What are the roles of competition and cooperation for a successful business or economy? Current opinions in the business world are a mass of contradictions. According to the metaphor of the invisible hand, the pursuit of self-interest robustly benefits the common good. Competition among firms is supposed to result in “creative destruction”, allowing the best to triumph over the worst. Yet, a business retreat is very likely to feature trust-building exercises and reminders that there is no “I” in TEAM.
MLS theory makes it crystal clear that unless competition is appropriately structured and refereed, it can do a lot more harm than good.
Multilevel Selection (MLS) Theory can create order out of this chaos. It was developed for the study of social behaviors in non-human species but it is equally relevant to the cultural design of human groups, including but not restricted to business corporations. It is based on the following principles, which are so elementary that they are unlikely to be wrong.
- Evolution is based on relative fitness. It doesn’t matter how well one survives and reproduces in absolute terms; only in comparison to others in the vicinity. As the economist Robert Frank puts it in his book The Darwin Economy: Liberty, Competition, and the Common Good, life is graded on a curve.
- The social behaviors that maximize relative fitness within a group tend to undermine the welfare of the group. This is the opposite of the metaphor of the invisible hand.
- Social behaviors that are “for the good of the group” might be selectively disadvantageous within the group, but they can be highly advantageous in betweengroup competition.
As a quick way to understand the logic of MLS theory, imagine playing the game of Monopoly, where the goal is to own all the real estate and drive every other player into bankruptcy. This is the maximization of relative fitness within the group. Now imagine a Monopoly tournament with multiple teams. The trophy goes to the team that collectively develops its properties the fastest. This is the maximization of group fitness in a multi-group population. Nearly every decision that you make as a team player in a tournament would be different than as an individual trying to beat your opponents in the regular game of Monopoly. MLS theory makes it crystal clear that unless competition is appropriately structured and refereed, it can do a lot more harm than good. To make matters more complex, the logic of MLS theory applies to all levels of a multi-tier hierarchy, including the tiers of a single hierarchically organized corporation. What’s good for a single employee can be bad for her unit. What’s good for her unit can be bad for other units, and so on, all the way up to what’s good for the corporation being bad for the global economy and environment.
The idea that competition among firms results in the best replacing the worst would be called “naïve group selection” by an evolutionary biologist—as if selection operates only at the level of firms. Evolutionary biologists went beyond naïve group selection decades ago and their progress can be a tremendous source of insight to the business world.
To get your free copy of “This View of Business” [click here]!
For more about MLS theory:
Wilson, D. S. (2015). Does Altruism Exist? Culture, Genes, and the Welfare of Others. New Haven, CT: Yale University Press.
Wilson, D. S., Kelly, T. F., Philip, M. M., & Chen, X. (2015). Doing Well By Doing Good: An Evolution Institute Report on Socially Responsible Businesses. [link]
Wilson, D. S., Van Vugt, M., & O’Gorman, R. (2008). Multilevel Selection Theory and Major Evolutionary Transitions: Implications for Psychological Science. Current Directions in Psychological Science, 17(1), 6–9.