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.