19 Comments

Sure, the aim of the competition is to see who can serve society best–but that is also the basis on which conscientious corporations compete!

Well, except for rent-seeking.

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Has it occurred to you that the marketplace of ideas about how society should work is a very competitive marketplace? By proselytizing your views about how society should work, you are competing! Sure, the aim of the competition is to see who can serve society best--but that is also the basis on which conscientious corporations compete! I'm suggesting that you form a conscientious corporation, which seems just as compatible with your ideals as what you're doing right now.

Do you have a hard time signing papers or acquiring new skills?

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Though this may come as a shock you, revolutionary anarchist agitation requires no initial capital investment or special skills. You don't have to take out loans. You don't have to sign any papers. You don't have to know how to start and manage a business. Moreover, starting a cooperative company for profit within broader capitalist/competitive framework conflicts with my ideals.

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"Who pays?" .... Acknowledged.

Effective CEO's [but usually other C level firewalls like COO's & CIO's] accommodate some "trial and error" within their budget for these adventures. They usually take a portfolio approach to innovation across projects and project managers. The goo dones know how to bury early stage innovation within their budgets too.

As entrepreneurs outside the Corporate world learn, the issue with the spend is not how big it is, it is how smart and adaptive it is. Incrementalism works.

And as any good banker knows, keep away from a borrower [ie. CEO] that wants a "bet the company" innovation. In that case, it is often the agent betting the principal's money, not their own.

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Summerspeaker, it's hard to take someone seriously when they say that overthrowing the capitalist system and replacing it with communes would be easier than starting a successful company with a culture of cooperation.

If you're so sure that your model works, prototype it on a small scale and show it to other people. Working examples are far more convincing than protests and theorizing.

"I doubt the supposed less competitive industries employ anything like a healthful cooperative environment." OK, then this represents an opportunity for you to start a cooperative company, make a ton of money, and spend it promoting your cause! What are you waiting for?

I have a really hard time understanding how some people think.

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OK, but who says we need more innovation?

My old economics professor did consulting on the side, and he said that whenever company executives started talking about "strategic" assets, hard analysis went out the window. Also, I vaguely remember reading somewhere that companies don't milk their cash cows as long as they should to profit-maximize before moving on to the hot new thing.

And it seems pretty clear to me that corporate profit-maximizing correlates well with customers getting satisfied. The most useless kind of corporation is the one that makes a product no one wants to buy.

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Robin, I'm not saying that are biases are perfect behavior at all. What I was getting at is that, on the margin, "debiasing" might make one more biased, not less.

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Is this result really suprising? Sure, CEOs that underestimate the probability of failure will take more risks in general than CEOs that correctly or overestimate the probability of failure, includuing the risks associated with technological innovation. It's probably better for the economy or society in general to underestimate rather than overestimate risk though, provided you don't do it too much.

Diim, I don't think the majority of waste in the health care system comes from spending on medical R&D but on unnecessary procedures and medications at the "consumer" level. Although I do think that medical innovation dollars are being spent in suboptiomal areas (i.e. drugs that lower blood pressure or cholesterol--thus enabling unhealthy lifestyle choices--rather than research into new vaccines).

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For the record, there have been examples of productivity increasing in companies in which they moved toward a cooperative rather than competitive environment within the workplace. If, by some bizarre twist of fate, I became a capitalist, I would use that model.

The psychological research I refer to deals with primarily with children in the educational setting. It's certainly possible things function differently on the grand scale. Unfortunately, we're not yet able to conduct such large experiments.

But what does "more competitive" even mean in this context? It all looks awfully competitive from where I'm standing. Most if not all of the CEOs in question presumably when through the typically hierarchical, status-based school system dominant today. I doubt the supposed less competitive industries employ anything like a healthful cooperative environment. As such, that comparison is not a good test.

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Summerspeak - if your hypothesis was true that moving away from capitalism increases creativity, then how come this study found that the competitiveness of the industry mattered, in that more competitive industries had more innovative CEOs? Of course correlation is not causation, but a lack of correlation does imply a lack of causation. And do you have any data about creativity in capitalist systems compared with creativity in non-capitalist ones?

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Because I both lack capital and abhor capitalism. I would rather struggle for a new cooperative social system than work within the existing structures.

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Jayson, yes there is much we don't understand, but it seems unlikely that all our apparent biases are actually perfect behavior.

Dlim, directed attempts at innovation are much more likely to be socially useful than randomly doing too much because no one seems to mind the waste.

Karl, the issue in this case is who has to pay for the failures that teach these CEOs.

Summer, so why don't you start a company where you don't make your employees compete, and then reap all that creativity?

Henry, yes there can be too much innovation, but usually there isn't.

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Is this necessarily a good thing? There can certainly be "too much" innovation. Although, due to positive externalities, this is probably serendipitously socially beneficial. How many other ways does this exist (in which someone's mistaken view of private benefits causes them to move to a more socially efficient level).

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For even more innovation, move away from competition entirely. As popularized by Alfie Kohn, the best psychological research the subject shows competition to reduce creativity and originality. In cooperative environment, people feel more comfortable taking the sort of risks that lead to outstanding outcomes.

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Exactly what I suspected.

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Perhaps these "over confident" CEO's understand that you "fail your way to success" and that your knowledge and experience grow as much with failure as it does with success. An innovator understands that each failure gets you that much closer to success. That is probably why you find them in competitive industries where the need for change is critical.

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