Daniel W. Drezner

When is business NOT like politics or intellectual life?

David Brooks’ New York Times column this AM is a riff off of a Peter Thiel lecture about the odd relationship between capitalism and competition. Thiel’s point is that our meritocratic society conditions individuals to compete — for admission to good schools, good jobs, and so forth — when, in fact, the goal of the ...

David Brooks’ New York Times column this AM is a riff off of a Peter Thiel lecture about the odd relationship between capitalism and competition. Thiel’s point is that our meritocratic society conditions individuals to compete — for admission to good schools, good jobs, and so forth — when, in fact, the goal of the capitalist should be to innovate their way to the capitalist holy grail — a temporary monopoly.

Brooks takes this argument and runs with it:

students have to jump through ever-more demanding, preassigned academic hoops. Instead of developing a passion for one subject, they’re rewarded for becoming professional students, getting great grades across all subjects, regardless of their intrinsic interests. Instead of wandering across strange domains, they have to prudentially apportion their time, making productive use of each hour.

Then they move into a ranking system in which the most competitive college, program and employment opportunity is deemed to be the best. There is a status funnel pointing to the most competitive colleges and banks and companies, regardless of their appropriateness.

Then they move into businesses in which the main point is to beat the competition, in which the competitive juices take control and gradually obliterate other goals. I see this in politics all the time. Candidates enter politics wanting to be authentic and change things. But once the candidates enter the campaign, they stop focusing on how to be change-agents. They and their staff spend all their time focusing on beating the other guy. They hone the skills of one-upsmanship. They get engulfed in a tit-for-tat competition to win the news cycle. Instead of being new and authentic, they become artificial mirror opposites of their opponents. Instead of providing the value voters want — change — they become canned tacticians, hoping to eke out a slight win over the other side.…

You know somebody has been sucked into the competitive myopia when they start using sports or war metaphors. Sports and war are competitive enterprises. If somebody hits three home runs against you in the top of the inning, your job is to go hit four home runs in the bottom of the inning.

But business, politics, intellectual life and most other realms are not like that. In most realms, if somebody hits three home runs against you in one inning, you have the option of picking up your equipment and inventing a different game. You don’t have to compete; you can invent (emphasis added).

Now, there’s definitely a strong element of truth to Brooks’ point. True innovators in many fields are searching for the genuinely new idea, and then run with it. I, for one, have a (temporary) monopoly in the international relations theory and zombies market. So I get what Brooks is trying to say here.

And yet, in the end, I think this is a crap argument, for a few reasons:

1) Brooks too neatly divides the innovation from the competition elements of market life. Indeed, the company that made Thiel super-rich — Facebook — is exhibit A for this point. Facebook didn’t really innovate anything that MySpace or other social networking sites hadn’t done already. Rather, because social networking is an arena where greater size means greater profitability, Facebook managed to beat its competitors at gaining market share. It did this through a few bells and whistles, but Facebook did not "create a new market and totally dominate it," as Brooks would put it.

2) Brooks has a tendency to conflate different dimensions of social activity as if they’re one and the same, and that bolded sentence is exhibit A of that. In point of fact, a politician usually can’t invent a different game — or, if s/he does, it’s often called a coup or a revolution. Brooks is clearly disgusted with the ticky-tack, news-cycle, tweet-length tactical fights of politics, and I can’t say I blame him. But Brooks of all people should know that politics is also about Very Big Arguments that cannot be avoided. Say what you will about either Barack Obama or the GOP House of Representatives, but over the past two years they’ve been having The Big Argument. I don’t think either of them can risk abandoning the intellectual competition (though maybe this is another option).

Similarly, as someone schooled in intellectual life, walking away from an argument means you’ve lost the argument. That’s not the end of the world, but given that arguing about ideas is what intellectuals do, it’s not great either. I think Thiel’s argument works well for business — but business is manifestly not like other spheres of life.

3) It’s worth noting that Brooks and Thiel mistakenly conclude that if the meritocratic system was adjusted, the best and the brightest would become better entrepreneurs. I question that hypothesis. Here’s the pithy Larry Summers observation that’s worth remembering. Summers was actually making an argument consistent with Brooks and Thiel, pushing back against the Amy Chua "Tiger Mom" silliness:

"Which two freshmen at Harvard have arguably been most transformative of the world in the last 25 years?" he asked. "You can make a reasonable case for Bill Gates and Mark Zuckerberg, neither of whom graduated." If they had been the product of a Tiger Mom upbringing, he added, their mothers would probably have been none too pleased with their performance.

The A, B and C alums at Harvard in fact could be broadly characterized thus, he said: The A students became academics, B students spent their time trying to get their children into the university as legacies, and the C students—the ones who had made the money—sat on the fund-raising committee.

The thing is, these groups are more self-selecting than Summers, Brooks and Thiel believe. Which means altering the meritocratic incentives won’t change all that much.

Am I missing anything?

 Twitter: @dandrezner

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