How competition keeps us poor
“Companies aren’t families. They’re battlefields in a civil war”
Charles Duhigg
The fact that groups are hiding information from each other comes at an extreme cost for everybody. We have seen this in the COVID-19 crisis where vaccines could have been made available quite easily for the entire world. But companies were sitting on their „intellectual property“ and selling their products for high prices to the highest bidder. The resulting global shortage on vaccines harmed everybody including the rich countries (because mutated virus variants developed in the unvaccinated parts of the world). This is the first way competition impoverishes us: limited availability of what could easily be available for everybody. We have invented perfect robots to produce t-shirts very fast and in a fully automatic way. But in many poor parts of the world people still have to sew t-shirts by hand. This often under dire conditions. The reason is that these people earn so extremely little that investing into a machine does not pay off. It’s cheaper to use humans as „machines“. The machine is expensive because of intellectual property and because few companies buy them (because they are expensive compared to human labor). This does not make any sense.
Furthermore the vaccine producers developed their products secretly without sharing research results which probably drastically increased the amount of time needed to develop them. Imagine that a software to solve a particular problem is required. What is faster: ten groups of ten people each working on a different version of the software or hundred people working on one version? Of course in the first case you can chose afterwards the best version of the software. But also the team of hundred has the possibility to let subgroups develop variants in parallel where this makes sense. Therefore in most cases the second team is much much faster (we assume that the project management is competent). This is the second way competition impoverishes us: extremely slow development speed for intellectual property (software, inventions, machine designs etc.). Many many software modules get developed in almost the same way every year by hundreds of companies. This is an enormous waste of human resources.
Often a software (or other IP) developed by a group (and kept secret) could be, in an adapted form, used by other people. Unfortunately in a competitive system this is not possible. This is why open source software is so infinitely more useful than proprietary software. In fact most commercial software is built on a huge stack of open source software (like for instance Linux, Apache, PHP, Libraries and Frameworks, etc.) and the code of the proprietary software has only a very small fraction of the volume of the open source code used.
The art of being successful with startups is to identify a business model, where you can gain a monopoly position in the market quickly. This is usually done by developing a very thin layer of software (or other IP) on top of millions of code lines of open source software or scientific results developed by universities. These monopolies are possible, because the biggest platform often offers the largest benefit for the users. Therefore if you are first you get the whole market share and it is later extremely difficult for competitors to reclaim a part of it. Then you can charge the users whatever price you like, because they don’t really have an alternative. It is obvious that these alleged „motors of innovation and future wealth“ do much more damage than good.
Because we are always scared that other groups could grow stronger than us, we deny them information which could be used by them to improve their living conditions. This information could be software, plans how to build machines, recipes, chemical formulas and processes etc.. It is easy to see that the poverty of the developing world could be easily avoided if the developed countries would share their intellectual property.
Information goods (like software or patents) last forever and can be copied infinitely. Why should only a few people have them? It simply makes no sense!
We have made huge improvements in economic productivity in the last decades. To be able to enjoy the wealth of 40 years ago, we would have to work only about 1 hour a day using todays technology. But this cannot happen: because of competition we are still forced to turn the hamster wheel many hours per day.
And last but not least: competition even puts our culture at risk. Soon all the music, books and movies ever made will be stored only on a few servers of streaming companies (like Amazon, Netflix and Spotify). If some terrorists blow up or hack these servers, a large part of our cultural heritage could be lost forever. The same is true for the important Excel source code which is probably also stored only on a few servers.
Compare this to an open source project or a mp3 file which is sometimes stored on tens of thousands of servers all over the world. It is almost impossible to destroy this kind of distributed information.