The Competitive Fallacy

Discussion in 'Politics' started by Dragon, Dec 16, 2011.

  1. Dragon
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    Dragon Senior Member

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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.
     
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  2. Photonic
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    Photonic Ad astra!

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    There are exceptions to this fallacy.

    Technical degrees are always welcome.
     
  3. asterism
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    asterism Congress != Progress

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    Number 2 is more of a liberal view of economics, that's where all the hubub about federal student assistance comes from. Your points are valid, but it's not only conservatives that have this perspective.
     
  4. Dragon
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    Dragon Senior Member

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    No, that isn't an exception and no, they're not always welcome. They're just in short supply at this time. But what if literally EVERYONE in the U.S. had a technical degree? Can literally EVERYONE find a technical job? (That's not even considering the variance in technical aptitude and talent that makes imagining such a thing downright shudder-worthy.)
     
  5. Photonic
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    Photonic Ad astra!

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    After seeing the effects of public funding of schools being cut from California first hand. I realize that federal student assistance is ABSOLUTELY NECESSARY FOR THE FUTURE OF OUR COUNTRY.
     
  6. asterism
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    asterism Congress != Progress

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    Not the current model, that's what has devalued Bachelor's degrees. It's no longer unique so it's not the guaranteed route to a good job. What's the purpose of having federal subsidies for fields of study not in demand? How many History majors do we need? Lawyers? MBAs?
     
  7. Photonic
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    Photonic Ad astra!

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    Perhaps I should rephrase, we need more funding for people to get technical degrees. Engineering, mathematics, Physics, etc.
     
  8. ladyliberal
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    ladyliberal Progressive Princess

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    I have to agree with Asterism. To me, both forms are examples of over-generalization and over-extrapolation. While I certainly do notice more when conservatives do it, that's at least partly because I disagree with them. It's not clear that this type of fallacy is more common in more conservative philosophies or persons.
     
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  9. Douger
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    Douger BANNED

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    Here's the bottom line. Research 500 employee companies, in the real world, and compare "profit" per employee.
    When stockholders are more important than the employees, the competitive edge is lost and employment drops like a rock.
    These stockholders will cheer for cheaper labor or robotics and invest like a crack head for more elimination of " human intervention" to accomplish the needed tasks if, in the long term, it will increase profits and dividends.
    It's just capitalistic business.
     
  10. asterism
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    asterism Congress != Progress

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    Currently, yes. I remember Engineers driving taxicabs in the 1980s. There weren't many jobs for them. That said, any federal program that sets the bar that high will never be accepted by liberals. Too much math.
     

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