The competition to see who can best cooperate with consumers

That’s a great way to view competition between businesses.

Credit David Henderson’s post on EconLog, where he is justifiably annoyed at the use of battle terms in a Wall Street Journal article to describe competition between two airlines for consumers flying to and from Seattle. Henderson thinks the author, and many like her, neglect the benefits to consumers when framing business competition as a battle.

Also, credit a commenter on his post, Julien Couvreur, for pointing to and summarizing a Don Boudreaux post about the same thing. Couvreur writes:

…economists tend to talk a lot about competition, but it is competition for cooperation (who can cooperate best with consumers). This is hardly war.

 

David and Goliath, not what I thought it was

Like many kids, I learned the story of David and Goliath as a parable to illustrate that underdogs can overcome seemingly insurmountable obstacles.

As an adult, going through a children’s bible with my kid, I saw it differently. It’s a story of how knowledge, skill and innovation can win out.

David had lots of experience taking out coyotes with a sling and stone. David should have won. He wasn’t the underdog. It’s just that everyone else on the battlefield was unaware of David’s skills and were locked into thinking of the traditional way of fighting.

My guess is that David never doubted that he could take out Goliath. But, he knew why. He had lots of trial and error practice to back himself up. The others didn’t know about it or hadn’t thought to apply his stone slinging skills to a 1v1 human battle.

But, I think the traditional telling of the story is dangerous. It gives the impression that David improvised in the moment and succeeded against the odds and encourages people to take stupid risks and hope they’ll just figure it out in the moment, like most Hollywood action plots.

What it should really teach is that practice makes perfect. Like many Hollywood stars will tell you, what appears to be their overnight success successes was years in the making, with thousands of rejections.

It also reminds me of something one of my navy pilot friends told me one time. Russian jets were designed to be superior for dogfights. The US military decided a better strategy was to knock out the enemy from 20 miles away to avoid the dogfights as much as possible.

Important Words

Don Boudreaux posts an important Quotation of the Day from Deirdre McCloskey (see Don’s post for full cite):

Unlike stealing or taxing or highhandedly appropriating, exchange is a positive – not a zero- or negative-sum game.  If Sir Botany must tempt the peasants with offers of educational services or consultation on interior decorating in order to get the barley, both he and the peasants are better off.  If he just grabs it, only he is better off and they are worse off.  If I buy low and sell high, I am doing both of the people with whom I deal a favor.  That’s three favors done – to the seller, the buyer, and me in the middle and no one hurt except by envy’s sting.  The seller and buyer didn’t have to enter the deal, and by their willingness they show they are made better off.  One can say it stronger.  Only such deals are just.

I was exposed to the idea of that voluntary trade is a win-win much too late in life. This is the foundation upon which we can credit our superb standard of living, but we all too often are taught to despise rather than celebrate it. We should despise, or at the very least, be more cautious of the unjust transactions.

Emergent order in sports

Spain discovered in the 2010 World Cup that a quick passing game was a successful strategy. Ever since, teams around the world have been adopting it. Like the crane maneuver in The Karate Kid, it seemed indefensible when executed properly.

Until today. Has the Netherlands figured out how to beat it?

The Netherlands put more people back on defense and sent long-balls toward the goal with incredible (maybe too incredible) bursts of speed from their strikers.

We shall see.

Good Advice from Seth Godin

From his post, It’s not about you.

Right in the front row, not four feet from Christian McBride, was every performer’s bête noire. I don’t know why she came to the Blue Note, maybe it was to make her date happy. But she was yawning, checking her watch, looking around the room, fiddling with this and that, doing everything except being engaged in the music.

McBride seemed to be too professional and too experienced to get brought down by her disrespect and disengagement. Here’s what he knew: It wasn’t about him, it wasn’t about the music, it wasn’t a response to what he was creating.

Haters gonna hate.

Shun the non-believers.

Do your work, your best work, the work that matters to you. For some people, you can say, “hey, it’s not for you.” That’s okay. If you try to delight the undelightable, you’ve made yourself miserable for no reason.

It’s sort of silly to make yourself miserable, but at least you ought to reserve it for times when you have a good reason.

Joe Machi offers a good perspective

I happened to catch a part of Last Comic Standing while Joe Machi was on. He offers a perspective that I have offered many times, but you just don’t hear enough. Start watching at 1:28 into the video.

It starts:

My married couple friends said, “Joe, we don’t want to bring a child into the world, the way the world is now.”  And I’m like, “What do you mean, the way the world is now? The best it’s ever been in history? Two hundred years ago, people were having 15 kids. Most of them would die. Most of your life was having kids, then watching them die. Then you would die…of something they prevent now by washing your hands.”

When people ask, “How are you doing?” I often reply, “Much better than my hunter-gatherer ancestors.”

Feedback Matters in Customer Service

This EconTalk podcast features a panel discussion on the future of work, featuring Andrew McAfee, Megan McArdle and Lee Ohanian.

Host, Russ Roberts, makes a good point about 29 minutes into the podcast. They are discussing how people differ from artificial intelligence. McArdle points out that there is value in charm. McAfee isn’t so sure. He says:

But think of your last 10 service interactions with another human being. How many of them left you with that warm, chamomile tea feeling?

McArdle say most of them. McAfee responds:

Oh, come on, did you walk through a sea of pleasant experiences in the airports on your way here? If so, I want to travel with you. [Or] When you call up Comcast, when you go–

Roberts points out that these are outliers:

You’ve picked the example of the places in America where there is very little competition due to regulation and government monopoly.

Good point. Not all customer service experiences are great, but certainly the ones from the companies that compete for your business are better than those that don’t. Everybody dreads going to the DMV. Most people are okay with heading to McDonald’s.