When Darwin wrote the book Origin of the Species, he outlined a fundamental concept concerning living things. The fact that they compete. When you look at the world around you today even at the most civilized level, we humans are still constantly competing.
Yet eco-scientists everywhere are demonstrating ways in which living things can better survive by co-operating instead of competing through ecosystems. We humans seem to be missing the point. In truth, a lot of the systems that keep the universe in motion run entirely on cooperation. Electrons attract protons and help keep an atom stable. This interaction also helped man produce electricity. Cells in our bodies have to cooperate in order for a human being to survive. Plants give us oxygen and we give them carbon dioxide back. Cooperation is all around us.
These are all examples of natural cooperation. But there is also natural competition. This is when the natural situation of our existence demands that we rival other entities for our own survival or prosperity. Given that most systems work on cooperation, these circumstances are actually very rare.
So rare they only happen once in a billion years to lead to the extinction of entire species (if you actually believe in evolution) or an entire industry. So if this is the case, we have to ask ourselves; where does all the extra competition come from?
As humans we are always creating competition where there needn’t be any. Think about ticketing methods for instance. We all know about the advance ticketing method that gets people to buy tickets for a show much more quickly than they could have. The value here for the vendor is to reduce the risk of low turnouts by selling at a lower price – an unverifiable risk at that. However, the product remains the same for people buying at the door as that for advance ticket holders. What you have is two prices for the same product, but with no added value for either purchaser. Where’s the sense in that? Aptly enough, I have often changed my mind about attending events once I found out that the event had cheaper tickets which I was not aware of and can no longer access. It feels like a discrimination of sorts – a rip off. I call it hyperinflation in hours.
Another example would be preserved bookings for a product at no extra cost. How does one lay off a customer who is at the shop for one who is far away because he simply made a phone call to express interest. It totally goes against the age old wisdom that states “A bird in hand is worth two in the bush.” Reservations only matter when they come with advance payments. Yet such sales systems still exist in the world of business.
The thing about all this is that competition spawns more competition. If you make something scarce for one person, they will make it even more scarce for the next person and so on. Natural competition is based on real value and real scarcity (absence of value). Inflation adjustments are often made to heighten a state of competition between different members of the economy i.e. the buyers vs the sellers. There is virtually no value created for either party at the end of it all. The system just bleeds both of them dry.
No product out there is indispensable and unsubstitutable. When we accept inflation adjustments, we are often accepting the contrasting statement. Instead of having price increases that create artificial competition between buyers and sellers based on economic forces we should have natural competition that sees new suppliers enter a market either with similar commodities or substitutes. This way a piece of the demand cake can be shared to more people.
The bottom line is that human beings should always avoid systems that create artificial competition in favour of those that produce natural competition. Natural competition is constructive competition. Artificial competition is destructive.