Your article encapsulates my own views Gilbert.

"If either competition or co-operation is allowed to dominate, it will do so not only at the expense of the wealth generating capabilities of the other."

I think that is the key - the balancing of the two competing, principles in a society still bogged down in collectivist/free-market or Left/Right perspective rather than embracing the aspects that would work better for human beings at a community level. At the moment we are too focussed on the free market perspective while losing opportunities for shared assets. And we have seen the destructive pressures towards privatisation too many times.

There are people who believe that none of the productive aspects of society (even essential service based) should not be owned by the people and this is the dilemma. On one hand it will be a hard sell but there are positive signs that people are starting to think in this direction unfortunately it has not reached those who have the power to influence with any strength of purpose. My hope is that if we can encourage more independents and smaller parties into the political arena we might have a better chance at having some of those non-mainstream ideas surfacing.

The irony is that it is only with the swings and roundabouts of history that ideas become mainstream or not, and it is easy to be manipulated into thinking that the non-mainstream is the enemy.

Well said Gilbert. I've been struck by the parallels between the Tao and modern economies as complex systems. In nature cooperation is as pervasive as competition, which is what led the Taoists to their insights I guess.

You can see my thoughts on this (including a book) at
http://betternature.wordpress.com/2010/07/28/nature-of-the-beast/
and related posts, though the cooperation-competition part is not very explicit there.

You might also be interested in this note that Adam Smith may not even have been talking about markets:
http://rwer.wordpress.com/2010/08/31/the-metaphor-of-the-invisible-hand/

Production based on private property involves far far more co-operation than
a) competition, and
b) is involved in government.

As between the producers, the relation is one of competition, but one in which force and fraud are illegal. As between the far greater number of consumers and producers, the transaction can only take place if both parties regard it as beneficial: a win/win.

By contrast government, whether democratic or not, depends on a claim of a legal monopoly of the use of violence or threats of violence. In law, tax is explicitly *not* a payment for goods or services. It is a compulsory exaction.

We don’t pay taxes in exchange for infrastructure etc. We pay taxes in exchange for not being locked up. If it were true that you pay taxes willingly for the goods they pay for, then taxes could be abolished, couldn’t they, since you’d be willing to pay for the services without compulsion?

All of government’s revenue comes from this zero-sum process: the stronger takes from the weaker, and value is destroyed. It is intrinsically far more competitive and destructive of shared value than *any* market transaction.

Misleading and deceptive practices are illegal in trade or commerce, but not in government or politics where they are notorious, routine. That is why so much election campaigning consists of wondering, and scepticism, whether politicians will keep their promises - because they are not legally bound to!

So it is complete nonsense to identify production based on private property and individual liberty with value-destroying “competition”, and to identify government with sharing and net-beneficial “co-operation”.

There is a need to distinguish voluntary socialism – such as friends, families, clubs, monasteries and communes - from involuntary socialism, such as all government. We don’t call rape or robbery “sharing” or “co-operation”. It is moral nonsense to do the same with government.

If GH wants to promote localism by running a business at a profit or loss – go right ahead. But any policy measure is not a third way – it’s just more of the coercive sector exploiting the productive sector.

Adam Smith's 'invisible hand', as exemplified by the $20 cup, depends to a very large extent on reasonably equal power between the negotiating parties. This can be achieved by the potential buyers forming an association ( a UNION, like the AMA eg). The retail price of the cup can then be arrived at by genuine negotiation between 2 equal powers. In addition it is really true that 'No man is an island', so the cup seller needs to relate the financial position of his buyers in some way to the cup price – assuming that the people have to buy the cup. If you were interested in the effect of negotiations between entities with vastly differing power you might find Joe Bageant's book "Rainbow Pie", recently published, illuminating.

"Adam Smith's 'invisible hand', as exemplified by the $20 cup, depends to a very large extent on reasonably equal power between the negotiating parties."

No it doesn't. The benefit to both parties is precisely because of their inequality.

Thanks Gilbert for a succinct and stimulating article. I agree that there is much to be gained by trying to organise ourselves in such a way that we can capture the benefits of both competition and cooperation.

On the other hand I find myself really intrigued by the vehemence of those who liken any government involvement in the life of the community to violent coercion. For sure governments mess things up, and do many things with less elegance and economic efficiency that what private enterprise can deliver. But there are also examples of government intervention in the economy that I think work OK. The public health care system in Australia is far from perfect - but it works better than the US system in that it makes a basic level of health care available to a greater proportion of the population, including those who for a range of reasons wouldn't be able to afford the full cost of health care in a fully privatised model.

However I think there is also a false binary being set up here. I don't think the choice is only between a corporate-run economy on the one hand and a state-run economy on the other. There are all sorts of creative designs that do blend aspects of cooperative and competitive motivations and behaviours, such as cooperatively-owned enterprises, outsourcing by government to non-government providers, community participation in the design and delivery of state-run services etc.

To be honest, though, sometimes I think a bit of coercion in our own interest isn't always a bad thing. Traffic lights are a bit of a hassle, but I'd rather that than a free-for-all.