For those of us who believe in the market system, there is something unsettling about the thought of the billionaire bosses of Google, Apple, Adobe, Intel, two Disney subsidiaries, and Intuit sitting around a table and agreeing not to compete for staff. Facebook declined an invitation to join the conspiracy. These are the self-styled “disrupters”, believers in the virtues of a market system that allows them to compete for customers even if, especially if, that competition destroys existing enterprises. Not having read Schumpeter to his conclusions, they are advocates of the gale of creative destruction that propels living standards ever forward.
Unless, of a course, a faint breeze of competition wafts through the Silicon Valley labor market. Then competition for staff becomes “poaching”, a process that might start a “wage war”, putting a dent in their petty cash piles. So they agreed not to compete for staff, but denied that they did so to depress wages so that their earnings might be increased by an amount probably equal to no more than rounding errors in their earnings statements. “If you hire a single one of these people [Apple engineers], that means war,” Steve Jobs emailed his Valley peers. To avoid creating “a paper trail over which we can be sued later,” Eric Schmidt, then Google’s CEO, and Paul Otellini, Intel’s CEO at the time, confined themselves to emails–reflecting a charming faith in the confidentiality of emails of the sort that have made several Wall Street traders involuntary guests of the government–and to what Otellini called “a handshake ‘no recruit’” agreement. At one point, Schmidt agreed to fire a recruiter who had solicited an Apple employee.
