Many people are worried about their social status and inequality. We live in what I call a culture of envy.

Matt Welsh, a software engineer who previously was a Harvard professor, wrote about the Fame trap last week, telling us that the pursuit of academic fame made him unhappy:

Once I had kids, I really started to appreciate the toll it was having on my family (…), and I started to realize that maybe I had my priorities all wrong. (…) I think chasing academic fame is not the best reason to go down that path. I wish I had known that when I was finishing my PhD.

The scholarly book of the year is probably Piketty’s Capital in the Twenty-First Century. This book has served as a rallying point for all of those who worry that managers are enriching themselves without bounds.

What is at stake in all cases, is that people insist on playing what Carse calls finite games. They may not realize that it is what they are doing… they may not even realize that they agreed to such games, but that is what they do nevertheless.

In finite games, there are winners and losers. The accumulation of wealth, the acquisition of a high social status… only make sense as games if there are winners or losers.

It is important to realize that this has nothing to do with absolute wealth and everything to do with envy. Let us put it clearly:

  • If you drive a luxury car, it is almost certainly to create the envy of those (like me) who drive a cheap Honda. Or to lessen the envy you feel with respect to those who drive luxury cars. Thorstein Veblen called it conspicuous consumption.
  • If you achieve fame, people will be envious of it. Your fame only makes sense if you have more of it than others, and if it is desired by others.

In a wealthy society, envy can quickly become the driving force. It is not about meeting your basic needs, but about achieving an envious position. In effect, you seek to be better off than most… in whatever finite game you are playing.

What is the alternative? Carse examines at length what he calls infinite games. You know that you are playing an infinite game when….

  • You are never playing against other people, against other teams. You are playing with others.
  • Rules can be reinvented…
  • The game may never end…
  • Players have no compelling reason to be envious of each other…

Though some people are stronger than others within finite games… there are no victories by which you can acquire power over others. In contrast, if you have just acquired $1 billion, or a tenured professorship at Harvard, you may not be interested in having these victories be forgotten. You may want society to keep on celebrating these victories, and for others to keep playing the game.

It is also very important to you, in the context of finite games, that victories feel earned. If you become a highly paid CEO by chance, you need to at least play the part of the genius… otherwise you are putting the entire game into question.

However, you cannot force others to play your finite games. Matt Welsh decided to drop out of the academic fame game. He had the tenured professorship at Harvard but he decided to play other games, elsewhere.

The same is true of money… you can buy a BMW and a big house to create envy in others… but these people can decide at any time that they are not players in this game. They may choose not to pursue the acquisition of luxury goods, and not to be envious of you.

I think that it is time that we pay less attention to people who take finite games seriously. I believe that it is the irony of a book like Piketty’s. You are most likely to be upset by financial inequalities if you take finite games seriously. So who is Piketty? He earned his PhD from the London School of Economics at 22. He went on to become a professor at MIT, and he ended up creating and leading his own prestigious school in Paris. If anyone takes finite games seriously, it is Piketty. The intellectual leader of Occupy Wall-Street, David Graeber, is similarly a competitive over-achiever… a professor at Yale University and now a professor at the London School of Economics. These are people who would not have taken “regular jobs”.

I believe that if there is one thing humanity needs to do to get through the next few centuries, is to reject envy and stop taking finite games seriously. It also happens to be a recipe to be happier on an individual basis. Take the regular jobs. Avoid conspicuous consumption. Be ok with just being a dad to your kids, as opposed to a famous star. Be ok if your kids grow up to be just regular happy folks that never win anything.

Next time you feel envious, please pay attention. And choose your games carefully.

54 Comments

  1. And here I thought I was the only person who ever read “Finite and Infinite Games”. I wonder if I still have a copy lying around, might be a good time to re-read.

    Comment by Bill Hooker — 11/8/2014 @ 11:15

  2. Ohhh man, you’re gonna be kidding me. What will happen to the economy if we stop keeping up with the Joneses?

    Comment by Leonid Boytsov — 11/8/2014 @ 11:40

  3. Some inequalities must obviously be taken seriously, as it’s true that some people must work two jobs to eat half-decently and live under a roof in western cities — to mention just that. However, I gather that your post points to inequalities that arise from a chosen perspective that actually-empowered folks may change, and I agree wholeheartedly.

    It’s super hard to shed and regrow culture, though, even merely one’s own! The little successes and hacks and tweaks towards self-reliance and simplicity bring great reward, but falling back into the restless, half-conscious cycle of self-aggrandizing ambition and consumption is pernicious and all too easy.

    Comment by Benoit Hamelin — 11/8/2014 @ 11:59

  4. @Benoit

    Poverty is not the same thing as inequality. There was very little economic inequality under the Soviet rule… but lots of people were poor in the sense that they ran out of food or had bad apartments.

    The people who went to Wall Street to protest were not poor. They had laptops, mobile phones with Internet access, plenty of food, even a library… Compared to most human beings having set foot on Earth, they were amazingly wealthy.

    Sure, there are poor people and it is a serious matter… but we actually spend very little time worrying about it… we tend to think about our own little universe and about how it is unfair that we are not winners according to some games we do not recall choosing to play… while we own fantastic computers, we have travel to foreign countries and so on.

    There is so much we can do if we just choose the right games.

    Comment by Daniel Lemire — 11/8/2014 @ 12:53

  5. Good post, and something many of us have thought about I’m sure, but here’s what I wonder about:

    What does scientific, academic, medical, etc., advancement look like without competition?

    Don’t the results of competition (to all competitors, even the “losers”) outdistance the results of cooperation, very often?

    I think envy itself is not bad, but what you choose to envy is important. Someone has more money than I do? Don’t care. Fame? Really, really don’t care.

    But someone knows more than I do (in a field I care about)? Yes, I want what that person has, very much.

    Comment by Mark — 11/8/2014 @ 13:15

  6. Is Carse’s notion of finite games related to that of zero-sum games?

    Comment by Kristjan Onu — 11/8/2014 @ 13:32

  7. @Mark

    Competition is not the same as emulation.

    For all the talk of science and engineering being a vast competition… I think you find competition in specific organized instances, many of them external to the primary activities.

    If you run a company and turn your employees into competitors, I think you risk ruining your company.

    Comment by Daniel Lemire — 11/8/2014 @ 14:04

  8. @Kristjan

    It is related, at least in my mind.

    Comment by Daniel Lemire — 11/8/2014 @ 14:05

  9. It is absolutely untrue that Soviet people were poor. Many people in, e.g., US are struggling much more than an average Soviet person despite having smartphones and cars.

    For instance, paying off your student loans all your life is not fun.

    Gadgets don’t make you rich. Gadgets are cheap. Even cars don’t make you rich. In fact, most people can live much happier lives without a daily commute in a smaller apartment (even Soviet-style).

    It is also quite outrageous to say that there are few poor people in the Western countries. And these numbers are growing. Inequality in North America is about access to education and decent jobs.

    Perhaps, before getting rid of envy we should give people jobs instead of locking them up in millions in prisons.

    Comment by Leonid Boytsov — 11/8/2014 @ 14:16

  10. http://www.salon.com/2013/12/10/ayn_rand_loving_ceo_destroys_his_empire_partner/

    Lampert took the myth that humans perform best when acting selfishly as gospel, pitting Sears company managers against each other in a kind of Lord of the Flies death match. This, he believed, would cause them to act rationally and boost performance.

    Comment by @sebpaquet — 11/8/2014 @ 14:31

  11. @Leonid

    1) Much of the poverty in the US is caused by wars… such as the war on drugs. Wars are very much a feature of finite-game approaches.

    2) “Inequality in North America is about access to education and decent jobs.”

    I think you mean high status jobs like engineering, management and so on.

    It is really not hard to become an IT guy or a trucker in North America.

    3) Under Soviet rule, Germans were doing so well that they had to put a wall to prevent people from leaving. Despite having no population growth, East Germany had nearly 1 million families waiting for an apartment… and many who did have apartments did not have a bathroom. Food was often of poor quality. Pollution was often excessive. People were willing to risk their lifes to get out.

    Comment by Daniel Lemire — 11/8/2014 @ 15:48

  12. @sebpaquet

    Right, some competition can be fun, and maybe stimulating, but it is a myth that we need widespread competition to make things work.

    I do not think that it is the feature of capitalism that makes it work. You can certainly succeed in business without having to worry that people are out to get you…

    And frankly, people are not out to get you when you are in a market. There is more cooperation than competition. You do not really want others to lose their shop.

    Comment by Daniel Lemire — 11/8/2014 @ 15:56

  13. I am glad @Daniel that you mentioned trucking. This is such a nice job: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/28/trucking-used-to-be-a-ticket-to-the-middle-class-now-its-just-another-low-wage-job/
    Besides, how soon will self-driving car eliminate this one? It is only a matter of, perhaps, a couple of decades.

    Regarding an ease of becoming an IT guy, you’re sure joking. Let’s begin with the fact that there are only a handful of IT jobs. And, then, not everyone can be an IT guy.

    People, who are not IT often have to work looooong hours to keep their jobs. Even well-educated people. Not everybody has stability like a tenured professor. Jobs are diminishing and this is only getting worse.

    But, of course, our main problem is envy. Let’s solve this one.

    Comment by Leonid Boytsov — 11/8/2014 @ 16:02

  14. And IT jobs are such a joke as well. Nobody knows why exactly people can still have them instead of the guy in India and China. This may not be forever, either.

    Comment by Leonid Boytsov — 11/8/2014 @ 16:05

  15. Senior bay area engineer tell everybody else not to play finite games,
    irony==lost

    Comment by Simon — 11/8/2014 @ 17:03

  16. @Leonid

    Truckers in North America are not poor. It is a hard but decent job.

    Comment by Daniel Lemire — 11/8/2014 @ 17:08

  17. @Daniel, the point is that their salaries are going down and will disappear soon. As well as other blue collar jobs.

    At the same time, accumulation of wealth in hands of few gives them way too much power. In particular, we have wars because of this.

    It is not a bit healthy envy and competitiveness that is harmful. It is the *SUPERGREED* that is disastrous. And too much inequality is caused by the supegreed as well. You are pretty much attacking the wrong target.

    Comment by Leonid Boytsov — 11/8/2014 @ 17:16

  18. I’m currently pursuing a PhD degree. My motivation to do this took a large hit once I started thinking about my motives and realized that I was doing it essentially because I wanted to do better than others in “the intellectual game”. I wanted the prestige that having a PhD brings me over other people.

    I think I’m too far into my studies to quit the program now, but I’m pretty sure I will not be continuing in academia because, frankly, I’m now appalled by “the game”. I think I will just find a part time job teaching or something and try to maximize the time I spend on my hobbies and with other people.

    Comment by Anonymous — 12/8/2014 @ 2:11

  19. This post really piqued my interest, and I thought I’d say why, even thought it’s a bit tangential.

    Quite some time ago I worked on an abstract (highly idealised) model for specifying interfaces between a server and its client(s), according to which their interaction amounted to playing an infinite game.

    The server wins, as it were “at the end of time”, if it never gets into a situation in which the client can make a request to which it has no response. Should that happen, the server loses, and the client wins. The client is not really concerned to win. The game is collaborative: ideally, there are no winners and no losers — until “the end of time”, which is no time at all. The basic idea is of course not original to me, and anyone who knows a little about temporal logic will recognise it as little more than a banality.

    Sometimes my friends, or people I met socially would ask me what sort of thing it was I was working on, and I’d say something like the above: a notion of game in which no-one ever loses, unless something goes badly wrong. It astonished me that quite often I ran into outright hostility to the very notion of such a game, as if I were some kind of befuddled hippy.

    Comment by Peter Hancock — 12/8/2014 @ 5:06

  20. I think the bible has one of the earliest and most cogent quotes that is perhaps the most misquoted:

    “for the LOVE of money is the root of all kinds of evil.”
    Timothy 6:10.

    I agree with all the posters who quibble about poverty and US vs USSR – and assert that the OP is still valid – if _particularly_ those at the top stopped playing finite games, poverty itself would be eliminated, but reality is we _all_ have to stop playing them for it to be reality. In other words – everything we need to know we learned in kindergarten (share…).

    Comment by Dominic Amann — 12/8/2014 @ 7:34

  21. One of the best games of all time is Dungeons & Dragons (played by some of the best known Authors and actors, such as China Mieville and Vin Diesel) has no winners, just endless co-operation and moving goals.

    Comment by Dominic Amann — 12/8/2014 @ 8:45

  22. It’s not only that a minimum wage worker has envy of a larger apartment and a car. I agree: if they have a roof and food and family and perhaps access to a library, they’ve got plenty for a fulfilling life.

    What they lack is any guarantee the food and roof will still be there tomorrow. That a minimum wage job feeds you today is no guarantee that a bad growing season won’t change that. Or that a health condition won’t strike that you won’t be able to afford. That’s a stressful existence. I try to avoid the bottom rungs of society not because I want people to envy me, but because when times get rough, they suffer most.

    If a PhD is driven to be recognized as top of his field, if the unit of envy is a citation, to me that’s a very positive thing. The professor pushes forward human knowledge, and gets paid in as cheap a currency as respect.

    It’s when unit of the game is money that things get problematic, because that’s also the unit of basic survival, of political power, of economic disruption. When the unit is conspicuous consumption, we waste for no real benefit.

    So I really don’t see the envy game being disbanded, but I’d love to see it moved away from money to intangibles: titles and symbols and recognition to keep the game churning without dictating so completely economic direction.

    Comment by Paul — 12/8/2014 @ 10:22

  23. @Paul

    In finite games, you win a title. This title gives you power. It does not matter if the title is money or a medal. However, it matters that this prize makes you powerful. It is the whole point.

    I’d love to see it moved away from money to intangibles: titles and symbols (…)

    But that is precisely what money is. It is a title. It grants you power.

    It is not like money is a tangible good, like food or lodging. I have $132 in my bank account. I can prove it to you by printing out a piece of paper from an ATM. But it is not really tangible… it is symbol of my relative power. But if you decide that you are not interested in money, then it becomes meaningless. I can only hold power over you with my money because you choose to recognize it. Money is a convention.

    Of course, we can generate more money. A lot more. And it would cost us nothing. Except that it would reduce the value of money… But that is like saying that if we gave 3 gold medals instead of just one… we would devalue gold medals.

    It is all about symbols. We have to keep them scarce to keep their value.

    Bill Gates has lots of money. This grants him power. But how exactly? Because we choose to recognize it. If tomorrow, we all agreed that money had no power, that we did not accept it… if we simply decided to stop recognizing all titles… Bill Gates would be just as powerless as you and me.

    These things do happen. They happened during the revolution in Russia. The rich lost all their power.

    Bill Gates holds titles, including money. We choose to recognize this (as part of a game) as giving him power.

    In this sense, no amount of money could ever ensure your future. You need for people to keep on recognizing your titles. That is what society does. It forces us to recognize past winners.

    Comment by Daniel Lemire — 12/8/2014 @ 10:42

  24. It’s not the fact that cash is intangible, it’s the fact that it’s transferable.

    Peter Higgs has a Nobel medal and a particle named after him. This grants him particular powers: people will recognize his name, will be more eager to work with him, will give him seats of honor and speaking opportunities and all the rest. He gets a louder voice in dictating future research directions.

    People will not trade him mansions for the medal. Politicians will not write laws at his desire in return for the Higgs Boson being renamed the John Smith Boson.

    If tomorrow we decide that actually, Peter Higgs’ work was rubbish, the power goes away.

    This is very different from having to seize all the assets of a disgraced CEO or outright abolish the dollar.

    The envy game is about power, but there’s huge leeway in what sorts of power. I think a lot of people playing it just want recognition. If people murmur when they enter a room, if they get seated quickly to the best seats in a restaurant, if they go through the VIP door in a club: that’s success.

    With money, they’re instead granted extremely broad power. Bill Gates was a smart man and a successful CEO. We reward that by making him perhaps the single most influential individual in choosing the future of education in this country and the direction our charity travels. If instead he wanted to amass a gigantic fleet of boats, or turn swathes of farmland into wilderness reserves, or influence who becomes the president of the United States, that would be in his purview as well. If he decides any arbitrary individual should have power, he can give it to them.

    There’s a gigantic gap between the status quo and abolishing money, between the envy game as it stands and an idealized contentment game.

    Comment by Paul — 12/8/2014 @ 11:06

  25. @Paul

    I think that your real concern is that you believe that a scientific prize is dutifully earned whereas the salary of a CEO is not genuinely earned.

    So you do not recognize the CEO as a real winner… And that is a real problem for society as it leads people to question the games themselves.

    With money, they’re instead granted extremely broad power.

    Your point seems to be that fungible titles (e.g., currency, gold, credit) grant broader powers than non-fungible titles in general.

    If you think back about the last century or so… who are the men who used their broad power to cause the greatest harm… Please, show me your top-10 list. If many of them derived their power primarily from fungible titles (money, credit, gold) as opposed to non-fungible titles (president, prime minister, absolute ruler, CEO), we need to have a chat about history.

    Comment by Daniel Lemire — 12/8/2014 @ 12:10

  26. Nope, I absolutely recognize that CEO’s are often smart, hard working and contributing positively to society.

    I also agree that political power is usually larger than just monetary power. Granting political power for a job well done is definitely a step backwards towards feudalism.

    To be succinct, this is my point: you posit that envy drives a lot of economic actors, and I agree. But I think that’s a good thing, that a CEO might be miserable putting in 70 hour weeks, but if he makes the company more efficient as an outcome that’s a social positive. I’m fine with his vanity if it helps society.

    So my concern isn’t that people want power, it’s that I think we’re giving them more power than is strictly needed to get them to be productive. I use researchers as an example because they work 70 hour weeks too, not to become a billionaire but for a little wealth and a lot of respect/recognition.

    I hypothesize that if CEO were like that: say, $200K a year, but a chance at the “business hall of fame” and your face on magazines and say, automatic upgrades to first class on airplanes, people would still flock to the position to be the envied one. So by paying them tens of millions, which grants a lot of power in a lot of fields, we’re making a poor investment, because we could have gotten that effort out of them cheaper.

    Comment by Paul — 12/8/2014 @ 12:38

  27. Also: I don’t think there’s anything wrong with power differentials. It’s extremely hard to have a system without them. A Nobel prize winner gains extra power over hiring and research direction in his field. Ok, but he demonstrated expertise in this field. Somebody has to have that power, why not him?

    Same with the CEO: tons of power directing the company. Ok, that’s the job, he earned the position somehow, somebody has to do that.

    Contrast with money/political power which are powers that can be used in almost any field. Obviously there’s tons of examples of Nobel Prize winners going on to promote bad research. But it’s not unreasonable to think they’ll be at least no worse than a researcher chosen at random. The real danger is power misused, so to the extent that power is given for some degree of demonstrated good stewardship over this flavor of power, the power granted isn’t particularly a social cost (the way abused power is)

    Comment by Paul — 12/8/2014 @ 12:45

  28. @Paul

    Since we demonize highly paid CEOs right now, by the counterpart of your logic, we end up having to pay them more, no?

    So we should celebrate them, instead.

    As for your last comment, you did not follow up on my comment regarding who are the worst power abusers. I think you will find that most of them held non-fungible titles. People merely using money rarely end up being responsible for millions of deaths. There is only so much harm Bill Gates can be held responsible for.

    Comment by Daniel Lemire — 12/8/2014 @ 13:04

  29. @Daniel, it would have been all fine, if we didn’t know that the worst power abusers are likely not acting on their own. It’s big money that controls them.

    Comment by Leonid Boytsov — 12/8/2014 @ 13:11

  30. @Leonid

    The worst power abuser I can think of is Hitler.

    He was a socialist demonizing big money. He blamed bankers for the economic hardship of the average German.

    Mao, Lenin, Stalin also come in mind.

    Who are the evil big-money people you have to oppose to Hitler, Mao, Lenin and Stalin?

    Please give me names… Bill Gates, Steve Jobs… the Koch brothers… the Walton…?

    Who would rather have against you… the Walton family or Mao?

    Comment by Daniel Lemire — 12/8/2014 @ 13:24

  31. In fact, @Daniel, there is an opinion that capitalists helped Hitler greatly. But, of course, we will never know the truth and this opinion was, of course, challenged by.

    Anyways, tyrannies are a bit of a different story. Democracies are likely to be different, so it is unfair to compare against.

    In fact, all the political and socialistic theories are just a lot of handewaving. You handwave towards more inequality and handwave against it. That’s it. There is no way to prove who’s right.

    Comment by Leonid Boytsov — 12/8/2014 @ 13:40

  32. @Daniel

    I addressed it in my comment “I also agree that political power is usually larger than just monetary power. Granting political power for a job well done is definitely a step backwards towards feudalism.”

    It looks like your list is autocratic leaders (also the four names that came to my mind). I’m definitely not advocating that instead of paying the elite a lot of cash we grant them free control over the populace. Was Mao so bad because he held the title of chairman? Or because the post of chairman granted control over a powerful political apparatus (or perhaps more accurately that he already had the political power from creating the government)?

    autocratic power is more dangerous than monetary power is more dangerous than localized power is more dangerous than symbolic power.

    So wherever possible we should be looking to meet people’s needs for feeling powerful as low on that list as possible.

    Comment by Paul — 12/8/2014 @ 13:55

  33. @Leonid

    You made a specific statement:

    it would have been all fine, if we didn’t know that the worst power abusers are likely not acting on their own. It’s big money that controls them.

    So, who are these power abusers and what evidence do we have that it is “big money” driving them?

    Here are the top 3 wealthiest people in the US right now according to Forbes: Bill Gates, Warren Buffett, Larry Ellison.

    I will grant you that Microsoft and Oracle can be considered evil… in some twisted sense… But how many atrocities, wars and evil political plots do you honestly think you could trace back to these people?

    Larry Ellison is a jerk. No question about it. But how many wars do you think he started?

    The richest companies? Microsoft… Google… Apple… How many evil plots do these companies have to hide…?

    I mean, if these are the people we have to fear… life is pretty good.

    Comment by Daniel Lemire — 12/8/2014 @ 14:16

  34. @Daniel, let me remind of the recent salary scandal. The judge even refused to seal a settlement.

    I have to agree with you that Bill Gates probably won’t start a war. Despite these companies are some of the richest (http://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2014), what is the percentage of the GDP they are responsible for?

    There are, e.g., oil companies, military lobby, infamous food industry and so on so forth…

    Comment by Leonid Boytsov — 12/8/2014 @ 15:03

  35. @Leonid

    Yes, so software engineers (who typically make 6-figure salaries) in California claim that they made less than they could have because Steve Jobs effectively pushed a non-compete clause on software engineers.

    Non-compete clauses are legal in Canada and many other countries, and even within the USA. They are not in California however.

    It was clearly illegal, in California. But is it even immoral? How could it be when it would be legal elsewhere?

    Comment by Daniel Lemire — 12/8/2014 @ 15:35

  36. Morality is always arguable. Legality is more fixed (but still arguable). Effectiveness can be determined in practice or by economic theory.

    Non compete clauses may lower the salary of workers in the Country, and make the entire country less attractive as a place for those specialists. Canadians, Australians, Brits may all be naturals for emmigrating of they see enough benefit, but it would have to be significant moneywise. If salaries have been depressed, then the pool of potential experts can be diminished.

    Comment by Dominic Amann — 12/8/2014 @ 15:52

  37. Hmmm… let me ask it the other way? Can legal things be immoral and unfair?

    Comment by Leonid Boytsov — 12/8/2014 @ 16:01

  38. And, please, let’s not distract ourselves with six digit salaries of California SDs (houses, BTW, are close to seven digits there). Don’t forget that we defend 8 digit salaries of CEOs.

    Comment by Leonid Boytsov — 12/8/2014 @ 16:03

  39. You have put on words things I felt and have observed for quite a long time. Great post! Hope people read it and get inspired.

    Comment by Renata — 12/8/2014 @ 18:22

  40. @Leonid

    Senior executives are routinely the subject of non-compete clauses everywhere in the world. It is not just programmers in California. Even hairdressers often have to sign similar agreements.

    There are implicit non-compete clauses in academia. Many of them. For example, we never take away someone’s grad student or post-doc, by outbidding our colleague. It is simply not done.

    Even professors are the subject of these non-compete clauses… Most universities have policies to discourage their departments from recruiting tenured professors from other schools. Though it does happen, it meant to be exceptional… Just like Steve Jobs wanted it to be exceptional that an Apple engineer would become a Google engineer.

    I do not quite have an opinion on whether it is good or bad… but it is absolutely true that non-compete clauses are widespread.

    I am happy for the programmers in California. Good for them if they can get more money!!! But they are hardly victims here.

    At a minimum, I can absolutely understand why it is bad form for Google recruiters to call up Apple engineers. From Apple’s point of view, it is an aggressive manoeuvre. It is hostile. As I have written above, I do not think capitalism is all about competition. Apple and Google are not out to kill each other. They prefer to be friendly and cooperate when possible. And it makes plenty of sense.

    Comment by Daniel Lemire — 13/8/2014 @ 8:35

  41. You should, perhaps, allow universities to compete for postdocs. It would not have been such a miserable job otherwise.

    Comment by Leonid Boytsov — 13/8/2014 @ 11:43

  42. @Leonid

    If you somehow managed to raise the salaries of the top-postdocs, they would be better off. However, since the funding sources are likely not elastic, you would have fewer positions available… so some people would have nothing instead of a postdoc.

    It could even lead to redirection of funding from postdocs to graduate students, attracting more graduate student, and leading to many more unemployed PhDs.

    I am not saying that any of this would happen, but it is not straightforward that, for example, all software engineers in California would have been better off without the non-compete agreements. The star players would have earned high salaries… but it is also possible that there would have been fewer jobs… more unemployment.

    Comment by Daniel Lemire — 13/8/2014 @ 12:12

  43. In a crony capitalism, @Daniel, (or should I say friendly?) there is less of everything for simple people. Does this create a culture of envy? Perhaps, but we should all keep fingers crossed so that it won’t create a culture of rage.

    Comment by Leonid Boytsov — 13/8/2014 @ 12:48

  44. It is interesting that although universities have these cosy agreements about post-docs, the pay for CEOs at universities has seen no such constraint. University president salaries are now upwards of 1/2 million and climbing, with additional benefits. This is “yet another” system that is a victim of envy.

    Comment by Dominic Amann — 13/8/2014 @ 13:46

  45. @Dominic

    At the University of Quebec, where I work, university presidents earn much less than 1/2 million. We also offer low fees, and our programs are typically open to all.

    But students often prefer to attend more prestigious schools. In fact, the government has to forcefully keep tuition fees low at McGill otherwise they could charge many times what they are charging now, and students would still flock there.

    People are attracted to prestige and high social status like moths. So it is a wise investment to hire the most prestigious president you can find.

    Comment by Daniel Lemire — 13/8/2014 @ 14:05

  46. Excellent observations. But you can’t stop taking finite games seriously while choosing your games however carefully you do so.

    Competitive and rewarding societies fare much better overall than conformant ones. Mark points out that advancement comes from competition, but it is perhaps a bit more complex — coopetition among individuals is perhaps a more appropriate reason for rapid advancements (ref: game theory).

    Envy and jealousy are ubiquitous products of human psychology regardless of political beliefs. From the perspective of positive psychology, and while this can be hard to do for most people, it is replacing *envy* with *admiration* in ones mind that makes a difference.

    Comment by Atul Mehta — 14/8/2014 @ 10:19

  47. @Simon

    Matt Welsh was a tenured computer science professor at Harvard. He took a job as a senior software engineer.

    Where do you see irony in that?

    Comment by Daniel Lemire — 14/8/2014 @ 10:40

  48. @Atul

    Envy is certainly a natural emotion, but I think our societies cultivate it to a degree that is unhealthy. It is destructive.

    Competitive and rewarding societies fare much better overall than conformant ones.

    Again, I do not believe that competition is the key feature that makes capitalism work.

    I do not believe that competition is what makes science work. In fact, whenever you read of stories about intense competition in science, it is often quite destructive. Newton wasted 14 years, by his own account.

    Sure, a little bit of competition can be fun and productive. But if competition is your default model, then things are probably not going well.

    Sure, athletes will compete fiercely… for an hour or so… but then, they will gladly take a beer together and exchange tips. Those who cannot do anything but compete are called jerks…

    In the savanna, our ancestors surely competed a little… who can find the best prey?… but what made them so fierce was cooperation. It was their default model. Most times, human beings did not fight each other. They either avoided each other, or collaborated.

    War is very much a product of civilization.

    Comment by Daniel Lemire — 14/8/2014 @ 10:51

  49. “Take the regular jobs. Avoid conspicuous consumption.”
    But how many of the former will be left if we all choose to opt for the latter?

    Industrial workethics form the moral basis for the envy you wish to dispose of.

    Let’s all just stop working in the jobsystem we know, it’s designed to be exploitative and goes hand in hand with the conspicuous consumption.

    Comment by rijkswaanvijand — 18/8/2014 @ 3:20

  50. @Daniel – regarding post 30

    I recently read “The Great Big Book of Horrible Things,” by Matthew White.

    In terms of people directly killed by the government (as opposed to indirectly, by war or famine), the four who killed the most were Hitler, Stalin, Mao, and Leopold II.

    Who’s that last one?

    (Hitler, incidentally, was not a socialist; the socialists were among the first people he targeted in Germany. He didn’t have much of a problem with ethnically German bankers; when he railed against “bankers,” he was using it as a code word for “Jews.”)

    Leopold II was king of Belgium, but he wasn’t killing Belgians. As White points out, hereditary rulers generally aren’t among the really big killers. Leopold II was an exception: his high death toll came in the Congo Free State, and it was a result of a company where he was the CEO.

    You also have the British East India Company, which killed millions through famines. White noted there was one time in the 1870s where a famine death toll was held to just 23 people, due to relief on the part of government. However, such relief was held to be a violation of free market principles. In some cases, the rulers of British India, including the East India Company at one point, made famine relief illegal because it would cut into the profits of private business! Let’s not forget about how the company’s drug-smuggling operations led to the Opium Wars, either.

    The actions of United Fruit in Central America, while not creating the 300,000 dead necessary for inclusion in White’s list of the 100 worst atrocities in history, were not exactly good for the general population.

    Comment by Sam — 18/8/2014 @ 11:58

  51. @Sam

    Hitler and many of his followers were staunchly anti-capitalist and socialist.

    Citing wikipedia:

    As a Nazi, Hitler had expressed opposition to capitalism, having regarded capitalism as having Jewish origins. He accused capitalism of holding nations ransom in the interests of a parasitic cosmopolitan rentier class.

    If you read some Nazi propaganda, it does sound strangely similar to the socialist leaders today, except for the racist part. It is complete with the bankers stealing everything from the disappearing middle class.

    The reason they fought the communist is that they did not believe the state should make people equal. They believed that different people deserved different fates, no doubt based on their race and perceived merit.

    Comment by Daniel Lemire — 20/8/2014 @ 15:59

  52. @Sam

    Just so we are clear, the British East India Company is not an example of capitalism but of colonialism. It has little to do with Apple or Google.

    Comment by Daniel Lemire — 20/8/2014 @ 16:10

  53. This is a great post, Daniel. And you answer the objections very well.

    Comment by Peter Turney — 23/8/2014 @ 7:53

  54. @Turney

    I have edited my post to grant you some credit for pointing out Carse to me.

    Comment by Daniel Lemire — 25/8/2014 @ 9:02

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