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Competition requires cooperation, but…

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Economists have placed so much emphasis on competition as a driving force for efficiency that it is sometimes considered a universal panacea. This ignores two facts:

1. competition occurs within commonly accepted conventions and rules, and these require cooperation;

2. where organisations compete against each other, a degree of cooperation is required within each organisation (note, for example, the assumption of a single profit-maximising objective, or failures of cooperation as one determinant of X-inefficiency).

Sennett recognises this:

“Cooperative exchanges come in many forms. Cooperation can combine with competition, as when children co-operate in establishing the ground rules for a game in which they then compete against one another; in adult life this same combination of cooperation and competition appears in economic markets, in electoral politics and in diplomatic negotiations.” (Sennett, 2012, p. 5)

But he also sees a reduction in cooperation in modern organisations:

“Changes in modern labour have in another way weakened both the desire and the capacity to cooperate with those who differ. In principle, every modern organization is in favour of cooperation; in practice, the structure of modern organizations inhibits it – a fact recognized in managerial discussions of the ‘silo effect’, the isolation of individuals and departments in different units, people and groups who share little and who indeed hoard information valuable to others. Changes in the time people spend working together increase this isolation.” (Sennett, 2012, p. 7)

Sennett, R. (2012). Together: the rituals, pleasures and politics of cooperation. New Haven, CT: Yale UP.

From: P.2 of World Economics Association Newsletter 3(4), August 2013 http://www.worldeconomicsassociation.org/files/newsletters/Issue3-4.pdf

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