Freedom has no noncompete with propaganda.

Many people would likely see it as an obscure topic reported in a minor venue, but Christian Winthrop’s recent article in The Newport Buzz about the Federal Trade Commission’s (FTC’s) move against noncompete agreements hits three distinct notes that fire me up.

The first is that it is unambiguous propaganda:

In a landmark decision aimed at fostering competition and protecting workers’ rights, the Federal Trade Commission (FTC) has issued a final rule banning noncompete agreements nationwide. This ruling, announced today, is poised to unleash a wave of innovation, bolster job mobility, and promote the formation of new businesses across the United States.

The article — or activist press release that Winthrop published as if it were an article — does not substantiate any of these claims or offer any indication of contrary arguments.  It simply continues rolling out the one-sided promotion.

The second outrage is the destruction of due process that the article celebrates.  The FTC, for those who’ve lost track of government’s moving parts, is not Congress.  Its members are not elected.  Rather, elected officials have some partial say in their selection, among all the other appointments and policies they must negotiate and balance.  That raises the bar for any democratic correction of the FTC so high as to be unreachable.

The article’s attempt to paint a veneer of legitimacy on the process is laughably insulting:

The FTC’s decision comes after a thorough review process, which included a 90-day public comment period during which over 26,000 comments were received, overwhelmingly in support of the ban on noncompetes.

The commission announces a possible change in some place that most Americans wouldn’t know to check and gives those who discover it no more than three months to respond and attempt to organize an opposition.  Little wonder comments are “overwhelmingly in support”; the advocates have all the advance warning they want.

Not that this matters.  The commission doesn’t have to consider the arguments at all.  The letters are merely representation theater, at best helping the bureaucrats to gauge how much opposition they’ll actually face and, maybe, raising a novel point that’s so powerful they’ll turn against the activists they’d intended to serve.  In the end, three of five commission members can impose sweeping rules that change existing contract agreements out from under the parties who agreed to them.  Three people.

The final irksome note in the article is the blissful ignorance of the people making the decision — and reporting on it.  Consider:

FTC Chair Lina M. Khan emphasized the significance of the ruling, stating, “Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned.”

This is completely inverted.  Much of my work, with both start-ups and well-established companies, involves helping different parties work together to innovate.  Noncompete clauses are often essential to building the confidence for collaboration.  Confidence that proprietary, or even merely innovative, systems will remain confidential and an advantage versus competitors decreases risk and therefore increases the ability to pay higher wages, explore new ideas, and inject the economy with dynamism.

What accounts for those “8,500 new startups” Khan touts?  If they materialize, it seems likely she means they’ll be taking the experience for which their employers have been paying and compete against them.  This change will decrease the trust by which a dynamic economy thrives.

Even the ruling of itself does immeasurable harm.  Simply the knowledge that the United States invests these unaccountable boards with the power to modify contracts on the fly makes business in our country riskier.  Add in the fact that our society now lacks the benefit of a skeptical news media (at least when Democrats are in charge), and it’ll soon be a wonder if anybody invests their own resources to innovate, at least in a collaborative way with people outside their families or tribes.


Featured image by Justin Katz using Dall-E 40 and Photoshop AI.

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