Humans, companies and trees race to the top - with some unintended consequences

CorporateNature No 152

By George ELIOT

1. COMPETITION LEADS TO A "RACE TO THE TOP"

Free market competition in capitalism creates a "race to the top" just like trees in a forest race to outgrow their neighbours and reach the top of the canopy, in order to maximise each individual tree's access to sunlight. This is clearly a very resource-intensive and energy-intensive process: 

- humans have to constantly develop new skills;

- companies have to innovate and iterate their products and services;

- and trees need to grow heavy trunks to reach higher and higher.

2. CARTELS CAN LIMIT COMPETITION TEMPORARILY

Trees are unable to strike a deal to limit the height of every tree in the forest, thus leaving everything to natural competition. While humans and companies could agree such a deal amongst themselves but it would result in a temporary and unstable equilibrium (as the video below about baggage carousel crowds and competing trees shows): everybody would have a strong incentive to break the pact. Furthermore, anti-monopoly laws forbid such cartel agreements in the corporate world.

3. GOVERNMENTS CAN LIMIT COMPETITION PERMANENTLY

One key stakeholder that can actually impose such levelling rules is the government. For example, the Chinese Government banned private for-profit tutoring of school subjects for school-age children in July 2021, thus putting a cap on the competitive pressure on parents (and students) to constantly upskill their children.

4. HOW "RACE TO THE TOP" BECOMES "RACE TO THE BOTTOM"

Why do we often see unbridled capitalism as a "race to the bottom" when it should in principle be a "race to the top"? Most human and natural systems function as a "winner-takes-all" game in the immediate enviroment of the winning person, company or tree. So while the successful individuals race to the top, they cast a shadow on those left behind, thus relegating them to the second or third division - which can be seen as pushing them towards the bottom. As a result, in the perception of an external observer, the big pool of players who are "pushed to the bottom" cannot outweigh the smaller pool of winning players who race to the top.

Why Trees Are Taller Than They Need To Be

"Superficial" is the word that unites oil slicks and Kim Kardashians

By George ILIEV
CorporateNature Metaphor Series, No 105

I recently attended a new book presentation on the management principles behind Kim Kardashian's success. I wasn't quite convinced in the validity of all those principles but I came up with an apt metaphor for Kim Kardashian instead: "superficial as an oil slick". 

An oil slick resonates with many modern social media stars and gurus in more than one way: 
a) it is thin in substance and floats on the surface;
b) it is mesmerisingly colourful;
c) it keeps changing colours, so it can keep you entertained.

Next time if I have a choice, instead of watching slides about Kim Kardashian, I'll just go outside and watch an oil slick in a puddle. I guess I'll learn a lot from the puddle.

Presentation of The Kim Kardashian Principle (Istanbul, May 2019)

Damned with great success: antibiotic overkill and overshooting torpedoes

By George ILIEV

Antibiotic overkill

There was a little noticed but most astonishing facet of the groundbreaking story about the discovery of the first antibiotic in almost 30 years: the deep initial disappointment of the research team who first thought they had discovered yet another detergent or bleach - so powerful an antiobiotic that it would kill any living cell and hence serve no use as a medicine. Later tests showed to their jubilation that they were wrong and the new compound, teixobactin, only affects germs. So a little less of the killer sauce seems to be a good thing.

Torpedoes that overshoot the target

From germs to warfare: in the 60s the US developed the Mark 45 nuclear torpedo: so powerful a weapon that it would destroy not only the targeted submarine but also the very submarine that launched it. The only way the weapon could be used was to explode the torpedo way after it had passed by the targeted submarine, so that the blast effect on the launch vessel would be reduced to tolerable. Yet, these overshooting torpedoes were just as effective at destroying the enemy target.

Lesson learned: take one less hair of the dog that bites you and you'll be just fine.

Photo attribution: Wikipedia

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