Sunday, May 13, 2012

The Paradox of Competition

     It may seem that sports should be the domain of pure
competition.  Yet, professional sports leagues and even colleges
stifle competition in pursuit of mediocre teams.  Professional
sports limit competition for players with drafts and salary caps.
Colleges severely limit the rewards paid to athletes.  Also, the
colleges limit the number of players that may be rewarded with
scholarships.

     The goal is to force all teams into the realm of
mediocrity.  The ideal is believed to be to have all teams as
equal as possible.  This goal is often stated as being parity.
When all teams are equal, all are mediocre.  None excel.

     Consider what would happen with full competition.  The
more successful teams could attract the best players, managers
and coaches.   They would become even more successful.  The
weaker teams would grow even weaker.  In professional sports
the weaker teams would fail.  Soon the excellent teams would be
running out of opponents.  It would be a hollow victory to have
the greatest team on Earth if it was also the only team on Earth.

     Reducing all teams to mediocrity allows all teams to
entertain their fans with some victories.  Every team has a
chance to win a championship occasionally.   For professional
sports, full competition can be a disaster.  For practical purposes
major college sports are professional except in name.  The goal
of the schools is to collect the most dollars possible.

     What would happen if we sought the same parity for
businesses?  Imagine that there are 100 widget manufactures.
Some make better widgets than others.  Some make widgets
more efficiently than others.  With free competition the better
widget makers will sell more and more widgets while the weaker
widget makers will sell fewer widgets.

     The weaker widget makers will fall by the wayside
leaving only a few of the best to make all of the widgets.
Suppose that someone decides that this is a bad result.  They
want to achieve parity among all widget makers so that all can
stay in business.

     The parity seekers pass laws limiting the quality of
widgets to a level all can achieve.  They take earnings from the
best widget makers and give them to the worst.  What happens if
the program succeeds?  All the widget makers and their
employees continue doing what they did.  No one loses his job
or business.  The parity seekers were completely successful.  A
byproduct of that success is institutionalized mediocrity and
inefficiency in widget making.

     Part of the price of that mediocrity is widget consumers
must settle for inferior and more costly widgets.  The extra
money they spend on inferior widgets limits their purchase and
use of other things.  Everyone is poorer because of the
mediocrity created to save the weak widget makers.

     The consumers may not complain.  With no one making
better and less costly widgets, the consumers may not realize
that they are being ripped off to benefit inferior widget makers.
It is vital to the sustaining of mediocrity that all excellence be
wiped out.  Good examples are dangerous to the health of
mediocrity.

     Unlike in the sports world, the excellent widget makers
don't need the weak ones.  Neither do the consumers.   The
excellent widget makers can expand production to efficiently
supply all of the needed widgets.

     Laws and subsidies that keep weak producers going
always push us deeper into the world of mediocrity and waste.
Instead of pursuing universal mediocrity, we should encourage
and reward excellence.  This the only way to sustain and
increase our standard of living.

     Nowhere is mediocrity more institutionalized than in
government schools.  The government school system has
perfected the rewarding and sustaining of the weak and
inefficient.  Until we encourage and reward excellence while
letting the inefficient and poor producers fall by the wayside,
schools will continue to wallow in the abyss of mediocrity, or
worse.

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Copyright 2012
Albert D. McCallum
18440 29-1/2 Mile Road
Springport, Michigan 49284

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