Let's say your value to most employers is $100k---this is the amount of money you make for them balanced against the amount you want in order to work for them.

Then the Goog enters the picture and is willing to add another $200k premium to that, in order to prevent you from working for that employer. This isn't sustainable; you're still you and your direct value to Goog is only $100k. The additional amount represents how much damaging a competitor is worth to Goog. As soon as the competitor goes out of business or Goog stops having piles of cash laying around to fight with other companies, that additional value evaporates.

If you decide to leave Goog, you should probably not expect to get $300k or more. In fact you may get less than $100k, if Goog has eliminated the competitors to whom you are valuable.

"Market rate" is extremely unstable.

Of course it's probably also possible for it to be that you're uniquely valuable to Google in the context of their other people, infrastructure, and strategy. Especially as people acquire specialized skills and experience, they can be worth a lot more to some companies than others.

This is true of everyone of course. Even a more or less commodity junior Javascript developer isn't worth much more than their generalized ability to do random tasks to a company that doesn't do any software development.

But some people have a skillset and track record that is very valuable to some companies but that would make it hard to be hired at most.

This economic theory depends on the idea that Google is the only well-capitalized software company... In reality there are several.

Market rates being unstable don't make them stop being market rates.

This. You can't define a market rate as being lower then a bunch of other employers are willing to pay. Your market rate is what people will pay you. I see this all the time with saying FANG pays above market rate. Now if we're saying "average" market rate, sure there is an average market rate for a larger group of developers that they pay above, but then you need to do a good job of talking about what other companies are paying relative to average or median, not just say one is above market rate because it is above what many smaller companies will pay

You can view this issue from another standpoint.

Imagine some market where 10 companies sell bread and it costs $5. And lets assume that the costs are $4 and $1 is profit.

Then comes a company that makes its money on selling water and it is doing very well. It comes to a bread market and starts selling bread for $3.

The competition is quickly destroyed and the bread prices rise.

Edit: as a sibling comment mentioned: https://en.wikipedia.org/wiki/Predatory_pricing

Sorry, but that's not what's being described here. If you want it to be about your bread market, then the water guy is hiring your best baker because bread is worth $10 when combined with water, but only if it's particularly good bread.

Maybe 50 of the other 99 bakers at the 10 bread-selling companies are also capable of making good bread and will feel bad, maybe the company that lost the baker will feel bad, maybe that company will even fail because it turns out that really was their best baker... but in that case, it just proves that the water company was paying the market price for that baker. Which they were.

Spending more on talent is not predatory pricing.

Google buys labor using the proceeds from the stuff they assign the labor to do. Their money does not come from a second market unrelated to programmers. Even if you flipped buyers and sellers your analogy would be inapplicable.

> Their money does not come from a second market unrelated to [those] programmers.

Yes it does: Google makes money from advertising, not from self-driving cars.

I believe a better analogy would be that the 11th company comes and is willing to pay higher costs while still selling at the same price. That company gets the best ingredients at that cost, the suppliers prefer to sell to that company, and denies it to the first 10 companies. The 11th company might even raise prices since their product is better. I don't think predatory pricing would apply in this situation.

Are you sure that there's the direct analogy between pricing and salary models like that?