|Intense competition in the stock photography|
trade leading everyone to do the
same damn thing.
LP: What are some of the positive aspects of competition? Does it help us excel and achieve?
MH: Competition makes really boring things a lot more fun.If you have a boring walk to do, for example, turning it into a race makes it more fun. I think my biggest concern about competition is that when it enters into things that really matter, things that require higher order thinking, its benefits become very dubious indeed.
In my book, A Bigger Prize, there's a long section on what I see as the extremely destructive role that competition plays today in education. This is about competitive parents who are teaching their kids to be competitive and also competition within the classroom. We know from mountains of research that work in companies, for example, is done mostly in groups and teams, and we know that teamwork is really difficult. We also know that teams that are really high achieving are highly collaborative.
But none of those lessons really are being taught in an education system where you compete to get into the right school, you compete for class rankings, and you compete for college places. What we're seeing is that the more the school system and the parents double down on this "If you don't win you're toast" kind of mentality, the more kids are absorbing the message that education is all about the grade.
Continued after the break:
LP: How do kids who are taught to be competitive tend to behave as adults?
Another cost is that if I'm only focused on the grades and on getting the right answer, then essentially what I'm doing I'm learning not to explore and think for myself. Of course, later in life we're going to ask people to think for themselves a lot because that's how innovation happens. But that's not at all that we're teaching. We're teaching that the high achievers are the people who get one correct answer. Your job isn't to explore or to find the best answer, just to second-guess what the correct one is. This is intellectually sterile and it encodes a sort of obedience into peoples' intellect, which is destructive. It produces what author William Deresiewicz has called "excellent sheep." If we want creative, original thinking in business or finance or whatever— that's not what this kind of system will produce.
MH: In my previous book Willful Blindness, I looked at what I think of as the food chain that led to the financial crisis, which was that you had individual consumers buying houses they couldn't afford, sold to them by realtors and property people who were competing to sell more properties at a higher price and so on. As I went from the consumer to the top of the big banks, along the way I talked to the head of risk at a big Midwest bank. She said to me quite frankly, "Look Margaret, I didn't like subprime, nobody liked subprime. We all knew it was ripping off poor people. But the thing is, I'm in a competitive market for salespeople, and if I couldn't offer these high commission products, my sales force would walk out the door."
That interview stuck with me and I thought, hang on a second, classic economy theory tells you that a competitive marketplace is superior because competition provides a diversity of products which is good for the consumer, and it also, therefore diversifies risk. And yet, in this instance, competition has led every single one of these companies to copy each other, which had concentrated the risk. And I thought, Wow, that's interesting. That's specifically what's not supposed to happen.
LP: Where did you see the most shocking failures?
MH: I think it absolutely fails in education. I would argue that it fails even in sports. A very useful piece of research done by a United States anti-doping agency shows that as sports has become more competitive and more high-stakes, more kids are dropping out of it because they pick up that sports is only for winners and if you can't win, there's no point in playing. So we have 80 percent of American kids by age of 12 doing no sports whatsoever. That's a catastrophe. This means that pro sports are not inspiring kids, they're turning them off.
I also looked at pharma, a very competitive industry where again, rather like the housing bubble, everybody's just copying each other. You get left-handed versions of right-handed drugs. For decades, we haven't had any real innovation; the competitive marketplace is not rising to the challenge of our huge health crises, like antibiotic resistance. Another interesting thing in pharma is that when these me-too drugs come out, they aren't cheaper, they're actually more expensive. Competition in that market is not even bringing prices down.
MH: One of the things you find is that the more a country believes in competition, the steeper the hierarchies tend to be. And the steeper the hierarchies, the higher the level of corruption.
The people at the top know they can get away with things, while the people at the bottom can't get things done the clean and decent way. So I suspect if you have greater and greater levels of inequality and steeper and steeper hierarchies, the people at the bottom don't believe the system will work — and it probably doesn't — and the people at the top think they can do whatever they want and nobody is going to catch them, and they're probably right. It really creates a condition where nobody believes in the system anymore. They all game it furiously, which of course means cynicism.