Rules of the Game

(Note: The Mackinac Center’s college outreach program, Students for a Free Economy, in conjunction with the Milton and Rose D. Friedman Foundation, organized a trip to a Lansing Lugnuts minor league baseball game on July 31, 2007. The event was in honor of Milton Friedman’s life work and free-market ideas on what would have been his 95th birthday. Its theme was how competition brings about improvements in both markets and baseball. The following is an essay by one of the attendees.)

Market-friendly economists often stress the role competition plays in giving people the incentive to work harder and the inspiration to do better. Too often, however, they neglect the role competition plays in informing the participants about their performance and in discovering what ways of doing things are more successful than others.

The purpose of competition in baseball, for instance, is not merely to incentivize the players to try to be better at the game. Rather, and more fundamentally, we play or watch competitive sports in order to see who will win. If we knew who would win before a game and how they would do it, there would be no point to the game, and it wouldn’t be worth watching. This shows that part of the purpose is discovering what will happen play by play.

Competition is a process of discovery, experimentation and imitation. Different teams try their own ideas about the best strategies and techniques. The most successful ones will tend to outperform others, forcing the competition to imitate the successful strategies or discover new innovations which will put them in the lead and raise the bar again.

It was this very process of experimentation and imitation that resulted in the desegregation of baseball and other professional sports in America. When the Brooklyn Dodgers came up with the "innovation" of hiring Jackie Robinson, the first black player in the major leagues, they were breaking with tradition. But Jackie Robinson’s talent raised the bar of competition. It became clear that those who were willing to sign the best players around, regardless of race, would have the competitive edge. Teams had to make the choice between discriminating based on skin color on the one hand and winning on the other. Slowly but surely, other teams started to sign talented black players and eventually talented players from around the globe. Competition tends to select the best ideas and people regardless of entrenched interests and prejudices.

Analogously, economic competition among certain groups discovers who can do the job best when it counts. Competitors continue to find ways of raising the bar for their competition, who must then adapt to meet it or make way for someone else. Just look at the statistics of professional athletes now compared to 100 years ago. The same improvements of quality (and prices) occur over time in a free, competitive industry.

Some might argue that such experimentation could theoretically be carried out within a single "cooperative" body, an all-encompassing mega-team, without actual rivalry and the drive and incentive to win. But it is only experimentation checked by the actual striving efforts between rival parties that delivers the results. For instance, would the various teams in the National League have admitted black players as early as they did had there not been a real incentive to compete against one another and win?

But even though players on opposing teams compete against one another, it is an interesting paradigm shift to realize that they also are cooperating with one another. They are implicitly agreeing to play by the same rules — together. Such cooperation is often taken for granted. Although players may argue with umpires, they eventually agree to abide by their calls. When they are judged to be "out," they do not obstinately stay on the base, unwilling to move, or break out into a brawl; they do not ask for special dispensation from the rules in order to impede a home run hitter from running around the bases. And if any of these things ever do happen, that’s the point at which true competition has broken down.

Underlying peaceful competition is peaceful cooperation. The cooperation at a baseball game is not confined to players on the field. In fact, everyone in the stadium is cooperating in order to come together to have a peaceful experience. When you’re there, look down at all of the people sitting peacefully together. It’s orderly, even if it’s a messy order. They are not orderly because the seats are all set in rows, but because all the members of the audience are tacitly agreeing to abide by rules, too. It is inspiring to try to think of all the rules that they must follow for the event to be as orderly and coordinated as it is. Have you ever watched a hotdog being passed down a row of strangers to get from the vendor in the aisle to the guy who just bought it? The cooperation is amazing. Like the market, a baseball game is a layer cake of competition and cooperation.

Likewise, underlying the competition in society is a more fundamental system of cooperation without which the competition could not function. Economic competition, within the rules of respect for private property and individual choice, is actually a process of peaceful cooperation among the members of society that facilitates discovery about how they can best provide for one another’s needs through the market.

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Andrew G. Humphries is a 2007 graduate of St. John’s College in Santa Fe, N.M., and a research intern at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided the author and the Center are properly cited.