This article is badly informed and badly reasoned.
Adam Smith - An Inquiry into the Nature and Causes of the Wealth of Nations
” It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest.”
In those places, you are willing to pay the most since it will make you the most.
Brooke’s Law
Wikipedia
“ Communication overhead increases as the number of people increases. Due to combinatorial explosion, the number of different communication channels increases rapidly with the number of people.[3] Everyone working on the same task needs to keep in sync, so as more people are added they spend more time trying to find out what everyone else is doing.”
You want to cluster people together since distributing people creates communications overhead.
Adam Smith also explains why innovation tends to cluster. It is because communication lets learning and innovation occur more rapidly.
Lastly, labor moves to where there are the highest wages.
You saw all this the last 10 years. Facebook willing to pay top dollar. Companies growing their offices bigger and bigger. People moving to Silicon Valley for the money. Silicon Valley companies copying best practices in the blink of an eye.
It also explains why Zoom has such good margins. Their engineering wasn’t distributed. It was in China. Labor arbitrage but with a minimization of communications overhead.
Companies don’t attack all markets at once. They attack them one at a time (usually local market first).
It is in fact in an efficient market that you have disparities in wages.
Adam Smith - An Inquiry into the Nature and Causes of the Wealth of Nations
” It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest.”
In those places, you are willing to pay the most since it will make you the most.
Brooke’s Law
Wikipedia “ Communication overhead increases as the number of people increases. Due to combinatorial explosion, the number of different communication channels increases rapidly with the number of people.[3] Everyone working on the same task needs to keep in sync, so as more people are added they spend more time trying to find out what everyone else is doing.”
You want to cluster people together since distributing people creates communications overhead.
Adam Smith also explains why innovation tends to cluster. It is because communication lets learning and innovation occur more rapidly.
Lastly, labor moves to where there are the highest wages.
You saw all this the last 10 years. Facebook willing to pay top dollar. Companies growing their offices bigger and bigger. People moving to Silicon Valley for the money. Silicon Valley companies copying best practices in the blink of an eye.
It also explains why Zoom has such good margins. Their engineering wasn’t distributed. It was in China. Labor arbitrage but with a minimization of communications overhead.
Companies don’t attack all markets at once. They attack them one at a time (usually local market first).
It is in fact in an efficient market that you have disparities in wages.