography by itself can’t cause wage suppression; but taken together, they will.

I didn’t think about it during the episode, but now that I’m writing it out; I’m remembering Jane Jacobs’ talking  about all the ancillary and support industries that would spring up in a normal industrial city, and about how factory towns where purchase and spares supply happens in a centralised way choke this process. Hmmm.

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