Matt Bruenig has penned a piece in response to a post by Adam Ozimek of Economy.com called “Regulation and Private Laws” in which he argues that the refusal by the state to enforce “private laws” is an act of deregulation. While Bruenig may not be incorrect in that view, he applies incorrectly applies it in order to criticize Ozimek.
Bruenig has interesting definitions of the words “regulation” and “deregulation.” In the original piece, Ozimek writes:
Reports in the media tell of U.S. workers being charged for uniforms, assigned irregular and inconvenient shifts, or not paid for time spent on security lines as they enter or leave work sites. The latest of these involves a sandwich chain that allegedly asked its line workers to sign noncompete agreements.
Bruenig responds to this by saying (note that he omits the first sentence in his article):
I found this quote interesting because people who are upset about these kinds of noncompete agreements are not actually calling for new regulations. Instead, they appear to be calling for deregulation. That is, they are advocating that the state refuse to involve itself in the matter of noncompete agreements.
No one that I know or have ever come across would refer to deregulation as the government not enforcing a contract or agreement created by private parties, i.e. private law. Regulation, in its generally accepted definition, is the state imposing certain rules that must be followed by parties engaging in some sort of agreement. Failure to follow these rules would make the transaction or agreement not only invalid but also impermissible.
Bruenig is not completely incorrect in his statement that people don’t want the state to enforce noncompete clauses, but the state refusing to be the arbiter of a dispute over a noncompete agreement is only half the story. This issue here is that Bruenig appears to be ignoring the reality of what “people who are upset” by these matters actually want. If someone were to say, “I want the government to start regulating noncompete agreements,” almost no one would interpret that as the person saying, “I want the government to enforce noncompete agreements made by an employer and its employees.” What the person really means is “I want the government to set rules about how and if noncompete agreements can be made.”
This is very different from what Bruenig says. People who are upset about noncompete agreements don’t simply want the government to ignore their existence and to allow the employer and employees to “work it out amongst themselves.” They want the state to punish those who would attempt to enforce a noncompete agreement or at least prevent an employer from disciplining or firing an employee who refused to accept one as a condition of their employment.
Ozimek goes on to touch on the topic of minimum wage. Does Matt Bruenig think that the government regulating wages mean that it would only enforce agreements made by private entities? Or does he think that to “regulate” wages means that the government would dictate to employers what the guidelines for setting wages are, such as minimums, overtime, etc? Surely he would agree that it would be the latter. So why would he argue the former for a different aspect of private contracts?
On the surface, it may appear as though Bruenig is demonstrating that Ozimek is confused, but that is only because Bruenig fabricates his own definitions of “regulation” and “deregulation,” which are outside of any mainstream explanations of the terms.