There is (roughly) only one thing to know about competition.
In competition...the competition sucks for everyone in the competition (even the winners), and rocks for everyone on the receiving end. Competition between computer parts manufacturers is horrid for the manufacturers, and is wonderful for the consumer. Competition between women for men benefits the men (see NYC). Competition between Male Elephant Seals is good for the female seals, and makes Male Elephant seals live short, brutal lives.
Roughly...anyone participating in any competition would be better off with less (or no) competition, while anyone outside the competition is better off with the competition.
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13 comments:
True so long as there are rules to the competition which prevent collateral damage. If there are no such rules, then the competition can suck for everyone.
Leonard,
I was waiting for that objection. Basically, true, except the word rules unreasonably narrows the range of good solutions. How about incentives?
Competition is destructive - this isn't necessarily the same thing as bad, even for the players involved. Destruction is evolutionary ma.
The design principle of elimination can work to the betterment of even those eliminated. Stasis, not destruction, is death, after all, and we're living creatures.
You forgot about Kareoke competitions. They are bad for everyone except the competitors.
This is a mostly semantic quibble. But how about scare-quoted "rules", then. The scare-quotes acknowledge that the rules may not be real, as-per-the-dictionary-definition imposed-from-above rules. Just that there is a social context of some kind that acts like a set of imposed-from-above rules.
I don't really like "incentives" -- there certainly are (some) incentives for a sovereign to be nice. (For example, USG can be expected to act in my interest, because I can vote!) It's only when all the incentives together are strong enough, that they actually do what is desired, and become "rules".
Leonard,
I'll buy "rules", with your semantics. I'm just a very strong believer in common law. Maritime/naval law, or the Amish law that Tyler Cowen is talking about this week.
Pay-to-play law, not top-down rule-making is where the interesting world is.
Competition between Male Elephant Seals is good for the female seals
Tsk. For someone against violence, I'm surprised you cheerlead this. Better if they had a test and physical exam.
Competition between women for men benefits the men (see NYC).
How does this benefit when what results are high achieving women with no kids and thus no survival?
The business competition you tout is a subset of competition in general, which, per Leonard, often has destruction beyond benefits (see the drug trade and species extinction.)
RSF,
1. Elephant seals. Bah.
2. Women in NYC competing for men means that the men being comepted for get laid a lot more often than otherwise. And the women have NO leverage. The folks in the competition lose all their power...and the folks being competed for gain all of it.
2.5 You persist in a crazy non-individualist methodology. For each individual man in female-heavy New York, it's a win.
3. Drug trade is a problem 95% because it's illegal, and 5% because of other factors. Alcohol and Tobacco are generally worse drugs than at least Marijuana and Extasy. The problem isn't the drug, it's the state response to the drug.
4. Species extinction is a questionable problem...which has (AFAICT) been best resolved via property rights.
The issue is that competition is bad for the folks doing the competitng, and has benefits for the folks not doing the competing.
I look out at the world, and I see advantages in cooperation, and I see advantages in competition. It depends on the situation and the context.
In my small town, we had one guy who cleaned carpets, and one guy who replaced windshields. They decided to compete with one another, so we had cheap service of each for a while, but then they went broke and now we have to pay mileage from the next town for a net loss.
For each individual man in female-heavy New York, it's a win.
I understand that. But it is not a win for the larger society to have this competition in the first place. Each generation is akin to a lifeboat between islands. Not cool to have competition for food on the lifeboat. Better to cooperate and get to the island.
Drug trade is a problem 95% because it's illegal, and 5% because of other factors.
I'm not so sure. Such as cigarettes and alcohol are pretty damaging under legal aegis.
RSF,
1. Cooperation is fabulous. In any circumstance you can still get what you want, cooperate. It's FAR better than competition for you.
2. Odds are good that the 2 guys started competing with one another because they each weren't making enough to be satisfied/full of work and they needed more. Sounds like not enough work to pay for 2 guys in the combined business. Competition is a relatively minor feature...and eventually you should get a single replacement who can do both.
3. I think your generation as lifeboat between islands example captures some of our differences.
4. I neither drink, nor smoke. My drugs are caffeine and sugar. Would you accept 75% as a lower bound for the problems around drugs CAUSED by the illegality? I don't need to have 95%...mostly I was saying "most".
I'm one who thinks legalizing drugs won't change much. The dysfunctional will be dysfunctional whether drugs are legal or not -- see needle parks in Europe.
Also, regarding #2, pretty much as you say. Kind of an interesting dynamic here, a small town in striking distance of a larger town, such jobs range from 1/2 -- 1 1/2 of a full time venture, so we see a start up do well, someone else gets in, both go down, someone else starts up a stronger venture, has to struggle through competitors who come and go.
You say "Competition is a relatively minor feature". It seems to be needed as something "hanging over your head" to keep things non-monopolistic.
In the high tech field, I'd say costs and performance change from new discoveries, not just from competition. Just because one throws in a bunch of competition does not mean price to the consumer goes down.
RSF,
1. There's the question of what changes if drugs are legal, and what doesn't. People still use drugs...absolutely. Normal city-zens accosted by folks who are high, instead of just folks who are drunk...check. Organized violence at the level it's able to bring down states in 2nd world countries? Not so much.
2. There's 2 levels of analysis here. As a "new growth economics" kind of guy, I have to agree. ALL growth, cost-savings, etc. come from innovation (that makes it to the market).
However, 2nd level of innovation is: what features of the world make it so innovations make it to the market. Competition is obviously one such good...Brin & Page tried to sell the google algorithm to Yahoo before founding google, but it was a disruptive technology, which screwed with Yahoo's existing business model, so Yahoo didn't buy...and would never have researched internally. Without (disruptive) competition, you don't get the new discoveries.
AFAICT, barriers to entry (permits), Tariffs, Licensing (esp. Doctors, Teachers), and Patents all fall into the "effective at decreasing competition" category, and therefore stifle innovation, and therefore decrease consumer benefit.
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