Suresh Naidu: “Noncompete Clauses” Should Be Outlawed — but Not in the Name of “More Competition”
Professor Suresh Naidu wrote an article in Jacobin
The Federal Trade Commission has proposed banning “noncompete clauses” in labor contracts. It’s a win for workers, but the FTC’s rationale — a blind devotion to “competition” as the solution to injustices in the labor market — is wrongheaded and dangerous.
Earlier this month, the Federal Trade Commission (FTC) proposed a new rule that would ban noncompete clauses in labor contracts. The rule, which is part of the agency’s effort to enforce the federal ban on unfair methods of competition, has received ample coverage and support in the mainstream press. Yet it also raises a host of questions about the relationship between labor law, antitrust, and notions of competition.
In the following text, which first appeared on the website of the Law and Political Economy Project at Yale Law School, Columbia University economist Suresh Naidu reflects on the problematic yet widespread assumption that monopoly (or monopsony) power is the fundamental driver of inequality in the labor market and that “more competition” is the solution.
Read the full article here.