Anti-competitive practices

How many times do I hear it said that competition has just got to be a good thing? We need to be more competitive and raise standards they say. Competition must be introduced in the health service and education. Doing things just because they need doing is anti-competitive. How long before doing your own housework or giving to Oxfam is outlawed as anti-competitive – denying other people the opportunity to make money cleaning your house and feeding the poor? In business, competition is how you ensure that you get the best.


I can’t think of any other area of life where this would be considered a sensible way to get the best out of people, except maybe sports. In an art class or at a party or even in an office you wouldn’t expect the best results from the most aggressive, controlling, ruthless person there – quite the opposite. (If materials were scarce they might be the only one to produce anything at all, but materials are not scarce – no matter what they tell you. It’s just that some people – the most aggressive, controlling, ruthless ones, hog it all and force the rest of us to squabble over what’s left.)


It’s always assumed that the winners must, ipso facto, be the best. It’s an equation that seldom gets questioned and one of the basic tenets of Free Market Fundamentalism. But it can’t be true. People have different talents. There are all sorts of expertise out there – in my field there are plant propagators, plant breeders, garden designers, gardeners, pest and disease experts, various technologists, writers and so on and so forth. Each has various areas of specialist knowledge – some scientific, some artistic, some commercial, some practical. There are also character traits and outlooks appropriate to their roles – patience, attention to detail, creativity, physical fitness, love of nature and so on, and yet to compete successfully in the market the gardener must be preoccupied chiefly with management, money and publicity. Materials will need to be as cheap as possible. Labour must be as unskilled and low paid as possible. The ‘Products’ ideally should be as gaudy and short-lived as possible so that the customer comes back for more.
In my experience the modern commercial horticultural business is often run by rich retired business people who think they know about plants. (Sometimes they employ actual gardeners but play down their role and pay them very little.) Highly competitive people typically believe they are more knowledgeable than anyone else on their staff but have no real idea of what it means to be an expert in anything (except making money). It's almost impossible to convince them otherwise. Their self-belief is unassailable.
The characteristics that go to make up an expert nurseryman are not the same as those that go to make up a commercially successful nursery owner. In my experience there is very little overlap. People who really care about plants are generally not ruthless careerists. And yet it will be the latter that ends up running the garden centre and putting the real gardeners out of business. In the free market you can be the very best gardener in the world with a generous mix of the qualities mentioned above, but unless you are a good competitor you will get nowhere. On the other hand you can be a good competitor and a mediocre gardener and do very well indeed. (The same applies in almost any area of commerce. I just happen to know a bit about horticulture.)
Being the winner, in practice, is not at all to do with being the best man, but with making the other man the loser.
How then does competition lead to higher standards?


There was an episode of Grey’s Anatomy some while back where Christina Yang (who is proud to tell everyone that she is highly competitive) says that limiting the length of doctors’ shifts is wrong because it favours the weak. It doesn’t. It allows doctors who are in every other way excellent (or possibly better) to work. The requirement to be able to work twenty hours straight is an artificial criterion caused by bad management (like the artificial scarcity mentioned above) that trumps all other qualities. It doesn't matter how good you are - if you can't stay awake you are out. Who knows, perhaps Christina Yang is not the best doctor. Perhaps she is only the best of those that can function without sleep.


Sport is held up as the paradigm of healthy competition. Sport is all about winning after all. Here it is truer than anywhere else that the one who wins is the best. The winner of the gold medal for the one hundred metres sprint at the Olympics really is the best sprinter in the world, isn’t he? Well no. For a start he’s only the best of those who could afford to take the time off to go through the training regime – not a trivial consideration in very poor countries. So in fact he’s only the fastest of the rich kids, which doesn’t sound quite so impressive.
But even beyond that, sheer physical prowess is not the only thing. There’s a lot of psychology involved. A weaker athlete might win by intimidation or bluffing. This may be more of an issue in other sports and games. A weaker chess player can make a stronger one concede defeat by manipulation. Ok, it’s just a game. Sports are entered into voluntarily, unlike the market, which is most emphatically not ‘just a game’. Everyone must take part or starve – a fact many businessmen seem to forget.
In business almost all the success is down to bluffing and manipulation, marketing, pricing and power, and only tangentially about the sheer quality of the goods and services - assuming the customer is well-informed enough to know the difference (more about that another time.)
Competition therefore favours entirely spurious qualities and ignores the real – it’s the Law of Unintended Consequences again.


A highly developed competitive spirit is supposed to be a sign of strength. Women are attracted to it in men apparently. I just wonder though why those men seem to have so much to prove. You see them sometimes when you’re out driving. You’re doing the speed limit (or if you’re honest, somewhat more) and yet this guy’s still got his nose up your arse, trying to get you to go faster. Or you can watch him tailgating the guy in front – his brake lights flashing on and off. What’s he trying to prove? Does he think he looks cool? Does he think we’re all going ‘Wow! Now there’s a Real Man.’ Maybe he’s just mad. Maybe (giving him the benefit of the doubt) it’s an emergency. Then you see him overtake on a bend and you know, if it wasn’t an emergency before, it very soon will be. To me a highly developed competitive spirit is a sign of inadequacy. (There are also those city gents who drive their Jags everywhere at forty mph – presumably to let the rest of us know they’ve arrived. Either way they seem overly preoccupied with impressing the rest of us. Or maybe they're just very old.)
The free market is like a road system without speed limits or traffic lights or roundabouts.
Most people consider themselves to be above average drivers.


Of course I'm not proclaiming that henceforth there must be no competition. I understand that quite a few people rather enjoy the odd kickabout of a weekend and I myself am quite partial to the occasional game of scrabble. Nor am I saying that competition cannot improve services and keep prices down. Some people seem to respond to that sort of motivation. But it can't be trusted. It has a logic all it's own that has nothing to do with what people actually need or want. Like natural selection, to which it is obviously related, it has no forethought and no conscience. It just does whatever works and doesn't care what it extinguishes along the way (including itself). And yet we have elevated competition to the level of a universal panacea for human shortcomings. 'Make them fight' we say. 'Let's see who's the better man.' But instead we only find out who's the most devious, the most amoral, the most venal. And once they have taken what they can, what can the rest of us do but squabble over what's left?
I like the analogy of the football crowd. Once one person stands up everyone behind him has to stand up in order to see. In the end no one can see much more than they could before but everyone's more uncomfortable.


So if you’re planning a garden you don’t just accept that the whole place is going to be taken over by brambles and bindweed. No, if you’re a keen gardener, chances are that a lot of the plants you want will require special treatment and protection. Your veg will need extra nutrients and protection from pests and diseases. Those prize alpines will fail if they get shaded out or overcrowded. No gardener thinks that the best thing is simply to let the biggest most aggressive weeds take over on the grounds that it ‘maximises growth’. The word ‘weedy’ is usually applied to weak and needy people but in the garden it’s the invasive and the opportunistic we need to weed out...

With fiduciary duty's to be done, to be done...

I'm not against capitalism. It sticks in my craw to say so, but I'm not. I run a small business myself after all.
If there is anything you love doing and people are prepared to pay you for it, what could be better than earning a living at it?
But I'm suspicious of big business for the same reasons I'm suspicious of big government - because sooner or later it starts to run on it's own ulterior motives, oblivious of the rest of us, and in business, that motive is purely and simply to make money. Nothing else matters. Everything else is incidental. In fact, as I understand it, companies floated on the stock exchange are legally required to make as much money as is legally possible*. Anything else is illegal. That this should be the case is I think the gist of what Milton Friedman had to say on the subject.
This motive has become pretty universally accepted and taken for granted of late. As business people will gladly tell you whenever it is suggested they do something to help the environment or working mothers or whatever - "We're in business to make money. This isn't a charity."

For those who believe in the power of the Free Market this is not a problem. What is good for business must be good for the consumer. A well run business responds to demand, providing choice and opportunity. Furthermore, growth in the private sector creates wealth and that's got to be a good thing hasn't it.
But the experiences of the last few years demonstrate instead the power of the Law of Unintended Consquences. Briefly, Economic Reality developed a logic all its own that became so divorced from Actual Reality that a small number of individuals in the financial sector in one country could completely destabilise the economy of the rest of the world. The analysis of the current crisis has been rehearsed ad nauseum and needs no addendum from me except to say that this problem is not the result of some abstruse detail at the periphery of the capitalist edifice. It is a direct and inevitable result of basic assumptions about how the economy should be run, which is to say that making money is the only thing that counts.

To suggest otherwise might be considered heretical these days but I can't help thinking that there are other things business should be about. A couple of things spring to mind:

One is that business should be primarily about providing us with reliable and affordable goods and services. This seems self evident until you listen to business people talking about 'product' as if it signifies nothing more than profit (or loss) to them. The feeling seems to be that none of this 'product' really matters in itself. Each and every product is interchangeable with every other product, and ultimately with money. But a quick look at Actual Reality shows that this isn't the case. In the absence of nationalised industry or backwoodsman style self-sufficiency, we are totally dependent on businesses to provide almost everything we have and use in our lives. This is not just trinkets and treats - optional extras and investments that may or may not come good at some time in the future - this is food and clothing, health and education, home and heating, and yes, the pleasures that make life worth living. Shopping is no mere leisure activity. It is where we get the things we need to in order live. We 'consumers' lose sight of this, dazzled by novelties and fashion accessories, but business provides the things that make life possible. I emphasise - life would be impossible without it. It's not like we have a choice to go elsewhere. And it's not a game. Business has the immense responsibility of making life possible, of providing the things we need to stay alive. They should be taking that extremely seriously, rather than just worrying over their next bonus.
"But surely that is what businesses do" I hear you cry. If they didn't, all those products would not be exchangeable for all that money. The business may not care precisely what products it produces as long as it turns a profit but the customer will, and if the product is wrong it will not sell. Surely?
Not necessarily. If the primary goal is to maximise returns rather than to produce the best possible goods and services, all sorts of unintended consequences follow. It pays for instance to use the cheapest materials and labour you can get away with. You get a better return if your goods don't last very long, can't be repaired and thus have to be replaced often. And you can sell more of these shoddy goods if reliable advice is hard to come by.

A second and equally important thing is that business provides jobs. Again, this seems obvious until you realise that most of the people who run businesses regard work as something of a game or a personal statement, to be traded or invested in for the future and workers as another commodity, to be bought and sold. For most of us though, work is quite simply the only way we have to be able to afford those things we need. Having a job is a matter of life and death. But that's not all. Because most of us spend up to a third of our lives either at or preparing to get to work, work that is not as intrinsically meaningful and satisfying as possible drains life of much of it's meaning.

In short, business's (and therefore capitalism's) first priorities should be to provide the best possible goods and services at an affordable price and the best possible work for a fair wage. Only once those basic requirements are met should 'wealth creation' for its' own sake be an option. Only then can the executive justifiably look to his bonus.

As it stands though, we have the reverse. Things that used to last a lifetime last on average only slightly longer than the length of the warranty. 'Retail outlets' are staffed by people taken on mainly for their ability to sell stuff rather than their expertise and experience. Production is mechanised and manned by unskilled and near destitute workers in 'developing' nations. Legal and technical documentation is unreadable and interminable. (Have you ever wondered why small print is small?) Legal costs discourage litigation.
Many might regard this last paragraph as unnecessarily paranoid or cynical but the bigger businesses leave nothing to chance and you can be sure they'll have done the maths.

To see the alternative all you need do is look at small artisanal businesses. Unbeholding to shareholders, these can choose the best affordable materials and make the best possible job of whatever it is they do, simply because they consider the thing worth doing. They can also take the time to talk directly to their customers to give expert advice and support. Obviously such a business will never make the kind of profits the bigger business does but as long as it makes it's staff a fair living wage and covers it's costs it's perfectly sustainable. Only in competition with big business does such an operation come to look unworkable. Then the smaller business is generally either bought out or undercut into oblivion, or else it's products become luxury goods, available only to the wealthy.

Thus, contrary to popular belief, the Free Market tends inexorably and inevitably toward lower quality and less choice as companies become fewer in number and larger in size.
To the extent that smaller businesses provide better than necessary goods and services, they do so in spite of capitalism, not because of it. Gradually our globalised capitalist civilisation will be served by fewer and fewer, larger and larger corporations and we will have to put up with whatever menial jobs and shoddy (but no doubt fashionable) products they care to offer us, and we will not have the option to shop elsewhere.
This is not some dystopian fantasy. The imperative to maximise returns to shareholders* above all else makes this inevitable.
The difference between big business and big government though is that we get the chance to vote the latter out.
What do we do when we don't like the former?
And how long before business is so big that no government can afford to challenge it?

*unless the shareholders opt for some sort of ethical investment, and how often does that happen?