Consequences of Competition

Last time I wrote about the myth that evolution is about competition. What might seem to be competition is often subtle forms of mutual benefit. It depends upon how we look at it.  What are the consequences of competition?

Belief that competition is the norm has consequences. Here are some consequences based on a New Statesman article, “Fishing with Dynamite” by Margaret Heffernan, in the 20 -26 June 2014 edition:

  • Dysfunction – the idea that competition diversifies the marketplace is questionable. For example, gas providers copy each other and so reduce diversity in the marketplace. They have to do this because they are competing over an inherently non-diverse product. Another issue is where people hold back information to retain a competitive advantage and so it becomes harder to innovate.
  • Corruption – competition between sales people, can lead to, for example, mis-selling. It becomes harder to retain staff as competition becomes more toxic. People sabotage each other.
  • Waste – is competition between energy suppliers likely to help with reduction in carbon footprint? It seems unlikely.
  • Environmental degradation – maybe competition to reduce carbon would work but if it meant people withheld information, it would be counter-productive.
  • Inequality – competing on price drives down labour costs.
  • Unwinds social fabric – the most effective way to grow a company is by mergers and acquisitions. Companies get bigger and so need employ fewer staff, often relocating businesses. The customer experiences standardised services.

Questioning Competition

I haven’t proved the point here, my aim is to make the point and suggest we should question the mindset that sets competition above all other approaches. Is it true competition is more natural than collaboration?

Both competition and collaboration are mindsets. They are ways of seeing we project onto the world. The world is no more naturally competitive than it is collaborative. The consequences of which model we project are real though.

Last time I used the example of foxes and rabbits. I suggested that you can read it as either a competitive model or a collaborative model. But which is most helpful in understanding what happens in this admittedly simplified ecosystem?

Whilst we may deplore the violence of foxes and note the callous attitude of those who argue rabbits have to die for the good of the system, we also note the consequences when the system breaks down. The point is there are constraints on the foxes. The consequences for the fox of unrestrained violence are devastating.

What evolves is a system that supports both foxes and rabbits. We can look at it and decide this justifies violence because violence is a necessary part of the system. But how do we avoid that excuse being used to legitimate behaviour that is destructive of the system?

Actually, ecosystems constrain violence. When foxes become too powerful they destroy their own food source. The same applies in economic systems. Unconstrained competition is ultimately destructive.

So, what is the alternative?

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About the Author

I've been a community development worker since the early 1980s in Tyneside, Teesside and South Yorkshire. I've also worked nationally for the Methodist Church for eight years supporting community projects through the church's grants programme. These days I am developing an online community development practice combining non-directive consultancy, strategic management, participatory methods and development work online and offline. If you're interested contact me for a free consultation.

Leave a Reply 3 comments

Mark Woodhead - July 15, 2014 Reply

Yes, competition is an interesting phenomenon. A particularly interesting example of the application (maybe) of competition is health services. On the one hand, we have the view that many of the supposed problems of the NHS would be solved by opening up the NHS to competition. On the other hand, consider the case of the supply of medicines to the NHS. The medicines bill is a large chunk of NHS expenditure. This is a problem for the NHS. How to deal with this problem? Competition? Here’s how competition seems to work in relation to pharmaceuticals:-
A medicine /drug is developed. It is tested (if absolutely necessary) to ensure that it does what it is meant to do, and to ensure that it is safe. Let’s keep this testing to a minimum, eh? It is inconvenient. Thalidomide, what’s that? Never heard of it. Most importantly, the drug is patented . This stops anyone else from copying it, for the duration of the patent. A monopoly is created. As a result of this monopoly, the company can charge more or less as much as it likes. At the same time, the company will be seeking to put pressure on GPs to prescribe the drug, and patient groups (some of them funded by the drug companies) will be encouraged by the drug companies to put pressure on the NHS to make the new drug available. So the message seems to be that competition is a good thing for the NHS but a bad thing for pharmaceutical companies. Wonderful thing, competition.

    Chris - July 15, 2014 Reply

    You may find “Fishing with Dynamite” (referenced in my post) interesting as it explores another dimension of competition in the NHS.

    It’s confusing because monopolies are sometimes described as competition. They are examples of survival of the fittest in the inaccurate sense I describe in the first post in the series (referenced in the first line). Clearly the pharmaceutical company that patents a new drug is the fittest in the sense they win out over other companies. But they are not fittest in the sense of fitting into an environment where they play a positive role.

    This is why the model of competition is inadequate. Small businesses co-exist where they collaborate. The business that sets out to crush its competitors does so by extracting finance from the marketplace. Similarly the NHS is being wrecked by these interests. I find the argument that there would be no research if all drugs were supplied at a reasonable rate unconvincing. Why? Because in the news recently is the dawning realisation that bacteria and parasites are developing resistance to antibiotics. There have been no new antibiotics for several years. Clearly competition is not sufficient incentive to develop them.

Partnership and Innovation - July 21, 2014 Reply

[…] what is the alternative to competition?  Look again at natural systems and you will see partnership through innovation, problem-solving […]

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