Competition as freedom?

This week’s reading of Kohn’s No Contest mainly focuses on competition and its interpersonal considerations in a variety of ways and extends the same view of previous chapters using psychological data. Without reproach, Kohn consistently is of the view that competition is wholly a social construct, taking his argument to the farthest parameters. What the other two readings this week do is nicely fill in the gaps and add nuance to where Kohn’s argument is lacking. Buckert et al. offer evidence for the role of testosterone in the self-selection of competitive condition. Tepper eschews business monopolies and asserts that competition is necessary for economic and political freedom as well as for innovation. These alternative accounts to Kohn provide much needed nuance to his assertions.

The Buckert et al. study sought to measure “subjectively perceived stress” as well as physiological changes that were brought upon by an economic laboratory game that was based on solving as many arithmetic problems correctly as possible. The study had 3 conditions and a control group which only did the non-competitive condition. The first round of the game was based on a piece rate payment paradigm (non-competitive). The second round was payment based on a tournament condition or winner takes all scheme (competitive), where one person wins the prize in a group comprised of four individuals. The third allowed participants to choose their payment method: either piece rate or tournament (self-selection).

They found that the tournament condition did produce slightly greater levels of stress than the control condition and produced more of a physiological response like an increased heart rate and a decrease in mood and calmness. They were curious to see if the differences in responses were due to the self selection in the tournament condition. They used the model formulated by Salvador and Costa (2009) to suggest that an active coping style was associated with the self-selection into the tournament condition. They state that what constitutes stressors in competitive situations typically involve social-evaluative threats and uncontrollability yet what may be significant is the manner in which individuals perceive or appraise competition as potential challenges. Appraising competition as a challenge is associated with an active coping style and success, whilst the passive coping style is associated with threat and defeat. @kaitlynmayers5 very perceptively noted that this could mean that individuals with a passive coping strategy would over time be unwilling to engage in competitions and thus be at a disadvantage.

Buckert et al. also use the Challenge hypothesis and the Biosocial Model to interpret the results. The former states that competitive situations and their anticipation elicit an increase in testosterone levels. The latter asserts that increased testosterone from winning causes a reinforcement of “status seeking behaviors.” Testosterone acts on the dopaminergic system therefore potentially stimulating reward seeking and reducing fear and thus the self selection in competition. They observed an increase in testosterone with those who self selected the tournament condition. This can be observed in the enhancement of performance in the third round by those in the tournament condition. This does not indicate that competition subsequently increases performance but rather is a function of individuals who prefer the competitive situation. Both the biosocial model and the challenge hypothesis are predicated upon differential levels of testosterone in individuals and that winning reinforces those behaviors vis a vis the dopaminergic system, as well as competitive situations which are self-selected.

Jonathan Tepper in The Myth of Capitalism: Monopolies and the Death of Competition argues that Capitalism and the essence of it of has withered away in today’s market, and that a few major companies have a monopoly or an oligopoly in the market. He uses the example of Dr. David Dao who was dragged off a United airlines flight in 2017 due to an overbooking. Surprisingly or unsurprisingly, the airline’s stocks recovered. Analysts state that people are forced to fly with United airlines because of the consolidation of airlines and the subsequent local monopoly over most routes. Tepper argues that this pattern is seen in many domains from health-care to internet providers to phone companies.

Concentration of industries and thus a monopoly has caused a weakening of competition which has been intensifying in the last thirty years. Likewise, he posits competition and freedom are the essence of capitalism. Therefore, capitalism is waning. He argues this is problematic because economic monopolies have a parallel in political monopolies as major economic players have sway with legislators and regulators. Where Tepper proves an alternative to Kohn’s purely pejorative understanding of competition is that he asserts that competition is essential to political as well as economic freedom. Much like how Werron articulates competition in terms of two competitors vying for the favor of the audience. For Tepper, artificial scarcity is produced by monopolies. The lack of monopolies reduces this “scarce good”, and thus provides the “audience” with the political and economic freedom which is a result of competition.

The rhetorical method used to bolster his argument is by citing Lenin who asserted that monopolies were the last stage of capitalism. Yet when the monopoly that the Soviet Union created ended with its fall, the shortage of supplies caused riots. In a sense, Tepper aims to persuade us into thinking that the American economic situation is imminently approaching that of the aftermath of the Soviet Union. I think this rhetorical technique is one that appeals to our fear response but overall is not very persuasive. Where he is more persuasive is in arguing that concentrated monopolies create artificial scarcity, which Kohn has argued in previous readings, as well as high profits due to offshore production, but which also makes them incredibly fragile.

Tepper also cites Geoffrey West who analogizes the market to organisms. Successful small companies who survive tend to thrive and grow to become larger, but as they grow older, they slow down in terms of innovation. Their funding is subsequently displaced towards bureaucratic expenses. As companies get larger, they buy out smaller companies and kill off the productivity in the economy. He argues that firms find it to be more profitable to reduce supply and keeping prices high than to invest in growth. Furthermore, he cites one study that found an inversely proportional relationship between innovation and the concentration of industry or monopoly of power. Thus, he argues persuasively that competition is essential to innovation, which happens to be one of the hallmarks of human evolution.

Thus, Tepper argues for competition as being necessary for political and economic freedom as well as for innovation. Buckert et al. argue that testosterone is tied to the dopaminergic system and further encourages competitive behaviors, which was seen most prominently in the self selection tournament condition. Both of these alternative arguments complicates Kohn’s arguments of competition as being purely pejorative as well wholly a social construct.

7 Comments

  1. Thank you for sharing your response. I think that it’s interesting that you point out that concentration of industries has caused a weakening of competition. I wonder how this works; I would assume that more industries would mean more competition in business rather than a weakening of it. The comparisons to the Soviet Union are intriguing. I had never heard the term “artificial scarcity” before and would be interested to know more about the term and what exactly causes an artificial scarcity of something.

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  2. The way that I related the Buckert et al. article to the overarching theme of my post was such that the individuals in the third round of the experiment self-selected via free choice into the tournament/competitive condition. What was observed was an increase in testosterone and performance. In a sense competition itself does not produce increased performance, but rather their free choice to compete that lead to a better performance. Therefore, competition acts indirectly here.

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  3. So I think were using the word concentration here differently. When I use the word concentration here, I’m referring to fewer companies dominating a certain market or rather a monopoly. The argument that Tepper is making is that when a few major companies monopolize a certain domain of business, they leave the consumers with fewer options and can thus dictate the rules.Therefore, they can produce less product and keep prices high because the consumers have few companies to choose from. This is what causes the artificial scarcity. Theoretically, the companies could produce an abundance of a product, but choose not to because they can. I hope that makes it slightly more clear.

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  4. Hi,

    Thank you very much for your insightful blog post. The connections you made between Tepper’s two articles and Bucker et al. were excellent. However, I would like to suggest that we also connect your commentary to an optional reading from Week 8; Amos Schurra and Ilana Ritov called “Winning a competition predicts dishonest behavior”. I wanted to bring this up because the theories Berg’s article addresses link to it. During a competition between participants, stress increases and testosterone increases. It is possible that the conclusions Berg made about testosterone increasing could then lead to the conclusion that winning leads to dishonest behavior. Then, to continue this web of connections between articles, if winning predicts dishonest behavior then this could bleed into society at large. Thus, linking to Tepper’s article “Myths of Capitalism” as dishonest behavior from winning could lead to large for-profit companies overtaking all the small and innovative businesses in any given market.

    Anyway, this messy theory essentially is asking the question; is competition ultimately beneficial or harmful to society? As usual, the answer is up for debate.
    Hope you find these connections interesting. Thanks!

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  5. Hey Charles! I appreciate you taking the time to read the post and think about the connections between our readings as well as think about the larger implications for society. As i have not read the Ritov article, I don’t know what the methods for the study were. I’m not sure if we can apply the studies we looked at which are limited in scope to a system i.e the domain of business. However the line of reasoning seems logical and it would be interesting if we could find studies which try to map that out. So, I agree that this is a fascinating direction the question could be taken in. Thanks again!

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