Thursday, April 30, 2009

Everyone's always blaming the free market for its failures, but joke's on them - it doesn't exist!

Consumerist has been pushing the Arbitration Fairness Act, which addresses the problem of mandatory arbitration clauses effectively voiding the very contracts and in which they are situated (except that part about mandatory arbitration), as well as the contract's relation to the laws of the United States, where most contracts contain these clauses.

Today they tell the story of a guy who lost his job when his prosthetic leg started giving him blisters and he started using crutches instead. Bullshit, right? He says that using crutches had hardly any impact on his job performance, but that he was told over and over that he had to use his painful prosthetic. Under the ADA, an employer is required to reasonably accomodate a worker's disability, and it sounds quite reasonable to me that a guy use his crutches when other options for mobility cause him pain and infection.

The running joke at Consumerist all week as they've been highlighting this act is, "Don't blame the free market for this - you don't have to sign that contract." This holds some water regarding purchases, but is totally bankrupt when it applies to getting or keeping a job with a discriminatory employer. My favorite so far has been:

To those saying that this is an example of the failure of free markets, no one has ever been forced to sign an MBA. Just as capital is free to move in a free market, so is labor. The OP could have taken his labor elsewhere or not signed a contract with an MBA. Now I am in no way in favor of MBA's, but this is not a failure of the free market because we, as laborers, have the ability to take our labor elsewhere if we don't like the policies of our employers.

What I don't get is why free-market capitalists get so upset when anyone impugns the honor of the free market. Who the hell cares about your poor widdow free market when it doesn't exist? Physically moving to where you can get work with a reasonable contract is a cost that a laborer can't necessarily bear. When supply moves to accommodate demand, there's some friction. This is perfectly obvious to anyone who lives in the real world, but apparently irrelevant to dogmatic free-market capitalists who think their tautology has relevance to anyone at all. If the market were perfectly efficient and free, then it would be perfectly efficient and free. Well, okay, but let's talk about the market in which this guy is trying to find a job - where MBA clauses are ubiquetous and good luck getting that negotiated out of your employment contract.

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