Tyler Cowen on invisible competition

Here is an old 2007 essay of mine from Wilson Quarterly, one which most of you have not read.  The key point is that your most critical competitors are now much more distant and indeed invisible than before, and that this will have social and economic implications.  Here is one excerpt:

George Shackle, the neglected Scottish economist, wrote in his 1973 book Epistemics and Economics that the entrepreneur imagines a future no one else sees. For Shackle, the entrepreneur is not just a trader, a manager, or an initiator of enterprise. The fundamental entrepreneurial activity is creative, and it occurs in the mind rather than the physical world. The creators of YouTube and Facebook did not require a new raw material or even a radically new programming technique; most of all they were blessed with the ability to imagine a new way to present material and connect people to one another. Their competitors, if that phrase can even be used, were the young potential entrepreneurs who might have hit upon similar ideas first, but didn’t. These phantom rivals were not out in the public arena, promoting their corporations or thumping their chests and proclaiming grand plans. Rather they were quietly doodling away on their computers in scattered suburbs and cities, perhaps after finishing their homework for the ­evening.

Invisible competition also gives an edge to people who can manage and interpret their own feedback. In the past, if you lost a job to a person who was smarter than you or had a better line of patter, you could size up the winner and gauge where you fell short. Now you can’t always see who crossed the finish line ahead of you. The future will favor people like Madonna, the pop star and media icon who has successfully reinvented herself so many times because she has an uncanny sense of where popular culture is bound and how to get there ­first.

And this:

The nations most disadvantaged by invisible competition may be those that exist in proximity to a key rival. They risk focusing too narrowly on one challenge and getting used to the idea that competition takes a highly visible form. Transfixed by its rivalry with India, Pakistan may be oblivious to other concerns. A similar preoccupation makes it harder for many people in the Middle East to take a global ­perspective.

I still like the piece.


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