Dragon
Senior Member
- Sep 16, 2011
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This is something that doesn't get recognized much, but that underpins a lot of right-wing thinking, especially on economics. It's a special case, or actually two special cases, of the general fallacy of false induction -- reasoning from the particular to the general when that is not warranted. It takes two common forms, viz:
1) Doing A helps my business succeed. Therefore, for all businesses to do A helps the economy.
2) Doing B helps me (or my cousin or the kid down the street or whoever) get a good job. Therefore, if everyone does B, everyone will get a good job.
The reason why both of those are invalid thinking, and why I call this "the competitive fallacy," is because in each case, A or B is what helps the particular business or job-seeker to outdo the competition. If ALL businesses or jobseekers were to do the same thing equally well, then it would provide no competitive advantage for any one of them, and the benefit seen when just ONE business or jobseeker does it is lost. All that's left is the general effect of all businesses or jobseekers doing A or B, which may be good or bad.
Here are a couple of real-world examples not employing letters as placeholders.
1) A state provides low taxes and lax regulations to get businesses to relocate there. Businesses do so, getting a tax break and lower regulatory compliance costs. The competitive fallacy leads to the conclusion that lower taxes and lax regulations help business. But what if ALL states drop their taxes and regulations to the same level? Then no one state has any advantage over any of the others and the benefit to the state of doing this is lost -- while the cost in lost tax revenues and whatever damage the regulations are intended to prevent remains.
2) A jobseeker pursued extended education in a hot field, gets a master's degree, and improves his chances of being employed. He lands a great job. The competitive fallacy leads to the conclusion that all anyone needs to do to get a great job is go back to school and get a master's degree in that same hot field. But there are only so many job openings for holders of masters' degrees in that particular field, so if EVERY job seeker were to go back to school and get a master's degree, that degree would not provide a competitive advantage anymore for any one of them, and only three things would happen: a) the labor market for that particular job would be flooded, resulting in lower pay; b) the enrollment market for that educational specialty would become very tight, resulting in longer waiting lists and (perhaps) higher tuition; and c) we would end up with some highly educated janitors, burger-flippers, and unemployed people.
In fact, the competitive fallacy in one form or another underlies a great deal of conservative economic thinking.
1) Doing A helps my business succeed. Therefore, for all businesses to do A helps the economy.
2) Doing B helps me (or my cousin or the kid down the street or whoever) get a good job. Therefore, if everyone does B, everyone will get a good job.
The reason why both of those are invalid thinking, and why I call this "the competitive fallacy," is because in each case, A or B is what helps the particular business or job-seeker to outdo the competition. If ALL businesses or jobseekers were to do the same thing equally well, then it would provide no competitive advantage for any one of them, and the benefit seen when just ONE business or jobseeker does it is lost. All that's left is the general effect of all businesses or jobseekers doing A or B, which may be good or bad.
Here are a couple of real-world examples not employing letters as placeholders.
1) A state provides low taxes and lax regulations to get businesses to relocate there. Businesses do so, getting a tax break and lower regulatory compliance costs. The competitive fallacy leads to the conclusion that lower taxes and lax regulations help business. But what if ALL states drop their taxes and regulations to the same level? Then no one state has any advantage over any of the others and the benefit to the state of doing this is lost -- while the cost in lost tax revenues and whatever damage the regulations are intended to prevent remains.
2) A jobseeker pursued extended education in a hot field, gets a master's degree, and improves his chances of being employed. He lands a great job. The competitive fallacy leads to the conclusion that all anyone needs to do to get a great job is go back to school and get a master's degree in that same hot field. But there are only so many job openings for holders of masters' degrees in that particular field, so if EVERY job seeker were to go back to school and get a master's degree, that degree would not provide a competitive advantage anymore for any one of them, and only three things would happen: a) the labor market for that particular job would be flooded, resulting in lower pay; b) the enrollment market for that educational specialty would become very tight, resulting in longer waiting lists and (perhaps) higher tuition; and c) we would end up with some highly educated janitors, burger-flippers, and unemployed people.
In fact, the competitive fallacy in one form or another underlies a great deal of conservative economic thinking.