>when that model seems to imply that employees should always be "shopping around," by definition.

I do not believe it implies that. It only implies that if you imagine the people can never be satisfied and should continuously seek higher pay/more power/etc... On the hedonic treadmill so to speak. I think people can be quite happy even if they aren't getting absolute top <insert motivating concept here>. For example, I am about 99% sure I could leave my present employer and find another job which would pay me more. Does that mean I should leave? It depends. Specifically on what I value. If my only concern (or topmost concern) is absolute top dollar then yes, I should leave. If my company wants to prevent that they can up my pay. If they know there is no way I can leave (i.e. they have agreed with the majority of large competitors to not hire me) then they have leverage that is simply unconscionable to me. Conversely if they do not believe I am worth my monetary demands then severing the relationship is the logical thing to do.

>Specific persons in your employ aren't fungible. They've accumulated training and product knowledge that you might direly need in order to meet a deadline or bring a product to market before a competitor, to cite the most obvious objection.

I never said they were fungible, I don't believe they are. This is part of employee power. If they were simply cogs in the machinery then employers would have all the power. Since they are not, employers must actually engage in a negotiation/agreement process with their employees and actually gasp try to ensure their continued happiness (note: this doesn't mean showering them with constant praise and telling them they are delicate little snowflakes and appeasing to their every demand no matter how ridiculous). They have to ensure that they are providing compelling value in a myriad of dimensions to retain said employees. They have to understand what motivates their employees on an individual level and strive to maximize the value they provide to said employee such that they exert a gravitational attraction making the employee not want to leave.

>In other words, the cost/benefit ratio of retaining a given employee is dominated by factors external to the labor market.

How so? This information the employee has only has value in as much as someone is willing to pay for it. If I have learned the esoterica of your operations and you decide that knowledge isn't worth whatever I am asking then that is a decision you freely made, you can't then cry that I am taking that knowledge elsewhere. If another employer decides that knowledge is worth what I ask then that is a decision that have made, both are made 'in the context of the labor market' and my value as an employee should be dictated by what said market will pay me vs. what I want, i.e. as a negotiation. If companies agree to simply not allow people to transfer there is no negotiation. Further the idea of stunting the intermingling of knowledge/ideas across company boundaries impedes the flow of knowledge/ideas and has an overall detrimental outcome for society as a whole. I am sure you have encountered people that have spent too long in a single place and are set in ways that make sense only in that one place. That is not healthy or good, we should not strive to institutionalize that.

>I'd also be interested to hear, in detail, how your particular arrangement of challenging work, bureaucracy, office politics, fair pay, and dignity and respect programs both reaches a maximum of employee satisfaction and functions in even one competitive company.

I think the idea that one can maximize along all these dimensions is a fallacy. If there was such a place that maximized all of this then everyone would want to work there and competitors would simply have to choose from the folks 'not good enough' to work at said fabled place. I don't believe human happiness is something that lends itself to some kind of Tayloristic maximization like the throughput of automated machinery. That said there are clearly places that are more desirable/better to work at than others, in any industry. The fact that I would rather work at say Google than Amazon says something about the environments and how well they have maximized what I view as important. The fact that someone else may, rationally, have the exact opposite view simply proves the startling fact that human beings are unique and can't be treated as a mass aggregate of indistinguishable things.

>And, which of bureaucracy or politics is going to be more generally erosive of "basic dignity and respect," if you have to choose between them?

This can't be stated, in general, which is the problem with your whole argument as I see it. You seem to be under the impression that there is a maximization function that applies to all people across all situations and industries. I don't believe that to be true. The balance between bureaucracy and politics and how to best achieve said balance to maximize happiness of your current employees and attract the kind of candidates you want is precisely what management/HR roles are about. There is no silver bullet here, if you are looking for one you will generally be disappointed.

>Employers should just do only amazing things to me, or I'm within my rights to throw a fit and leave to go work for an obviously smarter employer

That is clearly a strawman and doesn't really relate in any way to my argument that people should in fact have the right to shop their talents around if they so desire, and that market should not be unduly stifled by back-room agreements between employers to not hire 'certain types'. Imagine the outrage (rightly so) if the agreement was that they won't higher minorities? The hiring decisions should be made on the grounds of what is best for the company making the offer, and that should be based on the skill-sets they need, the benefits they have to offer and the talent they can attract. As a shareholder it worries me that companies are possibly passing up on good employees that would bring value simply because they had some agreement with a competitor to 'not hire their employees'. I really see little difference between this and price collusion, which I think is clearly detrimental to a well functioning economy.

>but that doesn't mean you've actually got a workable hypothesis.

A number of companies (Google, Facebook, etc..) actually bill themselves as empowering their employees, lessening bureaucracy and hassle, paying competitive wages, giving you the opportunity to work on challenging problems, etc.. So I think there are existence proofs that these things are generally desirable and the only argument is 'how does one balance all of these things', and as I said I don't think there is a mathematical formula for doing that, which is unfortunate but also exciting as it is the same as saying there is not exactly one optimal solution for most interesting problems. There are generally competing ways with different tradeoffs that one must understand when trying to choose the one that is best in their particular situation. I don't believe the solution to the problem is to simply try to make it go away by 'trapping' your employees by agreeing with competitors that they shouldn't hire your employees and you will do the same to them. Calling this a gentleman's agreement is laughable.

[edit] Corrected some typos.