Francios Tremblay’s Feb. 6 line that “Our society is built on the principle of generalized competition” is sort of the inspiration for the comments below, but I do not mean for this to be a rebuttal of Tremblay’s entire post, if only because he nevertheless makes many valid points about the present nature of competition under statism.
Insofar as we live in a statist society, where some gain the reigns of power for the explicit purpose of lording over others and depriving them of their wealth, Tremblay is certainly right. I would go so as to agree that (state) capitalism does suffer from the anti-social consequences he cited, such as encouraging conformity, causing artificial scarcity, and raising dysfunctional children who perpetuate the existing failed system.
Statism is the negation of society.
Society, naturally though, is chiefly an outcome of cooperation. Society is spontaneously formed, not out a sense of brotherhood, but for the purpose of attaining higher levels of productivity that otherwise would not be possible by isolated individuals. The friendship and benevolence experienced within society, then, is the fruit of that materialistic benefit, not its antecedent. In the absence of the increased productive power of a division of labor, there would be no place for cooperation. Survival would mercilessly consist of all-out competition.
For a logical proof of this, we can recognize that even the most asocial individuals would not want their actions to become the norm, for that would leave them with fewer riches to plunder. Even in warfare, the bloodiest form of competition, people find it in their interests to cooperate somewhat with the enemy. It even became recognized that enslavement was a superior form of victory than the outright killing of hostiles. Over time, more people have come to accept that peace is preferably to war.
Foremost, Ludwig von Mises said, “Catallactic competition, one of the characteristic features of the market economy, is a social phenomenon.” The fact that people generally strive for the same ends transforms what otherwise would be a biological conflict into a fortunate harmony of what Mises called “rightly understood interests.”
The fact that my fellow man wants to acquire shoes as I do, does not make it harder for me to get shoes, but easier. What enhances the price of shoes is the fact that nature does not provide a more ample supply of leather and other raw materials required, and that one must submit to the disutility of labor in order to transform these raw materials into shoes. The catallactic competition of those who, like me, are eager to have shoes makes shoes cheaper, not more expensive.
Similarly to the variations of the tit-for-tat cooperative game strategy, the cooperative framework of catallactic (or market) competition insures that all players benefit, unlike games of winner takes all. While there are certainly instances in which someone forgoes certain advantages of living as an isolated individual, those are passing and insignificant compared to the overall benefit of social cooperation. The fault with thinking of market competition in the same manner as conventional zero-sum competition like sporting events is that it gives the impression there can only be one winner with each interaction. When in life, our interactions are cumulative; they carry forward from one experience to the next. As variations of the tit-for-tat strategies have demonstrated, it is not even necessary to be the most successful partner in each interaction. To be successful, what matters is the cumulative results of one’s efforts.
Tremblay did offer a definition for competition, calling it “an activity which is done for the sake of some external reward.” By this thinking, nearly all human interaction, including cooperation, would be a form of competition. In contrast, I think a better explanation of competition is a condition in which people strive for a goal that cannot be shared.
In that sense, market competition provides for distinct indivisible goods to be divided among people. However, in doing, all parties share in the wider benefit of cooperation that permitted competition to take place. Cooperation and market competition are not antithetical to one another, but part and parcel. Only from pre-existing cooperation can market competition take hold. From an economic perspective, the function of competition is to identify who is best suited, given a set of economic particulars, to provide for the consumer. If anything, market competition could aptly be described as the process of discovering mutually beneficial prices, which takes place with a pre-existing commitment to cooperation.
Later in his post, Tremblay noted that “A common excuse for competition is that resources are scarce and that competition tells us who ‘deserves’ more resources than others.” As I stated above, it is because resources are scarce that cooperation (a division of labor) is needed to organize production. Economization (pricing) is necessary to calculate the realized and opportunity costs of production. The function of market competition is to reveal mutually beneficial prices.
That is not to say that all forms of interaction to be monetized either. I am eager to participate in mutual aid programs or to provide a helping hand to those in need. In order to do so, though, there has to be some mechanism to know how my resources can be used to provide the greatest benefit. The pricing system is able to in a decentralized, non-hierarchical way provide that information for no overt cost to me.
Even if we lived in a society of abundance, economization (pricing) would still be present, because there is one thing that could never be made more abundant, time. Living in the Garden of Eden, we still would be subjected to the dilemma of “sooner or later.” Also, nonscarce goods (like ideas) could be the subject to pricing if their means of distribution (a book) were limited.
As far as “who ‘deserves’ more resources,” economics cannot tell us who was actually a worthy recipient of another’s resource in any normative sense. A study of economics can reveal if an individual’s decisions were conducive to the ends pursued, but not whether the ends deserved pursuing.
Tremblay continued, “There isn’t enough for everyone because any monetary system is a rationing system, and if the rationing system bars millions of people from getting what they need, then they won’t get what they need.”
I agree with his criticism as it relates to the existing economic conditions. A consensual monetary system (if one existed), which would have the intention of facilitating trade, has nothing to do with restricting access to products and everything to do with securing the most productive use for those resource, according to consumer demand. The primary quest in economics is not to find out how to disperse already produced goods; it has to do with answering how those goods should be produced in the first place.