One explanation for why wealth paradoxically increases competitiveness wealth is that as people grow more prosperous they spend more time working to fulfill desires rather than basic needs, and desires are usually more demanding than needs. That's only part of the story, however.
Another reason has to do with the fact that as a society becomes richer, the scale of the competition shifts and people in every part of the society find themselves struggling to meet ever higher standards just to keep pace. People living on the lower rungs of the economic ladder in rich-world cities today would probably have been reasonably successful in earlier agricultural societies.
The Red Queen principle in evolutionary biology, whose name was taken from Lewis Carroll's book Through the Looking Glass (where the Red Queen says "in this place it takes all the running you can do, to keep in the same place") says that a species must continue to evolve just to maintain its fitness relative to other species with which it is co-evolving.
In other words, predators and prey run an evolutionary arms race against each other. When one improves, the other also quickly improves, and so neither is better off relative to the other.
The Red Queen principle seems to apply to societies as they grow richer. Why would this arms race happen? It might seem that rising abundance would mean that predators and prey would all get fed. Part of the answer to that question might come from a second principle, which here I will name the Bigger Pond principle.
By the Bigger Pond principle I mean that fiercer competition arises when resources become more abundant, because as the supply of resources increases, the population also tends to rise and new predators are attracted to the scene. A predator, in the case of human societies, could be defined simply as a person whose position in society allows him or her to control a larger share of resources.
The Bigger Pond principle is meaningful because in a larger pond, there's a chance that at least some of the new competitors will be stronger than any that had been in the pond before.
As the pond grows larger, stronger predators will be attracted to the greater resources that the pond now has. The larger population is more likely to have a broader spread in variation, with players at further extremes of strength or cleverness.
Because of the bell curve, a larger population will more likely have a fuller representation of different types at all positions along the bell curve, including the extremes, than a smaller one will. That is part of the truth behind the expression "to be a big fish in a small pond," after which the Bigger Pond principle is named.
A pond that grows larger and more diverse population is more likely to include predators that are more formidable than any that had existed in the pond when it was smaller.
The predators who had been at the top of the heap will find themselves overwhelmed by the much stronger predators who are now likely to appear in the pond.
Competition is a matter of what scale is used to measure how successful a person is at controlling resources in a society. When we say that a society becomes more competitive, we mean that the scale shifts "upward", and people who used to be at the top end of the scale now find themselves closer to the middle, and people who were in the middle before are now closer to the bottom.
Becoming more competitive does not necessarily mean working harder. In fact, a person sweating in a dusty field may be working harder than an engineer sitting at a computer, even though the engineer's position is probably more competitive.
The trend toward globalization means that the whole world begins to work as a single, enormous pond. As a result, a person living in an urban center almost anywhere in the world today is much more likely now than 30 years ago to come into contact with individuals who are overwhelmingly more successful than him or her at whatever form of competition happens to be taking place.
Although technologies such as the "box" (containers on ships) and global telecommunications may have driven the acceleration of globalization, those technologies were adopted by a world that was already eager to globalize. This is a chicken-and-egg situation. Globalization has led to greater competitiveness, but globalization has itself also been an almost inevitable result of the greater competitiveness and appetite for bigger markets that the rising wealth from industrialization brought about.
With ever Bigger Ponds teeming with ever fiercer predators, where does it all lead? Are there limits to how much competition individuals and societies can sustain? Where do those limits lie, and how suddenly will we reach them?
To give an example of how the rules of the game keep changing to make standards harder to meet, at the beginning of the last century only a relatively few fortunate people could attend university in the United States. By mid-century, rising wealth and changing public policy made universities accessible to many more people. Today, having a university education has become a kind of bare minimum in the United States. Now many parents feel that they have to care about which university their children attend, not just about whether they can attend at all.
As competition grows more intense, more aspects of society are being managed like corporations, with a constant eye toward exploiting business and marketing opportunities. Marketing is a systematic approach to competition, and has become what almost amounts to a new religion.
Many people use marketing as a guiding force in many aspects of life outside of business. As a result, life for them becomes a contest for popularity. Competition for public appeal and stardom, just as in Hollywood, is pervasive, even in areas such as science.
That trend has some unhealthy effects. Many substantial and valuable aspects of life get ignored at the expense of what provokes the right emotional response in the market. When individuals run their own lives as brands for sale, spiritual impoverishment is an almost inevitable result. They lose the connection to their inner essence as they push themselves to conform to what they perceive the market to be demanding.
The rising expectations that come with greater wealth are well known: there's no limit to the appetite for consumption, especially with effective marketing to make the next thing so irresistible.
When everyone around you has things, how can you say no? As is also well known, rising demand for consumption stimulates the production of more material wealth, which then grows seemingly without limit.
An interesting aspect of the psychology of personal wealth is that people perceive their own material well-being in relative terms. They naturally compare themselves to their neighbors. According to many surveys, people do not actually become more satisfied with their lives as their societies grow wealthier.
One effect of material growth is that it relentlessly raises the competitive bar. Eventually people feel less well off, even if they successfully maintain or slightly improve their standard of living in absolute terms.
As the scale of competition shifts and more resources move into the hands of fewer people, then even if society as a whole is better off materially, many people may still perceive themselves as worse off because of the huge gap between themselves and those at the top.
Because of the Bigger Pond principle, the gap between ordinary people and those at the top will tend to increase as the pond grows larger. In an open society with an active media, those gaps will be clearly and painfully visible.
In response, the majority of people can choose either to compete furiously and push themselves into an ever more stratospherically exclusive elite, or they can let themselves slip downward as the competitive scale shifts and they come to be measured as part of the unloved lump in the middle of the bell curve.
Intense focus, extraordinary talent, and a certain degree of opportunity will enable some individuals to improve their skills within a given set of competitive circumstances.
Those individuals may improve their skills rapidly, but probably still only at a linear rate. The problem is that the scale of the competition will often shift suddenly and dramatically when the pond gets larger.
The wave of non-linear change that comes with each new competitive regime can easily outstrip the best efforts even of the highest-performing individuals in the existing regime.
Eventually societies will run up against psychological limits to advancing elitism and the hollowing out of individual self-worth. How and when the breaking point will be reached is hard to predict. Obviously, rats can't keep racing faster forever. We should at least understand what we're racing for.
Michael Webb, May, 2006
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