Competition as Cooperation Serves Customers

Article / Produced by TOW Project
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What does it mean to cooperate? It might be defined as coordinating our activities with one another toward a shared end. This simple definition allows us to consider whether some things that do not appear to be cooperative, such as competition, actually are forms of cooperation.

The Theology of Work Project commentary on Proverbs states that business is at heart a form of cooperation. The passage describes the proper relationship between cooperation and competition with helpful precision:

The near-universal ascendancy of market economies is arguably due to the benefits of competition. But business, politics and other forms of competition are at heart forms of cooperation, albeit with significant competitive aspects. Society fosters competition in order that all may thrive.

The statement that business is at heart a form of cooperation will strike many as implausible. But no goods or services could be delivered to customers without many people cooperating. Within each company, coworkers must cooperate. Cooperation also takes place across companies. More than one company, and sometimes very many of them, cooperate in the production of any given good or service. Buyers (customers) must cooperate with sellers (companies) in the activity of commerce to obtain those goods and services.

Cooperation is the basic reality of economic activity. Competition is a second-order effect of this cooperation. When customers have multiple options of companies with which they will cooperate as buyers of goods and services, the companies must compete with one another to see who can cooperate more efficiently to deliver value to customers.

Strange as it may sound, competing with one another ethically – with right motivation and just conduct – can actually be a form of cooperation. If Honda and Ford each compete to make and sell cars that serve customers best, customers benefit from better cars, prices and service. This fulfils God’s own design for work. As Dorothy Sayers puts it, “The very first demand that his religion makes upon the carpenter is that he should make good tables.”[1]

Sometimes making good products is aided by intentional cooperation, as with safety and engineering standards (e.g. tire ratings and sizes). Sometimes this means buying parts from one another’s supply chains or servicing one another’s vehicles. Cooperation must never be undertaken in order to harm customers, such as colluding to set prices or undermining environmental regulations. Competition must never aim to damage the other company (for example by false advertising) and thereby reduce customers’ access to quality choices. In ethical markets, companies compete within the bounds of love for customers and respect for one another.