Monday, 12 March 2012
Risk, or Why competition is bad for us
And this got me asking myself "is Risk unrealistic in giving such an unfair advantage to the person who is already winning?" and when I thought about it, the answer is no. It happens all around us. Wherever there is competition - that is to say, a truly competitive environment - anyone who is already ahead has advantage over people who are lagging behind. A trailing runner always has to run not just as fast as but faster than their competition even just to tie with them.
So it is with races, so it is with Risk, and so it is with business. The latter is the one that most concerns me, because favouring business that is already ahead favours the large, long-established businesses of yesterday, rather than new, socially and environmentally responsible businesses of today. To be financially viable and provide a competitive return to its investors, a new business would have to be a lot more economically efficient than its competitors.
Since the existing company already (probably) has the advantage of the economy of scale and materials, the new company will probably need to make itself efficient through labour efficiency - i.e. fewer or lower-paid workers for the same economic output. If they're a social enterprise, perhaps they might even use volunteer labour where the large business has to pay its staff, in order to be able to compete. My point is that by being new, and being required to be that much more efficient than its competitors to be able to compete in the marketplace, jobs will be lost, margins will be squeezed and the company will have to choose between its ethics or its bottom-line. If it is successful, then its competitors will have to become more competitive too, and job losses will take place there instead (or as well!).
You may be asking "what's wrong with that? Efficiency is good, isn't it?". Well, material efficiency is good (although there is a problem associated with material efficiency which I'll get onto in a minute). However, labour efficiency is not good, because it is essentially what puts people out of work. OK, it's good for the particular company that is racing ahead and making profits, and that company's investors, but on average over society as a whole, labour efficiency means putting people out of work, paying them benefits out of taxes, which in turn puts more pressure on small businesses to maximise their labour efficiency because the small businesses are inevitably less able to avoid taxes through the use of tax havens and other tax-dodging schemes.
As I mentioned above, material efficiency is a good thing. Doing the same thing with fewer physical resources is always good news for the environment: less energy wasted in the extraction of materials, less energy wasted in processing and less energy wasted in transportation. However, going back to the competition model, if a socially responsible company uses less material to make a product, the competitive industrialist sees this as an opportunity to take up the resources saved and put them to another profit-making venture. Thus, material efficiency only serves to free up physical resources for those who are competitive, rather than serve any societal or environmental good.
This dynamic mechanism both relies on and feeds consumerism to take up the slack caused by more efficient production, and is the reason why competitive businesses feel such need to advertise to ensure we keep on spending and consuming, to make up for any decreases in economic throughput caused by material efficiency.
When does this all stop?
Imagine if, like in Risk, the entire point of the game of political life was to conquer the world. A scary thought, I know, but I think the result would turn out much like is does in Risk. There would be one nation, that by directing all its resources to the conquering of other nations would end up taking over the world. Thankfully, this hasn't happened, with the recognition at the end of the cold war that nations do much better for both themselves and others if they cooperate with other nations rather than consider them their enemies.
I'm not saying that there is no place for competitive systems in society - there are times when a free market is the only way of reaching an equilibrium of resource distribution within a particular closed system, but at the same time, shouldn't society recognise the flaw in competitive systems as a means of distributing resources fairly, and instead look at ways in which benefit is felt by all, whether or not they have a competitive advantage?
Image: Risk, the boardgame, photo by the author