Belief in Efficiency & Competitiveness

In the United States we celebrate private enterprise. At the same time, we often downplay public institutions and ignore their contributions to the world we inhabit. We focus almost exclusively on the developments of private corporations and the developments and innovations of businesses. We are critical and wary of anything that can be presented as inefficient or likely to make private companies less competitive. However, this mindset sometimes means that we become too focused on short-term performance and fail to see larger systems and structures that unite private enterprise with the rest of society.
In his book The Homeless Christopher Jencks writes, “almost everyone … believes that efficiency (often called “competitiveness”) must come first, and that social stability will somehow follow.” The general mindset in the United States is that we need to have a fast paced, innovative, and efficient private sector for our country to flourish. Without first ensuring that the state is set for businesses and private enterprises to operate at maximal efficiency, our democracy and our country cannot successfully exist. America, this argument holds, is entirely dependent on business profits, and anything that gets in the way of competitive and efficient business is a threat to the country.
I am not an economist, and I don’t understand labor markets very well. However, I think that Jencks is correct when he states that we accept a level of sacrifice of the lowest socioeconomic status individuals in the United States in exchange for a meritocracy that generally works pretty well for most of us. I generally think we are hyper-focused on ideas of deservingness and on our own self-interest. We conflate our own self-interest with the self-interest of society at large, arguing that our economic purchases and chasing our own individual materialistic goals is what is going to keep our economy running, innovating, and leading the world.
The argument that Jencks is making in the quote above is that pure business efficiency and competitiveness is not enough for a stable society. Sacrificing those who don’t have the skills to make it in an efficient business world creates instability and fractures within our society – instabilities and fractures that an efficient business mindset cannot address. For Jencks, and for me, human connections and social cohesion are at least as important as efficiency and competition in business. The focus on short-term returns, a frequent critique of American corporations today, certainly cannot help social cohesion or improved long-term human connections and senses of community.
I think that writers like Tyler Cowen are correct in arguing that economic growth (which delivers improved quality of life) are important, but I’m not sure businesses are always focused on improving life satisfaction. Businesses are often focused on short term rent capture, which harms society. I think there are ways to drive innovations without creating an underclass that is crushed along the way and we need to find those ways. I think we need to remember how important the role of government can be in developing technologies and encouraging innovation. The development of the internet is a great example of the important, but easily overlooked role that the government can play in technological development, and Katz and Nowak show in The New Localism, how local governments and quasi-public/private institutions and partnerships can be a new model for driving economic growth and development. The key is recognizing that pursuing business efficiency at the cost of the lives of those on the lowest rung of society is not supportable and won’t lead to good social outcomes in the long run.

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