Opinion: We live in an era when markets are a dominating form of social organisation. We are in thrall to the markets, which dictate how we see the world. The language of markets intrudes into most spheres of life.
Markets have great potential for both good and bad outcomes. It is true that trading is a very human activity. So are reciprocity and co-operation. The three can even work together.
* Govt orders inquiry into anti-competitive land covenants
* Grocery legislation decreases competition, not the reverse
* Three grocery suppliers cautioned for price-fixing, forcing online store’s closure
Some fairly basic observations of economics are tied to competition in markets. Competition is considered the driving force of the best outcomes and seen as a “good thing” with many laws to create, protect, enforce or mimic its benefits.
But sometimes a focus on competition just gets in the way of the best outcomes.
I was struck by this during the week when my attention was drawn to a current Commerce Commission process. (I know, shut up, Rob, you will be in front of them one day. But too late.)
The commission has released a report on “Collaboration And Sustainability Guidelines”. Interesting choice of words. A better choice would have been “Cooperation” – the term “collaboration” can carry rather sinister overtones as in “traitorous collaboration with an enemy”. Maybe I’m reading too much into it.
Collaboration is not an unfamiliar term in organisation textbooks with multiple classifications and principles proposed but essentially it is about “people working together to create or achieve the same thing” (Cambridge dictionary). Sounds benign to me but if you have drunk the “competition is always best” Kool-Aid it flashes red warning lights.
We face many sustainability challenges. We all know that and though there are some who prefer to hide under the blankets and hope those challenges would go away – but most would think we should be trying to meet them.
We all have different tastes for how much of this response should be instructed, delivered, encouraged or subsidised by Government. But most would understand that voluntary actions taken by businesses might be a very useful part of it.
It is pretty obvious that to undertake such actions businesses would ideally work together to that end, to cooperate or “collaborate”. Any practical experience of business would tell you that this is essential. Firms might and do compete on their marketing of green credentials whether real or not. But in any effective response to our crises the best option will be working together to actually change business practices. Many firms know and would like to do this.
There would accordingly be surely some public confusion that the Commerce Commission is sufficiently moved by concern about this cooperative prospect that it sees fit to reinforce its “competition” credentials in response.
To be fair the commission does acknowledge (how could they not?) that some cooperation “may be helpful” in such areas as industry decarbonisation. It “does not want to unnecessarily deter” such actions but it warns that it “will not tolerate sustainability being used as an excuse for anti-competitive behaviour”. So be warned, work together to save the planet if you must, but always remember the prior obligation to compete.
There is then some really inventive word juggling to make incompatible things compatible. But the best insight is from this gem: Working together may be okay if “it does not impact on the dimensions of price, quantity, quality, service, choice or innovation that drive businesses … to compete”.
Well, sorry, commission, but that is a list of all the important things that might make a real difference to decarbonisation, for example. Meeting the sustainability challenges simply must include those very actions.
Incredibly it then suggests that “industry commitments to sustainability-related standards” might be at risk of challenge. For example if they were mandatory. How on earth do they imagine we are going to meet today’s challenges without such commitments?
Firms are even cautioned to be careful of cooperating to “not dealing with businesses that have unsustainable practices”, or even in some circumstances making an “agreement to share infrastructure with a view to reducing environmental footprint”. All such actions must bow before the over-arching God of Competition. But in the real world of business those are the very things which can make a difference.
Of course, the guidelines offer ways to test how any proposal to cooperate might breach or get authorised. This is the public service after all where more reviews, applications, exemptions are the daily diet. But the overwhelming impression is to make it harder, not easier, for business to work together to meet big social challenges.