The Reality Show Economy

On a typical “reality game show”, one contestant is voted out each week or round.  Some examples are “Survivor”, “Big Brother”, and “The Weakest Link”.

You can’t win without backstabbing people.  However, that is not a model for sane human behavior.  In a healthy economy, it would be important to build long-term relationships.  The loss of the relationship would be greater than the one-time gain from cheating someone.  On a reality TV show, you never have to deal with the other players again after the show is over.  There’s no long-term loss from cheating someone.

Many people take the attitude “There’s always someone else to con.”  If you unfairly reject a good job candidate, there’s always someone else.  If you squander lots of money and do a lousy job, you can always con someone else into hiring you.

In an economy of mostly anonymous people, there’s no penalty for cheating someone.  You deal with someone once for one transaction, and then never deal with them again.  In such an environment, dishonest people thrive.

Libel laws favor dishonest people.  If you are cheated by someone, you may be reluctant to publish the information, out of fear you may be sued.

In a reality show, the most athletic or smartest person is frequently voted out early.  The other players have to get rid of the strong players early.  Otherwise, they might win each immunity round and make it to the end.  On “The Weakest Link”, this was very flagrant, where the smartest people were voted out early.

This also happens in the economy.  A boss doesn’t think “This candidate is smart!  I want him working for me!”  The boss actually thinks “This candidate is too smart!  I have to reject him.  Otherwise, my bosses may decide to dump me and keep him.”  The best employees are “voted off” by managers trying to protect their turf.

This also applies when a new boss takes over a group.  Instead of identifying the smartest people and keeping them, a new boss usually gets rid of the best employees, because he sees them as a threat.

In a reality show, the strongest players are “voted off” early.  In the corporate world, the strongest employees are “voted off” by management.  In a reality show, you can’t win without backstabbing people.  In a corrupt corporate world, dishonest people have a huge advantage over honest people.  Without a free market, there’s no penalty for inefficiency.  If the managers from every corporation do the same thing, they’re not at any competitive disadvantage.  Without a free market, people can start a new business to compete with the established State monopoly.

Instead of workers cooperating, the economy is run like a reality show, where everyone is trying to backstab each other.  Coworkers and subordinates are seen as competitors, rather than as people there to help get the job done.

2 Responses to The Reality Show Economy

  1. If that manager-behavior is more likely to result in promotion than the opposite (which certainly seems to be empirically verified) then senior managers in large corporations, who have risen through the ranks (either of their corporation or of other corporations) are highly likely to behave in this fashion.

    Start-ups are likely to be the exception – startup founders are not subject to being replaced from below, because they are owners, and they compete company-to-company, rather than for promotion within their company.

    This seems to be an adequate explanation for the lifecycle of successful companies.

    • Actually, startups can be even worse. A computer illiterate owner can hire someone incompetent to implement version 1.0. They can burn through a lot of capital, especially if the founder or VCs have deep pockets.

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