In an excerpt from the splendid PovertyCure series, Michael Fairbanks offers a helpful bit on why our attitudes about competition matter for economic development:
I can predict the future of a developing nation better than any IMF team of economists by asking one question: “Do you believe in competition?” When I go to Venezuela and I say, “do you believe in competition?,” they say “competition means the rich get richer and the poor get poorer.” They say “competition is the unnecessary duplication of effort because you have two firms doing the same thing.” They say “competition is a quaint North American concept that doesn’t apply here.”
But when I go to Silicon Valley and I say,“What do you think about the word competition?,” they say, “Well, I love competition, because even when I lose, I learn something. And my success is due to the fact that I speeded up my failures, and the only way to fail was to compete, and figure out where I wasn’t good enough.”
As Hayek put it, competition is a discovery procedure. If we neglect, distort, or downplay that process, we can expect the outcomes of discovery — the fruits of our sacrifice and service — to digress accordingly.