Business · Competition · Control · Economics · Government · Influence · Persuasion · The Game · The Players

The Competition Paradox

Competition is good! Is this necessarily so in all cases? Certainly, no competition is a bad thing – state control is bad, monopolies are inefficient, and reward the few at the expense of the many.

So if no competition is bad, and competition is good, then it only stands to reason that more competition can only be better. It provides consumers with more choice, and forces the producers to up their game. This then is the classic non-sequitor, the Noble Lie supporting our cult – the Cult of Capitalism!

The greater the competition, the greater the pressure! In the beginning, producers work better, and smarter to beat the competition. The problem starts when they run out of ways to improve their competitiveness, but the pressure within the system keeps growing. What happens next?

Sooner or later, out of sheer necessity some of the competitors start bending, or even breaking the rules. If these few are successful in avoiding detection, the others will be compelled to follow suit if they wish to avoid falling behind.Ultimately, the situation arises where the player in the game is left with a simple choice – break the rules and risk the penalty, or stick to the straight and narrow, and go under.

Now let’s turn to the BP oil spill in the Gulf. This is very likely what lay behind the scenario that led to the disaster. The drilling company was ordered to increase capacity. Wishing to remain in business, they complied. The person at British Petroleum demanding the increase was no doubt under similar pressure, and this would then carry all the way up the line to the top. In the pressure driven environment the ultimatum presented to all those in positions of authority is: do what it takes, or we will find someone else who will.

This paying forward of pressure cannot go on interminably. Sooner or later it comes up against an immovable object – in this case Mother Nature herself. Singling out one of the links in the chain, and attempting to attribute blame to it is a complete waste of time. Once the decision to deep sea drill was made, an irreversible chain of events was set in motion that could have but one final outcome- disaster. We cannot know which rig will be the one to fail, or when it will fail, but that some rig somewhere will fail and an environmental catastrophe is almost guaranteed.

We can improve technology, tighten regulations, but so long as the pressure keeps building and building we can only expect more of the same. What was deemed as an acceptable risk turned out to be unacceptable.  How many other similar decisions have been made, where risks are high, corruption is systemic, and the kettle is waiting to explode?

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