Games and Organizations

Yesterday, as a comment on the Naked Capitalism blog, I wrote:

“Competition is cooperation because all those participating in a competition are behaving in accordance with agreed upon rules. Conflict is fighting — trying to harm or kill someone. Some people don’t seem to see the difference. So we need agreed upon rules for corporations and individuals in their economic behavior if it is to be competition rather than conflict. Capitalism or whatever system we have needs more competition, less conflict, more rules. Every system, every game needs rules or it turns into destructive conflict. Most people don’t understand this. Yes, let’s get rid of all regulations. Let’s have a game with no rules!”

I want to elaborate on this a bit.

Is the world economy a game? Or how much is it like a game? How is it different?

I am thinking here of games as sports games like baseball, football, soccer, basketball. All these games have definite rules of behavior which all the players must know and understand and agree to follow. These games have officials or judges who observe the behavior of the players and they assess penalties for violations of the rules. These are team sports. Each team consists of several individual players who mostly cooperate with the other members of their team in playing the game. Each team gets points for various accomplishments by its members and each team tries to prevent the scoring of points by the other team. The team with the most points at the end of the game wins. Generally a team has a coach who’s job is to suggest strategy and tactics.

Over short periods of time the rules of each of these games are fixed. But over longer periods, the rules evolve. That is, all those participating in the games agree to make small changes to the rules. Then we have a slightly different game.

 All these games have spectators. They really should be considered as part of the game if we look at the game as a whole as a system. What is the purpose of a game? As a system in our culture, what does a game do? It encourages and develops human excellence in the players. The spectators come to see and encourage and celebrate the human excellence demonstrated by the players. If the game didn’t have clear rules that the players and spectators can easily understand, or, if there were too many violations of the rules, the players and spectators will be turned off and will no longer be interested in such a game.

In the world economic and political system there are many more players and teams. And the relationships between individual people and various teams are much more complicated than the simple rules of the above team sports would allow. But we can still look at corporations, governments, and other organizations as teams. As with sports teams, individuals within any one of these organizations are supposed to cooperate with one another in the accomplishment of the purposes of the organization. Any competition is supposed to be between organizations. Within and among corporations and nations the rules are excessively complicated, often out of date (old laws), not uniformly inforced, and most participants (people, corporations, nations, and other organizations) do not know or understand or agree with the rules! Not a very good game. Not pleasing to look at.

But if we do look at the whole world economic and political system as a game, what are the points? How are accomplishments scored? Governments, nations used to compete (rather conflict, fight, war) for territory, for exclusive trade with other countries, etc. Corporations are supposedly competing only for money. But money can’t be the whole story. At least some corporations must have some purposes besides making money. At least some corporations must make some goods or services like food, houses, health care or we would all be dead. You can’t eat modern money.

Economists reduce everything to money — for example Gross National Product (GNP), per capita income, etc. But these measures are inadequate because they ignore the details. Money spent on cleaning up a nuclear disaster has the same weight as money spent building a house. Average income ignores gross income inequality.

So in the case of the world political and economic system, the rules are so poorly defined that nobody has any clear idea what the points are. So if it’s a game, it’s not a very good one. It’s not one in which we can celebrate human excellence.

What’s the purpose of the world economic and political system? First, who ever asks this question? Almost nobody. If the question is asked, some people will say there is no specific purpose because it wasn’t designed or built by any one person and so it has no purpose. It just is. It developed and evolved over the history of humanity.  Some people will say that yes it is a system that evolved and although not designed by any one person it is still appropriate to say that it has a purpose and this purpose can be determined by the main things the system does. And what the system does is mainly the following. It produces food and other human physical necessities — goods — and necessary human services like education — and it DISTRIBUTES these (poorly) to the human population.

We need to build a world system with clear rules for corporations (and all other human organizations) and a system of points for their competitions so that a corporation gets points in proportion to its production and fair distribution of the human necessities. Money ain’t it.

Then maybe we will have a game where we can really celebrate human excellence.

Cooperative groups are everywhere.


In almost all cooperative groups different members will have different knowledge and different abilities. Those members of the group who have more or better knowledge or abilities about the attainment of the group goals, or are better able to communicate, or who have more charm or charisma than other members of the group are likely to  have more influence than those with less. They will be leaders. The others will be followers. Leadership is variable with time and circumstances. So who the leaders are and who the followers are can vary with time and circumstances.

The leader-follower relationship is characterized by a greater flow of information from the leader to the follower and acceptance of that information by the follower than in the opposite direction — from the follower to the leader.

In an educational cooperating group, the leadership of the teacher, in having more knowledge than the students is essential to the function, the goal of the group — to produce educated students.

Sometimes the success of cooperative groups is decreased or limited by deficiencies in the leader-follower relations between members. But for now let’s focus on what’s happening when a cooperating group is working reasonably well.

In the teacher-students cooperating group, the group will be working well when the teacher has the relevant knowledge, can communicate well, and maybe has charm or charisma and is able to maintain the motivation of herself and she is able to increase or maintain the motivation of the students at a high enough level. The students must do their part in increasing or maintaining their motivation to learn, to accept the information, knowledge, being offered, presented, by the teacher. Critical to this is that the students must have already been prepared by having acquired certain previous information and knowledge. The new information and knowledge being presented by the teacher is built on this previous information. New knowledge can only be accepted and acquired by a person if the person already has the foundation which the new knowledge can be connected to. A baby cannot say the words of a language until after it can make the specific sounds of the language. A student cannot understand (accept and acquire) algebra if he or she does not already understand arithmetic (addition, subtraction, multiplication, and division). Any motivation a student has to learn some subject will be destroyed if the student does not have the required prior knowledge.

Students must also have their basic human needs satisfied if they are to be motivated to learn. If they are hungry or overfed, or too cold or too hot, or worried about their safety at school or at home, if they have a less than nurturing home environment, if they have severe enough mental or physical health problems, all these can be distractions and interruptions to their motivation to learn in school.

Basic human needs must be satisfied for all the members of any well-functioning cooperative effort, not just teacher-student cooperation. In almost any cooperating group some educating is going on simply because information flows are not equal between every pair of members. But it isn’t educational in the sense of acquiring formal knowledge, rather it often takes the form of instructions about how to do some specific things. Knowing the prerequisites can be important for members in any cooperative effort just as in formal education.

In the educational cooperative group the cooperation level could be improved by teaching the students (at the appropriate times in their development) about cooperation and motivation to cooperate. For example students should be taught to recognize when they don’t have the prerequisites for understanding certain ideas or subjects. Many student’s understanding of their difficulties in understanding something new is limited to something like “I don’t get it”,  when the real reason may be one or more of the following: 1) They don’t have the prerequisites maybe because they didn’t understand or they don’t remember the prerequisites from the previous year, or maybe they were absent a few days before; 2) Maybe they can’t hear the teacher very well; 3) Maybe they can’t see what’s written by the teacher; 4) Maybe their thinking and attention is interrupted by worries about home life, their friends, or any kind of worry or obsessive thoughts. If students were taught about their own motivations and attentions they might be better able to recognize the reasons they “don’t get it”, and thus be able to do something to “get it”, to understand, to comprehend what is being taught. There has been much research on education. I would guess that the above is known and practiced by many.  I present the above only as examples of a few things deducible on the basis of information flows and how knowledge is built up.

The basic military social unit is an example, in its ideal form, of a very simple cooperating group. One person — the leader — gives orders, and all the others obey (carry out without question) the orders given. In a sense there is only one mind at work here, that of the leader. The followers in this military unit are mere instruments of the leader. But no human group operates this simply. First the follower soldiers must understand and accept the orders. Sometimes they don’t understand. Sometimes they don’t accept. In the real world they may question the order, they may ask for clarification. So the order itself may be negotiated. In carrying out an order the followers must rely on their own knowledge and experience and there is often much give and take among the followers as the orders are carried out over time in the combat or other situation.  

Sports — soccer, football, baseball, basketball, boxing, ping-pong, hockey and much more — is a large area of human activity. Sports is often seen as conflict — fighting. Yet it is a major example of cooperation. In team sports each team is a cooperating group, and the two teams together (and with officials and spectators) form a bigger cooperating group, and leagues of teams form an even larger cooperating group. Competition — two or more individuals, or two or more teams playing “against” each other —following previously agreed upon rules of the game — is cooperation. Competition is cooperation. Conflict and competition are not the same. Conflict is fighting. Fighting causes — and intends to cause — injuries, physical and mental, sometimes death. Sports like boxing that in the past had an explicit purpose to cause physical injuries have in the present moved away from the intention to cause harm by changing the rules of the game and by use of safety equipment. So sports which were once conflict, either actually or metaphorically, have moved away from intending to cause physical harm to the participants. They are now competition, not conflict. Competition is a test, a procedure, to determine which of two or more individuals, or two or more teams, does something better. Who can get the highest score — the most points calculated according to some rules from the number of touchdowns, runs, baskets, etc.

Every sport has rules — explicit and carefully defined rules that all the players agree to follow. And when there are ambiguities in the rules or accidental or intentional violations of the rules, there are officials, judges who make the final decisions on the score, points lost or gained, etc. So sports is a cooperation because all the players, officials, spectators are working together toward goals — each team to get the highest score, each judge to make the correct decision, the spectators to observe and celebrate human excellence.

No cooperation is perfect. Cheaters exist and they sometimes get away with it undetected by the officials. But the rules of the games have been evolved (and officials added) specifically to deter cheating. So cheating is minimized. If there were too much cheating in any particular sport people would lose interest in it because it would obscure the goal of the competition — to observe and develop human excellence.

Sports is a good example of a kind of cooperation among humans that depends on carefully developed, defined, and refined rules that all individuals involved are expected to follow. We can call such groups structured cooperating groups. Actually all cooperating groups are structured more or less.

Previously we talked of cooperating groups in terms of information transfer back and forth, between and among the individuals in a cooperating group. Communication is essential to cooperation. Sports is an example where most of the communication (information transfer) is non-verbal. In sports most of the information transferred between and among the individual players is visual:  Locations of other players, location of the ball, direction of motion of other players and the ball, emotional information given off by body movements and tensions and facial expressions. None of this is verbal in either the mind of the sender or the mind of the receiver.

The corporation is another example of cooperation, more or less. Corporations are legal entities. They are defined by laws made and enforced by governments. They are — or are supposed to be — constrained by the laws (rules) applicable to the creation and operation of corporations. A corporation also has rules it makes up for itself — its purpose, the kinds of activities it does or will do, its methods, its structure (most likely hierarchical), and many more. There is great flexibility in what corporations can do and how they are organized. In this sense they are much less structured than a sports team. On the other hand, since the range of activities a corporation can engage in is so much greater than what a sports team can do, in this sense a corporation may have much more structure than a sports team.

Corporations have evolved from simple and very limited and constrained cooperating groups operating according to a specific charter (rules) granted by a king, to something a few individuals can create by filling out a few forms and paying some fees, to multinational corporations larger than some nations both in terms of the numbers of people in each and money (gross national products and gross receipts). Individual corporations (or small groups of them) influence and dominate national governments. (I don’t say “control” because “control” implies 100% and nothing is 100%. But the percent of influence is very large.)

To explore all the actual forms of cooperation that occur in modern corporations is a task beyond my abilities (and maybe any single person’s abilities). But much research has been done on management, organization, and group behavior in corporations. For now, I refer you to Daniel Goleman’s book “Working with Emotional Intelligence” from 1998.