We often hear pundits, scholars, and friends arguing about the merits of competition in the context of economics. Introducing competition to a moribund industry characterized by monopoly, as occurred when UPS and FedEx were finally able to challenge the US Postal Service (a truly damaging monopoly) for the delivery of packages, induces all competitors to improve their offerings because, in general, they have to battle on quality and price to find patrons. All else equal, this is what we would expect in any activity, leading to more choice, better service, and greater happiness. And this is what we tend to find.
But, arguably, the blessings of competition are even more pronounced in the arts. In 2008, I described the effects of competition on two great bands of the 1960s in “The Fortune of Coldplay“:
The Beatles and Beach Boys engaged in an “arms race” of sorts that propelled both bands to dizzying unforeseen heights of artistic expression. The story is worth recounting, briefly: Paul McCartney and Brian Wilson, two of the virtuosos behind their respective bands, forced each other to get better with each album. They influenced each other, beginning with The Beatles’ Rubber Soul driving the Beach Boys (read: Brian Wilson, the only one of them worth a creative damn) to produce Pet Sounds, which Paul McCartney to this day calls the best album ever and moves him to tears with its melodies. In turn, McCartney went to the drawing board with John Lennon and they came out with Sgt. Pepper’s Lonely Hearts Club Band, which is often called their best album. According to some, this album broke Brian Wilson, whose prodigy was unleashed by the album but also broken by it. Wilson had, like perhaps Fermat grasping his Last Theorem or Nash contemplating Game Theory, become possessed by the art of the possible in his field. [Yet] the fulminations of other Beach Boy members condemned Wilson’s potential magnum opus, SMiLE, to death. When Wilson recovered [from his breakdown], he produced SMiLE as he thought it would have been. The result is unlike anything else that came from the 60s, or perhaps unlike anything that has ever been made.
I had argued in the post that it may not be possible to not have an “arms race” like that again, pitting extraordinary talent against extraordinary talent, producing ever more outstanding works, and satisfying consumers (in this case, of music) better than they could have dreamed. I was strictly mistaken. This could only occur in a market with a set of tastes that are perfectly and permanently satisfied. Rather, the example of The Beatles and the Beach Boys shows the benefits of competition for us. Similarly, in my recent post on Coorte, I showed that he received a fine for selling art work in a market without being a member of the artist guild. Yet consumers all benefited from his doing so, for they received excellent art works. Allowing artists like Coorte into the market without prior approval ensures that other artists must create works that compete with Coorte’s genius. This is why artists (and workers) form guilds (and unions) that insulate themselves from becoming better.
There is no other reason.
But when they become better, and improve themselves through the crucible of competition, we can build on those achievements. There’s another example of this in an “art” of sorts: chess. The 20th century saw many advances in the art of chess, including those made by Tal, Capablanca, Alekhine, Lasker, Botvinnik, Fischer, Karpov, and Kasparov. The 1970s through the 1990s was the era of Fischer, Karpov, and Kasparov. Fischer is best known as the American who broke Soviet dominance of world chess. But in the chess world itself, his nationality isn’t very important. His contributions to opening theory and endgames are. Chess masters continuously study and study and study previous games. It gives them a sense of the probabilities of how games will play out, but it also means they are storehouses of information regarding the games and artists who came before them. According to Fischer’s wikipedia:
Some leading players and some of his biographers rank him as the greatest player who ever lived. Many other writers say that he is arguably the greatest player ever, without reaching a definitive conclusion. Leonard Barden wrote, “Most experts place him the second or third best ever, behind Kasparov but probably ahead of Karpov.” [...] According to the Chessmetrics calculation, Fischer’s peak rating was 2895 in October 1971. His one-year peak average was 2881, in 1971, and this is the highest of all time. His three-year peak average was 2867, from January 1971 to December 1973—the second highest ever, just behind Garry Kasparov. [...] Fischer’s great rival Mikhail Tal praised him as “the greatest genius to have descended from the chess heavens.” [...] Kasparov wrote that Fischer “became the detonator of an avalanche of new chess ideas, a revolutionary whose revolution is still in progress.” In January 2009, reigning world champion Viswanathan Anand described Fischer as “the greatest chess player who ever lived…”
Yes, it is possible that his capabilities have been exaggerated by his iconic status in the media, but when so many legends and peers believe he was the best, one must concede the possibility. The media would be less likely to distort their evaluations. It is now worth considering Anatoly Karpov, still ranked the 98th best player in the world, who was a dominating world champion for many years before the era of Kasparov. Unlike most masters, he did not have just one peak of greatness. He was world champion from 1975-85, when Kasparov began his stifling dominance of chess. Yet, Karpov retained much of his ability for the following decade, despite not surpassing Kasparov or Nigel Short. Still, Karpov’s greatest performance was in a 1994 chess tournament:
The field, in eventual finishing order, was Karpov, Kasparov, Shirov, Bareev, Kramnik, Lautier, Anand, Kamsky, Topalov, Ivanchuk, Gelfand, Illescas, Judit Polgar, and Beliavsky; with an average Elo rating of 2685, the highest ever at that time, making it the first Category XVIII tournament ever held. Impressed by the strength of the tournament, Kasparov had said several days before the tournament that the winner could rightly be called the world champion of tournaments. Perhaps spurred on by this comment, Karpov played the best tournament of his life. He was undefeated and earned 11 points out of 13 possible (the best world-class tournament winning percentage since Alekhine won San Remo in 1930), finishing 2.5 points ahead of second-place Kasparov and Shirov. Many of his wins were spectacular (in particular, his win over Topalov is considered possibly the finest of his career). This performance against the best players in the world put his Elo rating tournament performance at 2985, the highest performance rating of any player in history.
In this era of Fischer, Kasparov, and Karpov, it is worth considering what a tournament between all of them at their peaks might have been like. It is something Karpov has considered, since he would have played Fischer for the World Championship had Fischer not declined to defend his title. And although considered one of the all-time greats with his positional brilliance, always ready to take advantage of the most minor mistakes, he is not considered greater than Kasparov or Fischer. According to Karpov’s wikipedia:
Karpov is on record saying that had he had the opportunity to fight Fischer for the crown in his twenties, he (Karpov) could have been a much better player as a result (in a similar way as Kasparov’s constant rivalry with him helped Kasparov to achieve his full potential).
This is probably true. On the other hand, Karpov’s place in history may be unchanged, for his own improvement may have spurred even greater improvement in Kasparov as well. Whatever the case, it cannot be said that less competition is better for fostering the brilliance of artists anywhere in any situation.
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September 27, 2009 at 3:06 pm
Spoonful
In the perfect world of economics textbooks and theory, we wouldn’t need unions. But in the real world, they do serve a purpose, and can improve the quality of an artistic product or a manufactured product.
In general, what is wrong with workers/artists joining together for a common purpose? Why are shareholders allowed to join together, pool their money, invest it in something they all think is worthy, in the hopes of increasing everyone’s wealth; but workers aren’t can’t pool their talents, negotiate with some entity in the hopes of increasing everyone’s wealth and quality of life (as long as membership is voluntary).
The world of recorded music has changed a lot since the 60s and has become more like the perfect marketplace of economics textbooks, and I don’t think that unions would serve a helpful purpose anymore. Myspace and blogs mean any artist can put out whatever product they like and anyone can listen to it. But in the 60s artists were up against the recording industry/radio station conglomerate, with no real negotiating power (especially up and coming musicians), and artistic expression was stifled. You couldn’t release a song over 2 minutes and 50 seconds in the 60’s if you wanted a chance of radio airplay! One of the contributing factors to the collapse of SMiLE in the 60s was the pressure from Capitol Records to finish it in time for a Christmas release!
And what about workers? Some people work in industries where their personal safety is at risk every time they are on the job. How does a company put a price on someone’s life? They can’t. There is no way to put a price on the loss of a father, husband, tee ball coach, etc, etc. The workers themselves should have a say in their safety, and in the REAL world, unions have improved safety conditions and decreased injuries and deaths on the job.
September 27, 2009 at 8:19 pm
Admiral
Thanks for your comment, Spoonful. I will proceed point by point.
1. “The perfect world of economics textbooks.” This is an important misconception primarily on the part of those who sympathize with the left, but is also found on the right as well. Not even the worst Microeconomics textbook contains paeans to some perfect world that exists if only we would use nothing but free markets. Rather, books such as Parkin’s Microeconomics book, which I used to teach economics at UF, show different kinds of market structures and the variables that affect them. Without government involvement, markets may range from the ideal “perfect competition” structure through “monopolistic competition,” “oligopoly,” and “monopoly.” Even when a market is in so-called perfect competition (the products for which are all perfect substitutes for each other, there are no barriers to entry, etc.), there is no assumption that it can go like that forever. In any event, we all understand that this is just one extreme side of the spectrum and that the vast majority of markets don’t come close to this. On the other hand, every microeconomics textbook gives one the tools to explain why unions exist: self-interest.
2. “Unions can improve the quality of an artistic product or manufactured product.” Although possible, these instances are few and far between. And when they do occur, we expect these improvements to be short-lived, occurring despite union existence, not *because* of union existence. It is worth noting you do not actually refute my arguments, re: Coorte and others.
3. “What is wrong with workers uniting if shareholders can unite?” Nothing, though these issues are not related beyond the constitutional rights to assembly and contract (largely abrogated). Shareholders voluntarily unite and have a contractual relationship with each other. Remember: shareholders pool the resources from which the corporation is formed and therefore own it, having asked nothing from government. Unfortunately, this is not the case with workers. Workers may unite, of course, and there should be no law against the forming of unions. But shareholders, without whom the business could not exist, should have the right to terminate employment on an at-will basis as owners. When unions are formed, they essentially lose this right. For more information, see the National Labor Relations Act article, which shackles owners: http://en.wikipedia.org/wiki/National_Labor_Relations_Act
4. “Music is more competitive now than in the 1960s.” You’re definitely right about this. Yes, the main reason is the decreased cost of production and information transmission.
5. “Artists needed more bargaining power in the 1960s.” No. First, there are biological and attention span reasons why songs were directed to be that length. Therefore, companies were trying to maximize profit by catering to that taste. To the extent that people demanded music that lasted longer, or went shorter, they could invest in and start their own companies to take advantage of that. It is true, of course, that back then recording companies were more important, though they remain important today. One of the reasons is because they have the resources to spread the product. Therefore, artists need the companies to increase their profit. That is why artists sign with them, seduced by the dollar signs so desired by their own self-interest. The reason artists signed sometimes restrictive agreements is because if they didn’t sign them, they knew other artists would, and they might be unable to get as good of a deal from another company.
6. “The workers themselves should have a say in their safety.” And they do. A lineman, more cognizant of those costs than the corporation is, need not work at FPL. Unions have probably contributed far far less to improved safety conditions than free market conditions did. The liberty to contract and the rights of contract are all very important to the free market. Plaintiff’s attorneys rightfully succeed on claims against corporations when they have been negligent because of common law common sense arising through case law going as far back as the 1300s.
For more information on the pernicious effects of unions with special rights, see today’s posts from Nobel Prize winning economist Gary Becker and famed jurist Judge Richard Posner: http://www.becker-posner-blog.com/archives/2009/09/union_power_in.html ( but do also note that halfway competent management would have fended off these unions, too. )