Valve Software: free marketeer's dream, or nightmare?

The first anti-cap software company.

Valve Software's chief economist, Yanis Varoufakis, has a post up detailing the strange corporate structure of the company, famous for its string of hits from the Half Life and Portal series to Counterstrike and Team Fortress, as well as its mammoth digital distribution network Steam.

The whole post is fascinating as an introduction to the area of economics known as theory of the firm, but the really interesting part is his description of how the famously hierarchy-free company is actually practicing the free market even within the workplace.

If you work in Valve, you are given a desk with wheels, and told to spend all of your time on projects of your own choice. Obviously at the extremes, there is still control – if "projects of your own choice" means spending every working hour laying down slap bass grooves for your funk garage bank, you'll probably be asked to find employment elsewhere – but the company is serious about what it says. If an engineer on Steam wants to contribute to a marketing piece about Portal 2, they can. The company is fastidious about hiring all-rounders, and an earlier profile of the "Valve method" contains the killer explanation

The first thing you should know here is that Gabe [Newell] is on top, and there are 249 people below him. That’s the whole hierarchy

That number has gone up now – to around 400 people – but the pattern remains the same.

Some might be tempted to describe this collective model of the company as the ultimate example of anarchist organisation in action, but Varoufakis sees it as the exact opposite: a rare entry of free market ideals inside the corporation, which is normally – indeed, according to the arguments of Roland Coase, definitionally – an area characterised by the absence of market principles. 

Varoufakis writes:

Each employee chooses (a) her partners (or team with which she wants to work) and (b) how much time she wants to devote to various competing projects. In making this decision, each Valve employee takes into account not only the attractiveness of projects and teams competing for their time but, also, the decisions of others. The reason is that, especially when insufficiently informed about projects and teams (e.g. when an employee has recently joined Valve), an employee can gather much useful information about projects and teams simple by observing how popular different projects and teams are (a) with others in general, (b) with others whose interests/talents are closer to their own.

Just like in a marketplace, everything in Valve is in flux. People move about (making use of their desk’s wheels), new teams are formed, new projects are concocted. All this information is observable by the naked eye (one notices an empty spot where David’s desk used to be, and then finds out that David moved to the 4th floor to work with Tom, Dick and Harriet), on the company’s intranet, in cross-team meetings where teams inform each other on what they are working on). People learn constantly, both by observing and by doing, the value to them of different projects and teams. These subjective values keep changing, as the time and team formation signals that are emitted by everyone else are updated.

So the perfect anarchist collective is actually the perfect capitalist corporation? Maybe, maybe not. The crucial thing about Valve's "market" is that it doesn't actually use money. Although much of the advantages of a real market can be analogised over to this system, it loses some pretty crucial aspects. If you are bidding with your time and attention, although others may try to win you round, you can't horde your time; can't distort the market; can't turn your holdings into power. Can't, really, do anything except use that time throughout the working day as you see fit. 

Analogising the company to a market economy may show where the efficiency actually stems from, but it doesn't make the methods involved capitalist - they are anything but.

The logo of Valve software.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Ansbach puts Europe's bravest politician under pressure

Angela Merkel must respond to a series of tragedies and criticisms of her refugee policy. 

Angela Merkel, the Chancellor of Germany, is supposed to be on holiday. Two separate attacks have put an end to that. The first, a mass shooting in Munich, was at first widely believed to be a terrorist attack, but later turned out to be the actions of a loner obsessed with US high school shootings. The second, where a man blew himself up in the town of Ansbach, caused less physical damage - three were seriously injured, but none killed. Nevertheless, this event may prove to affect even more people's lives. Because that man had come to Germany claiming to be a Syrian refugee. 

The attack came hours after a Syrian refugee murdered a pregnant Polish woman, a co-woker in a snack bar, in Reutlingen. All eyes will now be on Merkel who, more than any other European politician, is held responsible for Syrian refugees in Europe.

In 2015, when other European states were erecting barriers to keep out the million migrants and refugees marching north, Merkel kept Germany's borders open. The country has resettled 41,899 Syrians since 2013, according to the UNHCR, of which 20,067 came on humanitarian grounds and 21,832 through private sponsorship. That is twice as much as the UK has pledged to resettle by 2020. The actual number of Syrians in Germany is far higher - 90 per cent of the 102,400 Syrians applying for EU asylum in the first quarter of 2016 were registered there. 

Merkel is the bravest of Europe's politicians. Contrary to some assertions on the right, she did not invent the refugee crisis. Five years of brutal war in Syria did that. Merkel was simply the first of the continent's most prominent leaders to stop ignoring it. If Germany had not absorbed so many refugees, they would still be in central Europe and the Balkans, and we would be seeing even more pictures of starved children in informal camps than we do today. 

Equally, the problems facing Merkel now are not hers alone. These are the problems facing all of Europe's major states, whether or not they recognise them. 

Take the failed Syrian asylum seeker of Ansbach (his application was rejected but he could not be deported back to a warzone). In Germany, his application could at least be considered, and rejected. Europe as a whole has not invested in the processing centres required to determine who is a Syrian civilian, who might be a Syrian combatant and who is simply taking advantage of the black market in Syrian passports to masquerade as a refugee. 

Secondly, there is the subject of trauma. The Munich shooter appears to have had no links to Islamic State or Syria, but his act underlines the fact you do not need a grand political narrative to inflict hurt on others. Syrians who have experienced unspeakable violence either in their homeland or en route to Europe are left psychologically damaged. That is not to suggest they will turn to violence. But it is still safer to offer such people therapy than leave them to drift around Europe, unmonitored and unsupported, as other countries seem willing to do. 

Third, there is the question of lawlessness. Syrians have been blamed for everything from the Cologne attacks in January to creeping Islamist radicalisation. But apart from the fact that these reports can turn out to be overblown (two of the 58 men arrested over Cologne were Syrians), it is unclear what the alternative would be. Policies that force Syrians underground have already greatly empowered Europe's network of human traffickers and thugs.

So far, Merkel seems to be standing her ground. Her home affairs spokesman, Stephan Mayer, told the BBC that Germany had room to improve on its asylum policy, but stressed each attack was different. 

He said: "Horrible things take place in Syria. And it is the biggest humanitarian catastrophe, so it is completely wrong to blame Angela Merkel, or her refugee policies, for these incidents." Many will do, all the same.