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Compete to cooperate

Professor Sinclair Davidson at Catallaxy Files highlights excellent points made today in the WSJ:

Consider the most basic economic unit, the transaction. A transaction is cooperative because both parties gain from a voluntary exchange. There is competition in markets, but it’s actually competition for the right to cooperate. Firms must compete for the privilege of selling to consumers—for the right to cooperate with consumers. Workers compete for the right to cooperate with employers. Competition matters because it ensures that the most efficient players will gain the right to cooperate on the best terms available. But competition plays a supporting role, while cooperation makes markets thrive.

Here’s an example. Wal-Mart comes to town and several small businesses disappear. How do we represent that event? If we think in competitive terms, we say, “Wal-Mart has outcompeted small firms and driven them out of business.” If we take a cooperative view of the same event, we say, “Wal-Mart has done a better job of cooperating with customers by selling them things on better terms, and the small firms were not able to cooperate as well.” Same facts, but a very different emotional reaction.

Similarly, we might say that a poor person has been outcompeted in the market. Or we might say that a poor person cannot successfully cooperate with others because he lacks valuable skills and has little to sell.

I have tried to make the same point many times when talking to progressives, that the market is all about cooperation, but usually with little luck.

It is true, there are selfish and self centred actions all around us, but they only stand out because cooperation is the sea in which we swim, so we don’t notice it. It is the acts of selfishness which stand out, and get remarked on.

An example which stands out in my mind. Once, in Italy, a fellow I was once talking to on this very topic was adamant that people were innately selfish. He sought to defeat my contention to the contrary by referring to a bus tour he had been on. He described how the German tourists had piled out of the bus heading to a table of food. Some were almost running, to get there first, and all were pushing and shoving to make sure they got their choice before the other gannets were able to pick the best bits. No violence, but loads of selfish lack of consideration.

With this in his mind, he couldn’t even see the point I was making when I asked how both the food and the tourists got there in the first place. Who prepared the food, who laid the table, who drove the bus, who organised the tour? Hell, who made the clothes they were wearing? Who made the pencils used to mark their names on the list? Apparently, all of these things just happened, the whim of God maybe. The only thing he saw was the selfish actions of a few individuals towards the end, not the chain of cooperation leading up to the event in the first place.

He could not understand that he, a brit, and I, an Australian, were having this conversation over coffee in Pisa in itself called his contentions into question.

H/T Catallaxy Files


  1. Single Acts of Tyranny says:

    Yep, tell ‘em the free market is just trade without violence or the threat thereof. It blows their minds.

    Tell ‘em “properly regulated” means cajoled, coerced, forced, banned, taxed, denied entry, denied access etc usually at someone’s behest and to someone’s benefit. Probably not theirs if they aren’t paying large sums to the criminal law makers.

    Ask ‘em if they prefer freedom or force. Ask them if they prefer making decisions for themselves or would they prefer someone else to make the decisions for them.

  2. Good post – and good comment.

  3. dcardno says:

    But SAoT, as easily observed, your garden-variety leftist doesn’t expect “someone else to be making decisions for them” – they expect to be the one making (and imposing) decisions on others, which makes all the difference. The closest they come to considering your question is “what if someone who agrees with me in every detail were to make my decisions for me?” Not surprisingly, they see little problem with that.

  4. Lynne says:

    Progressives get co-operation. If you co-operate with them without question they won’t label you as a dirty, stinking capitalist or worse.

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