Friday, June 16, 2017

How Common are Non Compete Settings? Or, You Don't "Own" That!

Now that I think about it, there seem to be examples everywhere I look. For instance: Why does it bother some schools, when their teachers gain additional work related income beyond salaries? Consider the framing, in "Teachers are Making Millions Selling Their Lesson Plans Online". From the article:
Some legal experts argue that the resources teachers produce while working for a school district may actually be the property of the school district.
Yet behind the stories of a handful of millionaire educators, is a different reality of low cost provision, for time savers that include the teachers' ingenuity. Marketable lesson plans are certainly practical, given the fact schools don't compensate teachers for the hours in which they prepare for classes. In yesterday's post, I noted time saving mechanisms such as these as a useful form of fixed (human) capital, which contrasts with the working capital employers often expect employees to provide via their own time and resources.

Alas, public institutions appear to be following the lead of closely held knowledge use in private sectors - much of which takes place as non compete agreements. Even as policy makers become aware of consequent limits to long term growth, many such restrictions are local in nature, which also factors into the difficulty of a broad based response. The growing atmosphere of closely held ownership - regardless of subject or object - has become so widespread, it even translates into cultural appropriation outrage, something I never expected to witness in my own lifetime.

Apparently, cultural appropriation has become the latest version of you don't "own" that, so you can't use it! Some of this ownership hoarding, which is just as impractical as money hoarding, has been around for a long time. In the seventies, a friend made improvements in lab work which were appropriated by the company, but with no recognition of his contribution. Almost two decades later, while preparing to open a bookstore, I found myself unexpectedly making certain no legalities stood in the way of doing so. That's when I first became aware of non compete agreements.

Miles Kimball recently touched on an anti-growth aspect of non compete settings in storified tweets with Dan Abrams. Kimball wrote:
To do better at state level, Dems should push pro-growth occupational licensing reform as Obama Administration did.
To which Abrams explained that while this would be good policy, it would unfortunately be poor politics, because
There's an organized block of current licensed hairdressers. No block of future hairdressers.
Again, helping those who lack economic access, remains a thousand battles in a thousand places - and many places lack a sufficient organized block, on the part of those who seek entry. However, even though national governments are in no position to force greater competition on anyone, they do have the option of backing new settings in which people have sufficient production rights to recreate non tradable sector growth. This is an important reason why I've suggested alternative equilibrium settings, as a single organized productive response to the closely held ownership which stifles economic dynamism.

Such settings would be clearly delineated to a degree that all concerned, understand the potential of the knowledge which could be shared, and the new forms of construction which could take place. In the future, communities might once again be willing to embrace competition, if they see how it in fact can contribute to long term growth. If we are able to create economic settings where the use of knowledge is more widespread, perhaps some of the present day cultural backlash will fade away as well.

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