• Skip to main content
  • Skip to header right navigation
  • Skip to site footer
Farnam Street Logo

Farnam Street

Mastering the best of what other people have already figured out

  • Newsletter
  • Books
  • Podcast
  • Articles
  • Log In
  • Become a Member
TweetEmailLinkedInPrint
Business|Reading Time: < 1

What Competition in Nature Should Teach Us about Markets

“Though the free-market faithful have long preached that competition creates efficiency, as if it were a law of nature, nature itself teaches a different lesson.”

No tree can afford to not compete in the height competition. However, if somehow the trees could arrange a pact of friendship to limit their heights, each tree, and the forest as a whole, could save energy. This is obviously not possible for trees, but if it were, Dawkins concludes, the “Forest of Friendship [would be] more efficient as a forest.”

Systems of self-interested agents, responding only to local incentives, can easily evolve energy-wasting, unfruitful competitions. Dawkins doesn’t make the obvious connection between free-market theory and freely evolved systems, but you should. Once a way of competing is established, it’s very difficult for individuals not to play along. If we let our economies imitate trees, and the majority of nature, in practicing unguided free competition, the results will often be suboptimal, for each and for all. Worse, we will miss the main benefit of being human, which is to use reason to coordinate better outcomes.

[…]

The way wasteful competition gets entrenched is a worrying example of an entire class of errors in which what passes for rational decisions can create undesirable outcomes. These include the tragedy of the commons, Prisoner’s Dilemma-type games, and Nash equilibria. Applying a narrowly self-maximizing logic yields suboptimal results for everybody.

Still curious? Try reading The Darwin Economy.

Read Next

Next Post:Freeman Dyson on The Difference Between Science and Philsophy Freeman Dyson, writing in The NY Review of Books: On quantum physics The essence of quantum physics is unpredictability. At every instant, …

Discover What You’re Missing

Get the weekly email full of actionable ideas and insights you can use at work and home.


As seen on:

New York Times logo
Wall Street Journal logo
The Economist logo
Financial Times logo
Farnam Street Logo

© 2025 Farnam Street Media Inc. All Rights Reserved.
Proudly powered by WordPress. Hosted by Pressable. See our Privacy Policy.

  • About
  • Sponsorship
  • Speaking
  • Support

We’re Syrus Partners.
We buy amazing businesses.


Farnam Street participates in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising commissions by linking to Amazon.