Thursday, January 19, 2006

Vertical Integration

Competition is a strange thing. It seems like two parties trying to undo what the other has done. And in essence that is what it is. It seems so wasteful, yet it is everywhere and it is encouraged. Why?

Something happens when the parties try to undo each other's work. That is that they try to find new ways to undo each other's work. They innovate. Like tectonic plates that push against each other so hard they raise each other up into a mountain range. Each layer of defense and offense creates something real out of the apparently destructive forces. These layers are responsible for capitalism, sport, democracy, I even suspect romance. The American system of checks and balances uses competition beautifully.

I have identified two things that can stop this destructively creative competition: apathy and cooperation. Apathy would be as if both tectonic plates stopped pushing and so they settle back down to sea level. There is no defense against this and it happens all the time to companies, leagues, nations and relationships. Usually described as 'fizzling out'.

Cooperation, on the other hand, we do have a defense against. Sort of. Back to the techtonic analogy, this would be if two plates met, maybe even influenced each other but never directly opposed the other. Like if they took turns pushing each other or pushed sideways rather than against each other. And so there is no destruction, hence no innovation. In the case of capitalism and democracy we try to use law to discourage cooperation. The thing is that when you are dealing with complex organizations like political parties and multi-national companies cooperation is a very hard thing to identify and define. So rather than deal directly with cooperation our laws try to regulate that which is needed for cooperation: communication.

It is illegal for opposing offices in a political campaign to coordinate schedules and strategies, and opposing companies cannot discuss pricing and promotions. But communication is a strange thing. Just as a person can 'make a statement without saying a word', organizations have ways of communicating information that simply cannot be regulated.

Competition can never be hardwired into any system. Assuming it stays energetic it takes innovation to recognize cooperation and discourage it for the sake of competition.


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