In the case of the union, their wages were probably artificially high due to the government keeping out competition.

> someone would come in to fill in the void

If a good or services is demanded by the consumer, then someone will find a way to satisfy that demand, barring market interference by the state (for legal business - you get black markets otherwise).

That can coordinate and tackle the scale of problem of New York waste disposal?

Come off it, you’re going to fall and hurt yourself.

Someone who collects your garbage for a dollar and takes it to the dump is not violating a regulation prohibiting them from dumping it in the river or your yard.

The problem is the regulations that prohibit them from doing nothing actually wrong while not fulfilling some arbitrary formality or greasing the right palms.

Those regulations about waste management didn't happen in a vacuum. They're not just there to cause headaches or corruption. They were created in response to observed problems - like dumping trash right into rivers. And that "trash" might include really dangerous substances. Moreover, the raw profit motive of capitalism encourages such behavior. If it costs two dollars to dispose of the waste safely, or one dollar to drop it in the river, the market's response is to drop it in the river. That's just free market economics. Tragedy of the commons is an actual thing.

The economic term for this is externalizing costs. The market, on its own, is strongly motivated to externalize costs whenever possible. There's no inherent morality to economics, any more than there is an inherent morality to thermodynamics. It's just a fact of nature. But externalized costs are a form of theft - they push cost of business onto the general public, without payment. Regulations exist to keep business from stealing from the rest of us.

You may be the one missing the point. What prevents ordinary people from taking trash to the dump for $1? Regulation.

> If it costs two dollars to dispose of the waste safely, or one dollar to drop it in the river, the market's response is to drop it in the river. That's just free market economics. Tragedy of the commons is an actual thing.

And if it costs one dollar to dispose of the waste safely but incumbents can charge two dollars if they get a law passed to impede competition, the market's response is to get a law passed to impede competition. That's just "free" market economics. Collective action problems are a real thing.

> The economic term for this is externalizing costs. The market, on its own, is strongly motivated to externalize costs whenever possible.

It's also motivated to internalize benefits, which organizations do through the mechanism of regulatory capture. And those regulations exist to enable businesses to steal from the rest of us.

In this light, regulation isn't an impediment to business - it's an opportunity. By making the task more difficult, we make it more profitable.

Now, I'm sure you're anxious about some sort of corruption where businesses collude with government to lock out competition. So, tell me... what is a contract? Is it anything other than a regulatory mechanism to exclude competition?

Suppose you start the BuckABucket Trash Company, and charge a buck. I hire you because you're cheap. Then you come back next week and find out I've ditched you for GayNinety Trash Company, who charges 90 cents. Sucks, right? Makes it very hard to commit capital to the business! You just bought a truck and everything. The way you prevent this behavior is by locking me into a contract - you'll take out my trash for a buck, but you get to do it for the next year. Everyone wins. I get cheap reliable trash service, you get a steady customer.

Except now we've just regulated away your competition. Funny, that.

Really, put down the right wing ideology feed about economics and think about how it actually works.

In any real system with non-zero scarcity, profit is relative. If you have less of it in one place there is more of it in another. In the case of things like garbage collection, the other place is when consumers use the money they didn't burn on artificially wasteful trash collection to buy something else. Which benefits both the consumers and the suppliers of the other product.

Creating friction on purpose to artificially increase the profits of one industry is a deadweight loss. The transfer of wealth is the broken window fallacy but the resources wasted on the artificially imposed friction are real.

And many types of contract are a violation of antitrust law for exactly that reason.

As I've pointed out, contracts are friction. And, since profit without friction is impossible (scarcity is just one form of friction), contracts are a Good Thing, a thing that makes capitalism viable.

Illegal monopoly behavior is just a pathological corner case of contract law, and it's silly to focus on it. Consider an alternative - you contract me for a service, and I reduce my costs and increase my profit by simply not providing that service. This isn't exotic. This is common as dirt, happens every day.

Because that's what we're talking about -- the thing that prevents an ordinary person from collecting trash for $1 and taking it to the dump in a way that doesn't involve externalizing costs or doing anything nefarious, yet is still prohibited.

There are approximately zero people who think it should be legal to dump trash in the river.

> As I've pointed out, contracts are friction.

Except that contracts are anti-friction. If you have someone collecting trash for $2 even though it costs $1 because they're the only one with a truck (so scarcity), someone else might be willing to buy a truck and do it for $1 but only if they're guaranteed the business for a period of time sufficient to pay off the cost of the truck. So the contract reduces friction by $1.

Your claim is that it then prevents it from being reduced by another $.10 when the first guy offers to do it for $.90 to try to regain the business, but the only reason that would happen is that the contract allowed the second guy to enter the market. And you can do all of this negotiating before signing with anyone -- go to the first guy and demand $.90 or you'll sign with the second guy for $1. Then the existence of contracts gets you to $.90 when otherwise you would be stuck at $2.

You may not even need to actually enter into the contract for the existence of contracts to reduce friction, because each provider knows you could enter a contract with the other and at least one would prefer to provide you service at a low price with no contract than have you sign with the other guy.

> And, since profit without friction is impossible (scarcity is just one form of friction), contracts are a Good Thing, a thing that makes capitalism viable.

Unless you're just defining friction to mean scarcity, I'm curious what these other forms of friction are that can produce profit without scarcity.

For example, adding any amount of friction to the process of producing table salt by chemical reaction isn't going to make table salt more expensive because there is so much in the ground that even a hard prohibition on manufacturing it chemically wouldn't materially affect the market price.

And the fact that profit comes from scarcity still doesn't mean you ever want more scarcity on net as a society -- there is plenty of "real" (no known way to avoid) scarcity to profit from without wastefully creating more on purpose.

> Illegal monopoly behavior is just a pathological corner case of contract law, and it's silly to focus on it. Consider an alternative - you contract me for a service, and I reduce my costs and increase my profit by simply not providing that service. This isn't exotic. This is common as dirt, happens every day.

And then you get sued for breach of contract, the judge orders you to make good and now you have that expense plus the legal expense. How is that supposed to increase your profit?

Unless you mean breaking the law and getting away with it, but in that case what's even more profitable is bank robbery, right?

The reason these things are all illegal is that they're a form of conduct that increases rather than reduces friction, which is why they're against the law. Because friction is bad.

I had the impression that profits are derived from the reduction of economic friction. The more efficient a process is the more profit it can produce (compared to a less efficient process).

If the chef can make dinner for 30 people in an hour at the same price per person, now the restaurant is more profitable because there is less friction -- 30 people eat in one restaurant instead of 10, so for 30 people you need one chef instead of three, one building instead of three, etc. Less friction, more profit.

What you need for profit isn't for you to have friction, it's for someone else to have more than you -- relative advantage. The more you eliminate the more profit you make. Or the more surplus ("consumer profit" if you will) you create for the customer, if you have similarly efficient competitors engaged in price competition.

And that's where regulatory capture comes in. In competitive markets a large fraction of the total surplus goes to the consumer because otherwise a competitor could gain market share by charging lower prices. 100 times $6 is more than 50 times $10. But if you exclude competitors with regulations then you can charge $10 margins and still have 100% of the customers. Then there is more "profit" but not more total surplus -- there is less total surplus because the artificial friction consumes some of it. So you're shrinking the pie in order to get a bigger piece of it for yourself, at the expense of everyone else. Which is effectively stealing.

The law of private property. Thats not regulation.

Do they get access to the dump for free? Round my way access to the dump is something in the region of €6 ...

Presumably the professionals have economy of scale and a prerential fee schedule to work with ...

I don’t think we need regulation to explain this economic phenomenon. Basic laissez faire works fine.

Commercial carting (everything but households and public trash cans) in NYC is done by enterprising people with some regulations that get flouted because of the impossible time pressures they're put under. They die and are injured at a terrible rate. https://www.propublica.org/article/trashed-inside-the-deadly...

For the meagre effort of keeping a few extra tabs (something they were already used to) they could earn increased reputation or advertisement (while you go the pub 'bank' you might as well have a drink on your way out). The realy price at which people start providing banking functionality is much lower than the average wage of a banker (the banking sector is permission oriented!).

The price to get non-garbage collector to start collecting garbage tends to be much higher than the average wage of a garbage collector (the underbelly of society is obligation oriented!)

Stated otherwise, if everyone received the average rent, wages for dirty/unhealthy/boring/complicated/... jobs would rise, simply because they can stay home and live cheap. This would be the most neutral and emergent determination of wages since there is no master table from Washington/Moscow/Brussels to decree the relative wages. No need for endless protests and strikes.

Examples:

- dirty: toilet cleaner, garbage collector

- unhealthy or risky: fire fighter, chemical sector

- boring: monotonous factory work, high quality assurance inspection

- complicated: physics, engineering, ...

This does not mean everyone would end up with the same wage, the more collectively undesirable a job, the higher it would earn on top of your average rent.

There are plenty of other interpretations here. The simplest one is that in NYC trash collection is treated as municipal infrastructure, not a commercial business. People already pay taxes for garbage collection, so it's highly unlikely they'd decide to also pay vendors in short order.

What makes you think they didn’t?

The scale of the problem in New York means you’d need an awful lot of such individuals to keep up and the workforce isn’t that flexible ...

These guys work very hard and in a highly coordinated way that is hard to replicate. Which was the point that they were proving by going on strike.

Bankers in Ireland in the 70s not so much though if it happened in Ireland today it might be a different story ...

When talking about labor and unions, this is essentially a tautology because the power of unions is the power of collective bargaining.

Collective bargaining cannot obtain unless all human capital (laborers) is deployed through the union. Human capital that is outside the union fractures the power of the union and destroys the power of collective bargaining.

In vulgar terms, human capital outside the union is referred to as "scabs" that temporarily heal the wounds produced by a labor dispute.

EDIT: readability, grammar

Yes, there are laws to protect unions. You cannot look at that in isolation. There are also laws to prevent some types of collective bargaining. Think of it more as a negotiated arrangements - unions agreed to avoid some behaviors in exchange for certain legal rights.

For example, in a free market, a union should be able to use its collective bargaining power to negotiate a closed shop arrangement with an employer. This is illegal in the US. In the same free market, employers can agree to blacklist people because of their union membership. This is also illegal in the US.

We could remove all laws which would protect unions, leaving them hobbled by all the laws which prevent them from fully exercising collective bargaining. But pressure builds up, as you can see by the (successful) wildcat strike this year by teachers in West Virginia.

> If some enterprising people in New York had tried to set up their own ad hoc sanitation service

they would also be doing very useful and important work (would just be paid even less perhaps).