Tag Archives: competition

Red Queens and Black Queens

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It sounds like a fantasy novel, but the Red Queen hypothesis is about species competing and co-evolving with one another over long periods of time. It is named after the Red Queen in Through the Looking Glass, who said “it takes all the running you can do, to keep in the same place.” In other words, species have to constantly evolve and adapt, or they go extinct. 

The Black Queen hypothesis is hard for me to understand, but it refers to

the queen of spades in the game Hearts, where the usual strategy is to avoid taking this card. Gene loss can provide a selective advantage by conserving an organism’s limiting resources, provided the gene’s function is dispensable. Many vital genetic functions are leaky, thereby unavoidably producing public goods that are available to the entire community. Such leaky functions are thus dispensable for individuals, provided they are not lost entirely from the community. The BQH predicts that the loss of a costly, leaky function is selectively favored at the individual level and will proceed until the production of public goods is just sufficient to support the equilibrium community; at that point, the benefit of any further loss would be offset by the cost. Evolution in accordance with the BQH thus generates “beneficiaries” of reduced genomic content that are dependent on leaky “helpers,” and it may explain the observed nonuniversality of prototrophy, stress resistance, and other cellular functions in the microbial world.

In other words, organisms can sort of help their rivals, and there can be some survival advantage to this over long periods of evolutionary time. I’m not sure I quite get it, but there it is.

monopoly and free markets

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This article from Alternet has a nice explanation of why “free markets” in the absence of regulation do not lead to open and fair competition:

Some monopolistic industries mess around with your daily life in an obvious way, like Big Telecom bringing you the low-grade misery of shoddy service and defective products. Others fly a bit lower under the radar, like the credit reporting monopolist Fair Isaac Corp, which can blast your financial existence in a nanosecond…

What I want to see, when I look at a marketplace is: Is that market open to a newcomer?

If I want to go into the business of farming in this community, can I become an independent farmer? If I want to go into the grocery business, can I do that, is it open? If I want to bring a new variety of paint to the market, do I have a place to sell my new variety of paint? If markets are open, that’s a good thing.

What we see is that the people who have actually preached the doctrine of free markets, this last generation, when you go back and look at it historically, is that the idea of free markets really comes out of the Chicago School, the libertarian wing of academia. They were preaching free markets, but when they would preach free markets, they also preached the elimination of all regulation. But when you eliminate all regulation you end up with no markets at all, because you end up with monopolists, and monopolists are the antithesis of an open market.

This idea of markets truly open to new competitors makes a lot of sense, and it makes sense for the government to support it. However, going back to Joseph Schumpeter and his idea of “creative destruction”, there is another kind of competition that may be more important. Competition is not just about new competitors entering the market to provide the exact same good or service in the exact same way. It is also about innovators finding completely new ways to satisfy people. For example, instead of competing with existing car companies by offering a different brand of car, I can compete by inventing Uber, or a car pooling website, or bike share, or protected bicycle lanes. These are alternative ways of meeting peoples’ need and desire to get from point A to point B. Even if the car company has a monopoly on the market for cars and it is hard to enter that market, we can compete with them. In fact, if they are slow to innovate and respond to outside threats, we may be able to crush them.

This model sounds great, but there is something insidious that often happens. The monopolist, instead of responding with innovations of its own, buys political power and uses it to try to prevent others from innovating. You can see this in the fight against Uber, and Airbnb, and selling solar power back to the grid. This is what I find really shameful and undemocratic, and we good citizens should not let it stand.