Just because Karl Marx was a scatterbrained fool whose theorising led to the deaths of hundreds of millions doesn't mean that he was always incorrect. And we can use one of those rare occasions when he was correct to think about these allegations that Google, Apple and various other high tech companies had a no poaching agreement between themselves.
We should note that at the moment all we have is allegations that they worked together to make sure that they were not trying to hire or poach engineers from each other. It's still up in the air as to how and whether this matter will go to trial:
A U.S. judge ruled that a lawsuit alleging a broad conspiracy among Silicon Valley companies not to poach each other's employees cannot proceed as a class action for now, but left the door open for workers to eventually sue as a group.
In a decision released on Friday, U.S. District Judge Lucy Koh in San Jose, California said the five software engineers suing Apple Inc, Google Inc and five other companies have yet to show enough in common among the proposed class members to allow them to sue together.
The specific allegations are that:
The defendants were accused of violating the Sherman Act and Clayton Act antitrust laws by conspiring to eliminate competition for labor, depriving workers of job mobility and hundreds of millions of dollars of compensation.
Essentially, the allegation is that the companies agreed not to try and poach each others employees. Given that to poach an employee you've got to offer a better deal this would, presumably, keep wages lower than they would have been if poaching had been going on.
And we might think, well, boo hoo. Who really cares about already very well paid engineers not getting another rise and a chunk of stock as they switch companies? The answer to that question is that such collusion, if indeed it happened, strikes at the very heart of what makes the capitalist/market system so enriching for the average Joe. This capitalist/market system, the only socio-economic system we've ever stumbled across that actually provides sustained and large improvements in the standard of living of the working stiff, only works if employers cannot so collude. It really is that important: it's at the very centre of what makes it a decent way of organising the world.
Karl Marx laid it out pretty well in his warnings about monopoly capitalism. Of course, he was entirely incorrect in his musings that monopoly was inevitable in capitalism: but spot on with why said monopoly would be undesirable.
He pointed out that advancing technology made labour more productive. This meant that a capitalist employing labour could thus make greater profits from the employment of that labour. At which point there are two alternatives. If there is monopoly capitalism (what we would now call monopsony, only one buyer of the labour of the workers) then the capitalist's profits just keep going up and the workers are left with the pitiful wages that they first started with. We can get to monopoly capitalism by there actually only being one employer (as in, say, a company town, a reason why company towns are so often awful) or by all of the employers colluding with each other.
The other alternative is that the capitalist sees that the labour is now more productive, that he can make greater profits from employing it. Thus he desires to employ more people so that he can increase his profits. If there's a large number of unemployed then he can just go and get some of them and his profits do increase. However, if the job market is tight then he can only gain that greater amount of labour by attracting people from other firms. To do this he's going to have to increase wages. At which point, all of the capitalists have to start thinking about raising their wages: they're in competition with each other for the profits that can be made by exploiting the workers. It's this mechanism that makes wages rise (usually, not necessarily right now, but over time) along with the productivity of labour. That competition among employers for the labour that makes the profits drives up wages.
Given that then we can see that if the employers collude not to attract labour away from one firm to another, then wages aren't going to rise as a result of the competition that is no longer there. Profits rise but wages don't.
Marx entirely got the point that it isn't actually capitalism which improves the life of the average individual. It's the competition in the market that does. A capitalism untempered by such market competition would indeed leave the standard of living of the general population entirely stagnant.
It's one of the little absurdities of history that the only place that ever really did have monopoly capitalism, only had one single monopsonistic purchaser of labour, was the Soviet Union and its various communist offshoots. There was no market competition for labour and living standards really didn't rise very much over the decades. As Marx would have predicted but those claiming to follow his precepts seem to have ignored.
I don't know whether Apple, Google and the other tech companies did collude. We'll have to wait until the case has wound its weary way through the court system to find out. But the above is why the allegation itself is so important. Collusion between employers to hold down wages undermines the very foundation of this capitalist, free market hybrid that we have. It actually stops it from working to the benefit of Joe Sixpack and, given that improving the life of Joe Sixpack is the whole point of having an economy at all, such collusion becomes a very serious threat to the whole system.
