Date: 2024-04-29 Page is: DBtxt003.php txt00020483
Progress and Performance
How the System Works
Umair Haque ... Where Does Prosperity Really Come From? ... Why the Great Lesson of the Last Century is That Cooperation Outcompetes Competition
Peter Burgess
Where Does Prosperity Really Come From? ...Why the Great Lesson of the Last Century is That Cooperation Outcompetes Competition
Image Credit: Laine Wilson
Here’s a tiny question. Where does human prosperity really come from? Economists and thinkers have been asking it from the dawn of time, like alchemists seeking the secret of making lead into gold. And yet one of the greatest tragedies and absurdities of this age is that we’ve finally discovered the formula for prosperity — only much of the world is regressing backwards into nationalism, tribalism, and fascism, willingly bling to it. What the?
American economists claimed that the recipe for prosperity was this:everyone works hard — really hard — they “innovate”, they make things the world wants, they sell those things to the world, and bang! Before you know it, a society’s prospered. This idea went by many names: “trickle down economics” and so on. The central idea was this: we must become ever more competitive. As organizations. As people. As individuals. We must never, ever stop being more and more and more competitive. Was this theory — competition leads to prosperity — true? If we grow ever more competitive, don’t we cross the line into cutthroat aggression and selfish narcissism?
You don’t have to look very hard to see how catastrophically this theory of prosperity failed. America became a rich country, in a way. But a small number of people — usually the most predatory in society — having a very large amount of money is not the same thing as a prosperous society, a society of prosperous people. It is a very different thing entirely.
Americans work harder than anyone else in the world. They innovate at a lightning pace — they still make the world’s iPhones and whatnot. But the average American lives in effective poverty. Yes, really: half of Americans work in “low-wage jobs”, about 75% of Americans struggle to pay the bills, 80% live paycheck to paycheck, they’ll all die in debt, and income, life expectancy, and happiness are all plummeting.
It’s hard to wrap your head around that paradox. How did America become a rich country…of poor people? How did it become a wealthy country…but not a prosperous one? What the? It’s difficult to grasp — until you think of all the things Americans don’t have. They’re basic things — the most basic things of all. American thinking had turned gold into lead, instead of lead into gold, somehow.
Contrast America with Europe, to see those things clearly. Europeans enjoy all the following as basic human rights: healthcare, retirement, income, media, transport, often childcare, elderly care, housing, and savings, too. Americans enjoy none — not one — of those things.
Who lives the better life? The average European does, by a very long way. Young Europeans are going to live probably a full decade longer than Americans. They’re going to do things that should be average, everyday things — buy homes, start families, raise them, educate them, retire. Young Americans will struggle to do any of those things. The societies with the most upward mobility, happiness, trust — they’re all European.
So what did Europe do differently? It’s theory of prosperity was radically different from America’s. Let me go back to America’s, and crystallize it, to really explain. The American theory of prosperity has always been about the central notion of “competition.” I compete with you, you compete with me, we all compete with everyone else. Over time, this theory became so extreme that Americans forced each other not to have healthcare or retirement — those became things that should only go to people who were the most “competitive.” But who was that? Just a tiny few, it turned out.
The American idea of competition led to a society, culture, and economy in which people became each others’ aggressors, punished each other, forever denying each other the basics of life — that way, everyone was induced to fight bitterly for them…to fulfill this great social goal of becoming ever more “competitive.” Even, yes, at making all those innovative things the world wants. But what about the downsides of competition? What about the feelings of dread and worthlessness and fear, of constantly being threatened, annihilated, the weariness of having to see your neighbor as a rival, enemy, adversary? Wasn’t making everyone compete for the basics only going to lead to deprivation of them? And what about this: isn’t there a fine, fine line between competition — and hate?
The European idea was this. We’ll cooperate to give one another the things we need, value, and treasure most — not compete over them. Decent healthcare, retirement at a sane age, human working conditions, a good education. All those things aren’t things that everyone will have to compete for — they will simply have them, because we are all cooperating to give them to each other.
(Who’s “we,” by the way? It’s not just within countries — but across them. Europe was so dedicated to this great theory of cooperation over competition that it formed the EU, which makes joint investment by all European countries in all of them, precisely in things like education, healthcare, transport, media — public goods, which are meant for all.)
So when I contrast Europe and America, I’m really contrasting two diametrically opposed theories of prosperity: cooperation and competition. And European cooperation, by the way, doesn’t mean Soviet-style — enforced, coercive, punitive, totalitarian. It just mean gentle, voluntary, and self-governed.
American thinkers said this — for decades: Europe was a “sick man,” because it wasn’t competitive enough — literally. LOL — laugh with me a little, because they meant it in an insulting, arrogant, demeaning way. Europeans weren’t making enough of what the world wanted at a cheap enough price, they weren’t “competitive” enough — like Americans, who were becoming renowned the world over for cruelty, hostility, aggression, rage.
American thinkers demeaned and scorned cooperation — thanks to the Red Scare — and so Americans were forced to be ever more competitive. They became so competitive that today they have to compete for things like insulin, without which they’re just left to…die. A fact that Europeans simply can’t process because it seems so barbaric and unnecessary. And yet Americans are made to compete for everything they can simply give one another — healthcare, education, finance, retirement, and so on. There is never enough of these things to go around, they’re kept in artificial shortage, precisely so that Americans have to compete for them. That is the social economy of America, in a nutshell.
Weirdly, Americans thinkers thought that making people compete for the basics of life, by keeping them all in artificial shortage was fantastic and wonderful and awesome. Wow! We’re becoming more and more competitive! But wait — is that a good reason to keep things like healthcare and education from people? Because it forces them to become hostile and aggressive? And what happens when that aggression and hostility becomes an act of fear, desperation, and panic? At what point does competition mutating into aggression become… hate? America was about to find out — the hard way. What American thinkers didn’t see — because they were too busy insulting Europeans for not being “competitive” enough — is that Europeans were rewriting the boundaries of what it meant to be cooperative.
Every single year, for decades, Europeans cooperated more and better. That’s changing now — thanks to a generation of leaders who foolishly idealize America. But for a very long time, seventy years or so, Europeans cooperated more and more, to build better and better social systems of great public goods. Today, a European can travel anywhere — literally anywhere within the EU — and be guaranteed good healthcare, retirement, education. An American can search far and wide and find none of those things.
What had happened, in technical, formal terms was this. Europeans were cooperating to invest and reinvest their social surplus in one another, through continent-wide systems of public goods. The surplus generated by their productivity was put right back into great social systems of retirement and medicine and so on that cared for everyone. To what amount? Almost exactly perfectly balanced — fifty fifty, which is roughly how much Europeans are “taxed”, but the correct word is investment.
Americans, in contrast, were busy being intensely competitive — selling stuff to the world, trying to outdo one another by being more “productive” and “efficient” — but they only ever got poorer. They grew poorer and poorer for about fifty years — twenty years longer than Soviets, by the way — to a point that the middle class finally imploded, and became a minority. At that precise moment, authoritarian-fascism arose, and a demagogue surged to the Oval Office. A coincidence? Hardly. Competition had become hate. Americans by now lived in a state of fear, panic, despair, and anxiety.
(Think about it: would you like to wake up every day, and fight everyone else for…the basics you need to live? Whether insulin or food on the table or your kids’ education? Of course not. That’s a thoroughly traumatizing affair — it dehumanizes you, it alienates you, and it makes you think of everyone else as your enemy. You grow afraid, paranoid. Your fear becomes anger, and your anger becomes white-hot rage. Eventually, a demagogue comes along who says: “Those subhumans are the ones who are the problem! Hate them! Annihilate them!” And because all you’ve ever known was the adversariality of competition, to think of others as enemies — it only seems logical. Bang! That’s the story of American implosion in nutshell.)
While America was collapsing — remember, it’s stagnated fifty years, twenty years longer than the Soviet Union — Europe was busy…well…prospering. To a degree that’s never been seen before in human history. Yes, really. Nobody else has lived as long, happily, healthily, sanely, gently, or in such security as modern day Europeans. I don’t say that to idealize them — just to point out a fact everyone should know.
So. Where does prosperity come from? The examples of Europe and America are the single greatest real-world experiments that have ever been, in all of the long, dark, strange history of civilizations. Two diametrically opposed ideas. One people who chose competition — and one who chose cooperation. Which one proved to be the empirical success, we can all see with our own eyes — and which the failure? Can you think of a simpler, neater way to test this greatest of social hypotheses than America and Europe over the last fifty years? The results of this unintended experiment are in. And this is what they say.
Unbridled competition does not yield prosperity. It sets off a vicious spiral of regress. Teaching people to be aggressive and hostile makes them selfish, and so they keep as much of what they make as they can for themselves. But that only starves everyone — including themselves — of what everyone needs most, and has best together — education, healthcare, retirement, and on. Competition becomes aggression and hostility become cruelty and selfishness — which eventually becomes poverty, and poverty breeds hate, violence, and ruin. That how America imploded.
Cooperation outcompetes competition, because it yields a virtuous circle of progress. We all invest together in precisely the things we all need most. Those things are then available for everyone, including us. We go on reinvesting in those things, year after year, and they get better and better.We retire younger. We live longer. We grow richer. We live happier. That is why European living standards skyrocketed — at the precise moment America’s were falling.
By the way, it’s not that Europeans don’t “sell stuff to the world” and innovate, by the way. Sure they do. France is the world’s epicenter of luxury, Italy sells the world fine food and furniture, Germany cars, and so on. But what Europe did that America didn’t was to invest the gains of all that trade in generous, expansive social systems made of public goods for all.
What good is it for a society to have a Zuck and Bezos? The only possible purpose is that their winnings should provide healthcare and education and retirement for all. After all, they have enjoyed the fruits of society and public goods all their lives long — whether roads, schools, rights, money, or simply even the alphabet. Billionaires don’t make themselves.
The only way that trade and commerce really benefit a society is if they are harnessed to and for social goals — if, when I make that better mousetrap, and earn a fortune, the largest share of it goes right back to society. Because society made making that mousetrap possible in the first place. Good luck running that corporation in a place where there are no roads, laws, armies, firemen, nurses, teachters, or doctors. Europe understood this intimately — hence, it’s ultra rich tend to be taxed at a far, far higher rate than America’s. Sure, by all means trade, says the European social contract. And you’ll get rich, if you do well — but not obscenely rich. Nobody should be as rich as a Jeff Bezos — because there’s no point. That surplus is better used to give healthcare or retirement to millions, instead of megayachts to dozens.
Let me add one final thing. Remember how I pointed out that America’s worship of “competition” made it a cruel and hostile place? That today Americans compete to crowdfund insulin and chemotherapy — horrifically? Cooperation had cultural and social effects in Europe, too. It made Europe gentle, loving, humane, sane, and above all, wise.
If you go to Paris, it’s full of lovers. Sorry if that’s a cliche, but it’s…true. Paris is a city of people at bistros laughing, crying, talking — loving one another. The happiest place I’ve ever been is the suburbs of Amsterdam — everyone’s just beaming. There’s a reason for European happiness, and that reason is cooperation. When everyone is your opponent, enemy, adversary, like in America — how can you really ever be happy? You just stay angry, anxious, afraid, ready to lash out, like Americans are — and maybe then you escape into Instagram and Facebook to numb all that pain. But if everyone’s just there for you to cooperate with — well, then you can really see them, you don’t have to fear them, there’s every reason to get to know them, to laugh with them, to walk beside them.
Let me come to the conclusion.
One of the greatest lessons of the last century — of all history is this: the secret to human prosperity. Cooperation outcompetes competition.It’s a paradox, in a funny way. But it’s also profoundly beautiful. Remarkably improbable. And also surprisingly sensible. That cooperation — people just holding one another up when they fall — turned out to be history’s great secret to human prosperity. All those millennia of war and violence? They never led anywhere because they were going the wrong way. And what America’s never really understood is that competition is just the end of all that: war, violence, domination, me over you, as the road to prosperity.
Cooperation didn’t just outcompete competition economically — but in every imaginable way, socially, culturally, politically. Europeans have largely kept their fascists and authoritarians at bay, they’re far happier societies, and life is a gentler thing, which is full of a rich, simple, beautiful joie de vivre.
Competition turned out to be the road to serfdom. Cooperation, instead, turned out to be the path to prosperity. Will America learn that lesson? Will the world? If it hasn’t yet, I don’t know that it ever will.
Umair May 2021 Eudaimonia and Co Eudaimonia & Co
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