Economists often talk about the benefits of competition, with companies vying for buyers’ business and, as a byproduct, helping to keep production costs low. But to many, competition implies a winner and losers. N.C. State University economist Mike Walden discusses another term that might be more appropriate.
“And this is a very interesting question, and in his inaugural address the new president of the Southern Economic Association said that really there’s … a lot of negative connotation … to the term competition. It does imply a winner. For example, someone on the the football field (or) on the basketball court competing and winning and, of course, that means you might have a loser. And so I think by emphasizing that term in economics, I think some people may come away with the thought that, well, economics is a win-loss proposition. Someone’s going to win; someone’s going to lose.
“Most economists are going to say, though, that that’s not really true and perhaps a better term, instead of competition, would be cooperation, because when you think about it if you, for example, agree to work for a company you are really cooperating with that company. You have decided to give up some of your time for pay; you benefit by getting paid. The company gets a benefit by using your talents. Or, for example, if you and I go buy a new big-screen TV: Obviously, we benefit from getting that TV and the enjoyment that we get from it, and the company gets the benefit of getting the revenues and the profits from selling. And, again, that’s the cooperative nature: Both people win.
“So this may be something that economists should rather emphasize — rather than emphasizing the fact that companies are going head-to-head for consumers’ businesses and find there’s going to be some losers, think about the notion that really we’re cooperating in the economic environment. And really there is win-wins all around.”