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Competing for Maximum Opportunities to Cooperate

Here’s a superb new paper by Paul Rubin.  It’s entitled Emporiophobia (and is forthcoming in the Southern Economic Journal).  A slice from the abstract:

The fundamental economic unit is the transaction and transactions are cooperative. The benefit of a market economy, increased consumer surplus, comes from cooperation through transactions, not from competition. Competition in a market economy is competition for the right to cooperate. Competition is important because it guarantees that the best cooperators will win and because it establishes the efficient terms for cooperation, but cooperation is fundamental.

My admiration for this paper is not surprising given that one of the themes that Paul strikes beautifully in it is the theme that motivated this short 1996 essay (“Competition and Cooperation”) by the late, great Hugh Macaulay and me.  (Hugh Macaulay, by the way, was one of the most insightful human beings that I ever knew – and also one of the finest.  With Bruce Yandle, Roger Meiners, and the late Russell Shannon also at Clemson during all or some my stint there, that upstate South Carolina school was crawling with such folk.)

It’s been a long time since I last read my and Hugh’s brief essay.  Would you think me to be a unforgivable braggart if I proclaim here that it’s one of the best pieces of writing to bear my name?  I say “bear my name” because, although I don’t recall who wrote just what parts of this essay, I’m certain that the best parts are from Hugh’s penetrating pen.  I know that the chief idea of the paper is his.  (I can still remember the lunch conversation in early Fall 1995 that gave rise to this paper.)  Here’s one of my favorite passages of the essay – a passage (on page 153) that I’m sure was penned by Hugh (but with which I fully concur):

If needs are the basis upon which goods are allocated, it will pay each person to produce not goods but “needs.”  It will pay people to move toward poverty, for only then will one’s needs be maximized.  Moreover, if others do not readily recognize these “needs,” it will pay those in “need” to exert efforts emphasizing the genuineness of their “needs.”

(If you think this passage describes no reality, pay attention to the typical excuses government schools and teachers’ unions offer for more funding.)