Competitive Destruction

I recently read an article about how nature both competes and cooperates, to stay in balance.  Natural competition happens within ecological niches, or slots, in the system.  But the overall system is sustained by how the most successful species – in each slot – out-adapts it competitors for limited resources.  It also produces something of value to other species, thereby supporting the system as a whole.

 

It’s called “survival of the fittest”.  In other words, natural systems sustain themselves by limiting the competition to within the various slots.  Here’s a good example; although some birds compete with other birds they don’t compete with primates.   Those birds that succeed provide a natural seeding process from their droppings to reforest the jungles that support primates.  And on and on, so that nature is in balance.

 

I thought that this metaphor for business competition might be instructive.  For instance, is our fierce commitment to worldwide business competition unraveling our economy?  Have we reached a point where our competitive nature is destroying us?  One of capitalism’s central beliefs is called “creative destruction”.  In Joseph Schumpeter's vision of capitalism, “innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power”. 

So in his view, creative destruction is good for us in the long run.  Certainly true up to this point.  Here’ my worry.  Nature preserves itself by way of a natural plan.  It all works in sync and species come and go based on their ability to adapt.  But the surviving species support the whole.  This way the system stays intact.

Economic competition doesn’t seem to have such a plan.  Various countries compete with each other and don’t provide any support to the overall system – except to their own inhabitants.  So if an industry in China puts an industry in America out of business – in other words, out-adapts it, there is no replacement support to the American system. 

In other words, we’re the primates depending on the forest that is no longer seeded because the birds have moved to China.  The current wisdom is that a global economy is good for us.  I’m beginning to doubt that wisdom.  It’s a subtle but well known fact that when we artificially relocate a species, both ecological systems are threatened.  There are often no natural predators and both systems suffer.    

There is a natural symbiosis that should exist in all complex systems.  In a healthy system, all of the subsystems participate in mutual support for the whole system.  Remove one without a functioning replacement and the system eventually collapses.  This sounds a lot like what’s going on right now. 

We’ve been losing our manufacturing industry a piece at a time.  The benefits are going to other countries.  The damages are staying here.  And we are being told that we can replace our loses by consuming more.  That’s like saying, don’t worry, the birds no longer seed the forest but we can get along without trees – even though that’s where we find our food.  In fact, you can solve this problem by eating more. 

Sound like nonsense?  It does to me too.  It took Mother Nature millions of years to develop the ecological system that we enjoy here on planet earth.  Fortunately for us, there are balancing mechanisms in place that protect us to some extent.  But our economic system is in the earliest stages of its development by comparison.  Disturb a few subsystems here and there and who knows what will happen? 

I think we’re beginning to find out.  I reject the notion that unfettered global competition is in our best interests.  In order for that to be true, all countries of the earth would need to operate according to an overall plan and play by the same rules.  It’s just not happening.  Until it does, I think we need to keep our birds at home.  

Robert DeFilippis