There are some fantastic counter-arguments in there. For the record I think both sides have valid points: unions do make industries "sclerotic," but they also exist to prevent a deflationary race to the bottom in wages. I'd reference Peter Thiel's comments on competition from Zero to One-- they apply just as well to labor as they do to companies.

"All workers can't be paid union wages" is perhaps true, but flattening the labor market completely would result in a squeezing of disposable income that would harm the economy overall not to mention the well being of its participants. As Thiel correctly argues: surpluses are required for pretty much anything outside the status quo to happen. If there are no corporate surpluses there can be no R&D or expansion. If there are no labor surpluses, there can be no adoption of anything new or interesting or novel. How many impoverished check-to-check workers will be purchasing an Oculus Rift or a Tesla?

A lot of the criticism of unions is also hypocritical. For example, corporate executives as a class are de-facto unionized. Why is it that companies pay absurd salaries for directors? Being a CEO is a hard job but it's not that hard. The reason companies hire superstar directors and pay them superstar wages isn't because these people are actually hundreds or thousands of times more effective. It's because these people are connected. They're plugged into the "old boy network" a.k.a. in the union and that confers a privileged position in relation to things like raising money, making big deals, protecting companies from government scrutiny (the CEOs union has a revolving door with government), etc. A great recent example would be Condi Rice being recruited for the Dropbox board. What expertise does she have in IT enterprise marketing, distributed systems, engineering team building, ...? None. But she's very connected in the "union."

I think it's reasonable to hypothesize that any time you see what appear to be above-market wages being paid for any form of labor, something union-like is going on even if it's not officially organized as such.

I also love the comparison of YC to a union. It's very much like one. An open question for pg:

Would he be willing to forego YC's union-like attributes? This would entail ceasing all collective bargaining with investors on the part of YC companies and refusing to permit companies to openly leverage the YC brand to increase their clout in the market. YC could still provide co-working space and mentorship but could not use any collective marketing, branding, or bargaining strategies to assist its companies in fund raising or growth.

Wouldn't it be a more efficient market if startups competed only on merit and negotiated in a flat market domain with investors?