Unthinkable Thoughts on Competition
BROCKWAY, GEORGE P .
The Dismal Science UNTHINKABLE THOUGHTS ON COMPETITION BY GEORGE R BROCKWAY Chief Justice Warren Burger used to use his addresses to the American Bar Association to complain that the courts (and...
...He allowed himself to wonder in public whether the Anglo-American legal system—otherwise known as the adversary system—might not be something less than perfect...
...Chief Justice Burger was not the first to notice that this is a shockingly expensive way to get shockingly uncertain results...
...A shocked silence followed...
...In a vivid and oft-quoted phrase, Thomas Hobbes, the first modern British philosopher, wrote that the life of man in a state of nature was "solitary, poor, nasty, brutish, and short...
...Both ideas are deeply imbedded in the Anglo-American tradition...
...In brief, the theory is that, given the nature of man and woman, the adversary system is the best we can hope to devise...
...His notes for several cases survive...
...What, then, becomes of competition...
...The contest between the partial truths leads the jury to the whole truth...
...Competition rewards the efficient and effective producer, and it does so by laying before the consumer the greatest array of the best products at the lowest prices...
...The atomic system cannot generate anything without contradicting itself...
...We all learned at our mother's knee that competition makes everything come out right, and that the knocks we took in midget football not only were good for us but also made America strong...
...Humpty Dumpty, a true atomist, proposed to be in charge of his words, yet he could not even state his purpose without using words that were meaningful because of the social and historical uses made of them by others...
...In the minutely fragmented and fiercely competitive textbook business, competition frequently has the effect of pushing prices up rather than down...
...It is often claimed that trial by jury is a humane development from medieval trial by combat and trial by ordeal...
...Among others was Abraham Lincoln, a great President who had been a successful trial lawyer...
...Thus, that aspect of the antitrust laws that is supposed to foster competition is wrong-headed, and it would be equally wrong-headed to try to foster cooperation...
...A century after Hobbes, David Hume, a friend of Adam Smith's and an early formulator of the mischievous quantity theory of money, could not see a "necessary connection" between natural events, let alone between human beings...
...You can carry the argument a step further...
...Although there are good reasons for antitrust laws (small is beautiful), they are confused and compromised by the attempt to make competition an objective of policy...
...The reason is rather that we are naturally solitary...
...It is the pathetic fallacy...
...Competition, in short, automatically drives prices down and quality up...
...It turned out that he had been thinking the unthinkable...
...If consumers are confused or stupid, that's not the market's fault...
...The British tradition embraces an atomic theory of truth and of man...
...in one of them his strategy was "Skin the defendant...
...Whatever the atomic system generates, it is not right or wrong, any more than catbirds are right and cats are wrong...
...This year the ABA met in Las Vegas, a city renowned for its cultural and intellectual advantages...
...John Locke, philosopher of Britain's Glorious Revolution and mentor of our Founding Fathers, had a more sanguine temperament than Hobbes, yet still based the right of revolution on the original separateness of mankind...
...The Dismal Science UNTHINKABLE THOUGHTS ON COMPETITION BY GEORGE R BROCKWAY Chief Justice Warren Burger used to use his addresses to the American Bar Association to complain that the courts (and presumably the society as a whole) are plagued by incompetent lawyers...
...But of course our competitors put in color, too...
...You may regard me with prudent wariness...
...The reason for this is not, as the medieval mind had it, that in Adam's fall we sinned all and so are naturally depraved...
...Our press runs went down and our costs went up, as did everyone else's...
...But whether I prosper or fail in my purposes can be only an incidental or sentimental concern of yours...
...Nor is the state of the world improved by 156 nations playing beg-gar-my-neighbor...
...Gerard Debreu won the Nobel Prize last year for almost proving this absurd theory mathematically...
...The trouble with the atomic view of mankind goes a lot deeper than the mere fact that competition doesn't always produce the good results claimed for it...
...If you are fundamentally independent of me, what interest can you have in me...
...In Adam Smith's firstbook, The Theory of Moral Sentiments, he announced: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him," and so on...
...You may contemplate using me for your purposes...
...The alleged principles in man's "nature" are on the same level as the mother love of birds that even great biologists like the late Jacques Loeb like to enthuse about...
...This is only superficially so...
...Or even the Super Bowl...
...Even though businessmen, like everyone else, have no other intention than to get ahead, to do this they must offer the consumers a better deal than their competitors do...
...They consequently have no reason to trust each other or their society, either...
...Gilbert was confident that Victorian audiences would laugh when the Lord Chancellor in Iolanthe sang of his youthful resolution never to "throw dust in a juryman's eyes, or hoodwink a judge who is not over wise...
...we lost our advantage, and with it, our larger market share...
...Since he named no names, a few law school deans grumbled a bit, while everyone else said ho-hum and wondered why he belabored the obvious...
...The alternative is to recognize openly that every party to a law suit (including the "people") is out for number one, and exclusively for number one...
...With the larger market share, resulting in longer press runs, we could do this without raising our price...
...Trial by jury assumes that neither litigant (the "people" being one of them in a criminal trial) knows the whole truth...
...For that is also based on an atomic theory of mankind...
...We all then did what we had to do: We raised our prices...
...In the same way that adversary litigants are said to reach the truth by trying to confuse each other (and the court), adversary businessmen are said to outwit each other into being productive, efficient, forward-looking, and cheap...
...and no one any longer thinks it feasible (though Lewis Mumford proved it cost effective 50 years ago) to produce local brands of soap or cornflakes or myriad other standard products whose manufacture does not require high entry outlays...
...Trial by combat and trial by ordeal assumed that God, the Mover of the Universe, would reveal the hidden truth by giving the just man strength to prevail or survive...
...He might as well have quesioned Mother's Day or the Little League or the Space Shuttle...
...Most people are dimly aware that things don't work this way in the world of big business...
...Everybody is out for number one...
...Today, anyone who has been a plaintiff or a defendant or member of a jury (though of mild disposition, I have been all three) could, without straining, think of possible improvements in the system...
...Let them all do their damnedest to win, since that is what they will do anyhow...
...Proprietary medicines outsell their cheaper generic equivalents...
...The trouble with this apology is that the theory of the free market requires both buyers and sellers to be perfectly informed and perfectly rational...
...Being clever devils, men get around this by pragmatically forming societies for their own reasons, and they disregard or dissolve the societies for their own reasons—unless restrained by the leviathan-state...
...If men and women are naturally atomic, solitary, responsible only to themselves, you have a problem when you try to devise a system for settling quarrels . The leviathan-state can torture people into telling the truth, but torturers are untrustworthy, too, and have been known to ply their trade to pay off grudges, or simply for the fun of it...
...I'm here to tell you that it also doesn't work as it is famed to do even in what Galbraith calls the market system...
...Likewise, the best society is not one where workers are in a life-and-death contest for jobs...
...Grace abounding might take care of all that...
...Chief Justice Burger may be comforted to learn that he has emboldened one citizen (me) to wonder about the economics counterpart of the adversary system, which is the idea of competition...
...A systematically solitary man has no words to express his ideas...
...W.S...
...I don't know, but I think we can say at least this much: It is not the foundation on which to build an economics system, nor is its encouragement—or discouragement—a proper obj ective of social policy...
...I was once a protagonist in such a drama, when I saw a chance to capture an extraordinary share of the market for a history textbook by inserting full-color illustrations where the competition had black-and-white...
...The fundamental difficulty is that if you start with the atomic view, there is no way to generate the idea of what is good...
...In our day, Bertrand Russell's view was not essentially different...
...Although the Chief Justice was said to disapprove of the site, he went anyhow to give the assembled lawyers the benefit of his thoughts...
...therefore, each should marshal the evidence as strongly and as one-sidedly as possible...
...There is, however, another side to the story—what literary critics would delight in calling the dark side...
...I mention the adversary legal system only as it throws light on the competitive system in economics...
...I hope the Chief Justice will be alert to these problems as he ponders the future of adversary justice...
...automobile manufacturers believe (with market surveys to support the belief) that price competition forces them to resist installing safety air bags...
...If you wanted to coin a phrase, you might say that the jury is led to the truth as by an invisible hand...
...John Kenneth Galbraith, who writes too well and too sensibly to be a likely recipient of the Nobel Prize, has taught us not to expect the free market to work in the world of big business, which he calls the planning system...
Vol. 67 • April 1984 • No. 6
