|
I can speak for a different market in a different country (but I also lived in the US for a decade): IT freelancing in Germany. I get paid well, but there is something really strange going on: I can't get my contracts directly. I always have to go through a company whose sole business it is to be an intermediate between the (large) company that wants to hire a freelancer and the freelancer. Note that those freelancers are not employed by that company and the relationship is pretty loose. The business pays the intermediary and they pay you, it's a per-project contract. The large companies won't hire someone directly even though they would save lots of money (and freelancers would get more). Suspicious as you guys are you probably think that well, there must be a logical business reason that it actually really is worth the additional money being spent on the intermediary. For example, finding and bundling lots of freelancer resumes. While that sure is a reason it isn't nearly sufficient for an explanation, not only because they actually do precious little for the money they keep. Also, the legal side can't be the reason either when I look at how the contracts between me and the intermediary are set up. To give one example from a very large client I worked for for 1.5 years as a freelancer, the reason I was told they go through the intermediary is that it makes their accounting much easier. Since I once worked for that company and experienced the exact same thing I was not surprised: When I worked for them in Silicon Valley I saved the company a lot of money by looking for an apartment myself. I ended up sharing one with somebody else. However, the expensive all-inclusive one-bedroom apartment I had had in Mountain View had the advantage that there only was a single bill (paid by corporate Amex card). The (far cheaper) shared apartment I got instead produced a handful of different invoices (furniture rental, cheques for the rent instead of Amex, etc.), so the company told me they would have preferred to pay the much higher amount from a single source. Which I don't quite understand - I do have some business background and understand accounting, in the computer age, what's the big deal? In the freelancer scenario they said it just works better with their SAP system then having lots of individual contracts. That company also had a big program to "streamline" and centralize their purchasing, which of course means having significantly less firms to deal with as a goal that overrides other concerns. So, it seems the large businesses prefer to work with other large businesses, no matter how much money they could save. We don't even need to argue whether and/or how much legal and business reasons are valid or not, I think the only thing that matters for the purpose of the discussion is that the effect exists, and that that means "market" is more and more a lie the more of a countries wealth creation is done by big businesses. You don't need to look for actual "monopolies" in the classical sense, those firms quite voluntarily restrict themselves (and again, the bottom line is that it exists, how justifiable it is from the individual firm's POV is a different question, let's assume they know what they are doing and that it makes sense for them). |