With all our emphasis on cooperation, some people wonder about how our values relate to free-market competition. This article aims to provide perspective on these issues.
Dogma about the benefits of competition is so widespread that many people forget that the primary relationships in business are cooperative. We trade with others, collaborate, form partnerships… Even competing businesses often cooperate.
Of course, when we advocate cooperation, it does not mean strict rejection of competition. When markets lack competition, we may see stagnation, entrenched power, and homogeneity.
Snowdrift.coop is creating a market system that allows diversity and competition while encouraging cooperation. Our mechanism provides a network effect that promotes everyone collaborating to support the same projects rather than have excessive fragmentation. Of course, the FLO terms on everything mean the freedom to fork projects and go in new directions, and that addresses much of the concerns about power and stagnation that happen in typical monopoly situations.
Pros and cons of competition
Competition can certainly motivate people. The question is whether competition-based motivation focuses us on the right priorities compared to other sources of motivation. While friendly, productive competition is often helpful, the primary focus should be less on winning over others and more on our primary goals.
Notably, the strongest motivation from competition comes with only a small number of competitors. As the number of competitors grows, it reduces motivation.1 So, even from the perspective of motivation alone, more competition is not always good.
Diversity and evolution
The real value in a competitive market comes from people trying different approaches to problem solving. We all benefit when we get to test various solutions, learn from one another, and see what works best. Diversity is provides the raw material for evolution.
Of course, diverse efforts have costs and risks. If several different efforts all have inadequate resources, then all will fail. Perhaps the same people can succeed by cooperating on a single initiative. However, if everyone cooperates on an invalid solution, then they will still fail. If we were omniscient, we could know which approach to prioritize and all cooperate on that. In reality, we must accept that we need a balance between all-our-eggs-in-one-basket and spreading-ourselves-too-thin. We should celebrate diversity while we also cooperate sensibly.
Broadly, Snowdrift.coop competes with other platforms to be the best funding mechanism for public goods; and we celebrate the diversity of approaches that fill different niches for our common goals. However, we don’t want any direct competition with anyone else working to duplicate our exact place in the market. We wish for everyone who supports our mission to join us and work together.
Competition and combat
The worst cases of competition involve succeeding by hurting your opponents or keeping special advantages (like keeping secrets, getting government protection and favor). As Richard Stallman puts it, “competition itself is not harmful; the harmful thing is combat.”2
If you give everyone else access to your ideas and they do likewise, then whoever provides the best products or services will succeed — that is honorable competition, and it leads to greater prosperity for society overall.
We recognize the temptation to undermine competitors, so we try to address that problem. As author and researcher Dan Ariely wisely puts it, it is easier to avoid temptation than to resist it. When projects have proprietary control, they will be tempted to abuse that control. By requiring transparency and FLO licenses, we remove the possibility for many anti-competitive strategies. You succeed in FLO competition by simply doing the highest quality work; and transparency assures that everyone still gets credit for their contributions.
Too many overlapping competitors can lead to inefficient and over-saturated markets. We encourage projects to work together to achieve common goals rather than to reinvent the wheel. The world does not need hundreds of programs that do the same job. The Snowdrift.coop mechanism inherently provides extra incentive for developers to consolidate their efforts and for patrons to coordinate in supporting select projects.
When we compete in a zero-sum game, we profit only by taking away from others. In non-zero-sum situations, competition can involve positive, constructive actions that ultimately benefit all involved.
Within the Snowdrift.coop system, projects compete for patronage somewhat. However, as patrons see value from project successes and want to support more projects, they can increase their overall budget. So, the Snowdrift.coop market need not be zero-sum.
The general public often naively equates capitalism with market competition. However, the definition of capitalism is private ownership of capital, i.e. private ownership of infrastructure, means of production, resources, etc. People can argue about whether capitalism generally involves competition or mainly promotes monopolies, but these issues aren’t directly relevant to us.
FLO public goods may exist with or without an otherwise capitalist system. By definition, public goods are not privately controlled. Whether the rivalrous physical infrastructure in society is privately-owned (as in capitalism) or publicly-owned (as in socialism), non-rivalrous public goods are a separate matter.
FLO supporters and people working on Snowdrift.coop hold widely varying political views. The common features involve support for civil liberties and support for maintaining freedoms and public access around public goods like information, software, art, and so on.
Some FLO development is centralized and hierarchic, but the very nature of FLO permits and encourages decentralized and anarchic organization. Whereas proprietary restrictions inherently create imbalance of power, FLO communities emphasize voluntary participation.
Neither governments nor corporations should control our technology and culture, but we still welcome the involvement of both governments and corporations — as long as the end products respect freedoms for all.
Cooperatives support bottom-up control
As a multistakeholder cooperative, Snowdrift.coop aims for democratic governance by community members. This model coordinates different types of users working toward mutual goals instead of pitting their interests against each other. In our system, competition is friendly and constructive and works alongside our cooperative structure to bring out the best from projects and contributors.