Tuesday, June 3, 2014

How The Concept Of Competitiveness Justifies Rising Inequality

The European Commission is demanding that struggling nations in the eurozone make difficult structural changes to improve their competitiveness.  The underlying assumption is that they will be able to export their way to economic growth by becoming more competitive.  The problem with that assumption is that it is impossible for every nation to run trade surpluses.  One would think that this is an obvious problem with the premise of the neoliberal ideology that defines the appropriate response to the economic problems in the eurozone.  This article argues that the concept of competitiveness has been used to legitimize inequality in all areas of our lives.  Moreover, while fair competition has some redeeming social values in a meritocracy, it becomes unfair when the winners in the competition are able to purchase the support of the referees who are supposed insure that we have a level playing field.

The pervasiveness of competition in our lives is overwhelming.  We watch TV shows in which chefs attempt to win competitions with other chefs and a plethora of other shows in which contestants compete with each other in wide variety of contests.  The outcome of these competitions is always the same.  There is only one winner, and there are a large number of losers who must accept their defeat gracefully.  To the winner goes the spoils of victory.

It is a simple step to take the idea of individual competition to the next level.  Corporations and states compete in a global economy and they are do what they can to adapt the economic contests to their advantage.  We have gotten to the point where it is no longer possible for the state to legitimize the competition because everything can be purchased.  The market economy has been transformed into a market society in which everything is up for sale.  The winners in the competition are in a position to purchase the referees. The media are perfectly happy to turn everything into a horse race that attracts an audience eager to bet on the outcomes.

CNBC recently interviewed Thomas Piketty.  The opening preamble to the interview was that we live in a meritocracy in which inequality is legitimized by the outcomes of a fair competition.  The preamble assumes that the race to the top is a fair competition and that the rewards that go to the winners are based upon merit.  How could anybody write a book that argued against growing inequality? Following the Piketty interview, CNBC asked Kevin Hassett, an economist from the conservative American Enterprise Institute, who wrote a book during the dotcom boom that predicted a rise in the Dow Jones to 36,000, about Piketty's book.  Hassett declared that the Financial Times destroyed Piketty's thesis, and he made several comments about the book which showed that he had not read it.  CNBC did its job.  It delegitimatized Piketty and it legitimized the underlying logic of a meritocracy which properly rewards the winners and punishes the losers.  Competition is the magic that makes the system work.

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