Competition (was: Corporate transparency)

Owen Byrne
Tue, 8 Jan 2002 23:43:59 -0400

On Wed, Jan 09, 2002 at 01:46:06AM +0000, Russell Turpin wrote:
> Owen Byrne:
> >And is there really any capitalism left in the US? Isn't competition a 
> >prerequisite to capitalism? ..
> Competition has been both misunderstood and overstated. It's
> not about head-to-head competition between multiple firms
> making the same widget for the same market, and really never
> has been. Rather, it's about the ability to continue to fit
> a niche in a dynamic environment where niches are defined by
> the other players. The same is true with ecology. "The lion
> is the king of the beasts." But the lion does not frequently
> battle bears or tigers or even hyenas. Rather, the lion is
> very good at being a predator of herbivores on the savannah,
> and as importantly, at surviving the parasites that inhabit
> lions. And when the hyenas want the lion's kill, they don't
> fight to the death. The lions simply chase off the hyenas,
> unless the lion is alone and the hyenas are many, in which
> case the lion also understands the limits of its niche.
> Capitalism is a genetic algorithm in the truest sense. It
> is more about evolution than optimization.

Glad to get the social darwinist take on competition. What a load
of drivel. The more appropriate analogy for the united states would be
the lions and hyenas signing a Joint Operating Agreement to start
a herbivore farm on the Sarangeti Plain and develop quotas for dividing
up the wildebeest. And the government developing new programs to
ensure a supply of compliant and well-qualified herbivores (at the 
herbivores expense, of course) thus creating a "healthy environment for 
lion-hyena competition." 

The current management fad in B-School is - "Best Practices" - which 
basically means copying the leaders in your field.
So we have a lot of hyenas desparately trying to become lions. 

"Relevance Lost: The Rise and Fall of Management Accounting" is a good 
book about the functioning of corporations. First tip - while economic
theory - which seems to be what you're spouting above - says that
companies maximize profit, in reality that's the last thing they do.