Monday, March 3, 2014

Cooperation is Like a "Farm To Market Road" for Competition

Or...cooperative frameworks already need to be in progress, before competition is possible. To that end, cooperation serves as a portal to competition. In the U.S., some small roads are labeled FM, which is an old farm to market designation and the source of my quirky post title. So how could cooperation be construed as a beginning point, to make more competition possible in a larger sense? Consider that market monetarists - for instance - seek greater stability through a nominal target for total spending capacity. But problems ensue when supply potential ends up constrained by political factions. That also leads to a marketplace where some supply and demand possibilities completely break down, making it impossible to know what full economic potential actually is.

Societal cooperation - in the form of domestic summits - could provide ways to address structural supply side issues which get into the way of demand provisions. Citizens of all walks of life live differently, and need to be able to express those income and cultural differences to a greater degree than is now possible. That is, people wish to live, work and interact with one another in ways which are not well represented by existing marketplace conditions. Presently, competition is construed  in static formations which not only limit competition and commerce overall, but make economic demand side issues even more difficult to resolve, in monetary terms.

Consequently, the only real "competition" left, is scrambling for the limited spots available in the overall framework. There's a difference between well thought out cooperation that makes competition ongoing, and the half thought through cooperation which leaves competition only partial as well. What's more, such partial negotiations tend to leave people with limited choices. In other words, these kinds of marketplace "remains" are a poor substitute, for the kinds of competition which would allow true economic access and choice. The "winners" are the residuals, in an environment which played the game so as to cycle through the significant competition possibilities, at the outset.

It's easy to view bungled processes up close, and confuse all the scrambling going on for a true competitive environment. In a recent post, Tim Worstall tosses out a somewhat irreverent, even macho review of a new book by  Margaret Heffernan, "A Bigger Prize: Why Competition Isn't Everything and How We Can Do Better". First, from the book summary:
...competition regularly produces just what we don't want: rising levels of fraud, cheating, stress, inequality and political stalemate.
She goes on to blame competition for everything from sibling rivalry to school burnout. In Heffernan's defense, plenty of discussion elsewhere phrases competition in similar terms. Even so, I can understand Worstall's response to her book - a reaction which can be summed up in a single word: fluffy. However, Worstall also focuses on up close and personal elements of competition - the ones I see as residual adaptations to a relatively non competitive environment, with this quote:
Market competition is how we choose whom to cooperate with.
While that seems backwards to me, I have to remember that Worstall may perceive ongoing "competitive" environments as necessarily static. Perhaps even more importantly, there are positive elements of static (especially from a conservative's perspective) which also need to be considered. After all, creative destruction might just decide on one's own personal niche, as a target - that's certainly happened to me a number of times. Worstall stressed that we aren't looking for "suppliers" continuously, and perhaps that contributes to his stance that the need for cooperation is also limited.

Unfortunately however, cooperation is particularly needed now, to give new life to competitive processes. In the 20th century, existing "farm to market" portals worked pretty well for most everyone. That meant cooperation in a larger sense was deemed less important. People not only forgot how to approach general decision making in cooperative terms, they forgot that it could even be necessary, to do so. What's more, governments aren't built for the kinds of internal cooperation which could utilize technology in more beneficial and adaptable ways.

As a result, governments confuse analog and digital processes to such a degree, that centralized and decentralized systems to combine the two no longer work. For instance, I've observed Social Security personnel continue to bungle up a simple recording and account procedure - one which seemingly could have been taken care of in a quarter hour - for the past five months. But everyone is used to government having sole responsibility, for multiple facets of the marketplace including its design. Who else is in a position, to think about arranging the pieces of the board for the benefit of the actual players?

This is also a conundrum for Arnold Kling, in that the libertarian desire for personal and economic freedom is completely thwarted by politics. He spoke of a need to just focus on work and family, and speculated whether libertarians could even reasonably hope for more. After all, what incentive does government have to craft common economic access for everyone? Umm, maybe there is an incentive after all - the possibility of national failures. Domestic varieties can be particularly nasty. And failure strikes most often, when special interests are most intent to make sure nothing changes - i.e. the present stance of business. Behind a pretense of "uncertainty" for do nothing attitudes, the reality is a certainty on the part of conservative business endeavor to protect its own.

Who even thinks about what free markets might actually represent? For instance, I rant against static markets on a regular basis, but to what end? Indeed the libertarian take in this regard may depend on generational circumstance. In other words, the older libertarian presently appears to "lose" wealth if digital contexts are allowed to coexist or even merge with the analog context of the marketplace. How much creative destruction is actually possible without undue loss? Or, how much flexibility can general systems tolerate without a compete loss of the status quo?

Something to remember: so long as it is left to government and business interests, free markets may not actually be possible, as Mark Perry indicates with this Milton Friedman video. What might governments think, if their own citizens organize for greater economic inclusion, and a better understanding as to what economic activity truly represents? For me, the flexibility of cooperation needs to lie within the larger context of where all roads lead. After all if cooperation does not exist for a common meeting ground, it can't exist up close in the aggregate, a few idyllic firms notwithstanding. But how is societal cooperation possible, if not through political means?

Consider the need to protect suppliers. This need arises because the consequences of economic setbacks are severe and quite difficult to overcome. To overcome this problem, a more flexible marketplace means reducing the risk to supply choices and financial commitments, by shared coordination in general marketplace settings. That way, if some product options and offerings fail, would be suppliers can start anew in personally managed settings without constant bankruptcies.

With more flexible platforms for general economic access and product offerings, everyone is also less inclined to block the first moves of others who seek to change product status. Fundamentally, humans wish to constantly tinker with product status: a primary reason why complex marketplaces arose. But oftentimes, the marketplace is set up so that commitment to highly specific economic activity or skill set use is all that is possible. Sure enough, the same marketplace that arose to protect participants, makes it difficult for them to adapt when it becomes necessary to do so. But the more that people are willing to cooperate this time, the more likely that real and ongoing competition might be the fortunate result.

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