What is “Infracompetition?”
The word breaks down to two parts; “infra-“ meaning “within” or “below,” and “competition.” Yes, competition; the beating heart of capitalism. Something which will cease to exist soon if industry has its way. More broadly, “Infracompetition” refers to a phenomena taking place within many industries when participants stop competing against an objective absolute, and begin competing only internally among themselves.
Example by Question: Why doesn’t a single car manufacturer offer hundred-year warranties?
Is it because they can’t? Absolutely not. With everything we know about material science and engineering, it would be a fairly trivial task to build a car to last a hundred years without failure. At least, given regular service. I could probably do it myself. And I’m just some asshole with an arc welder and a truck.
But consider that truck: a 2013 Kenworth. For the past six years and 800,000 miles, it’s been pulling 80,000 pounds up mountains, around curvy canyon roads, through summer, winter, rain, snow and shine. True, it’s had regular maintenance; but apart from some (naturally) plastic trim bits, switches and electrical connectors, the Kenny’s been solid as a rock. Pulling 40 tons up Monteagle twice a week, for almost a million miles, this truck hasn’t suffered a single major mechanical failure. An incredible marvel of modern engineering, right?
No. Not really. The Kenny isn’t made of anything exotic. So far as I know, the highest tech material on it is the silicone weatherstripping. By modern car standards, it’s actually fairly primitive. And yet, this big, stupid chunk of iron and fiberglass has lasted almost a million miles without significant failure. Why can’t they do that with a pickup truck?
Because the components aren’t as “heavy duty?” Nope. Not from an engineering perspective. Strength decreases non-linearly with mass; the heavier something is, the more stress it puts on itself and interacting parts. A 50-pound hammer will crush plate steel; a 50 ounce hammer will barely dent it.
So, (for the most part) if you were to just scale the Kenny down to the size of an F-150 it would actually last longer than the Kenworth itself. Exact same truck, most of the same materials, same design; and it would last longer than the semi. Probably last three or four times longer than any pickup on the road today.
So, why doesn’t Ford just build that? Make thje next F-150 just a scaled down Kenworth? It certainly isn’t a lack of capability on their part. Any auto manufacturer could. The technology is nothing new or exotic. Is it production cost? Partly. They might have to use a few expensive or uncommon materials in place of cheap plastics. God forbid, maybe even metal.
But production cost doesn’t matter that much. Even if a million-mile truck cost twice as much to produce (it wouldn’t), it would still sell just because the value proposition is so high. Especially for fleet sales and professional users.
So, it’s not that they can’t build a hundred-year car, technically. It’s not even that they won’t, because it won’t make money. It’s that in a consumerist economy, value doesn’t matter. Only consumption matters. And because of infracompetitive cycling, everyone pays the price if someone rocks the boat…eventually, even the one who rocked it.
What Went Wrong Here?
Infracompetitive industries don’t compete against an outside standard. They only compete within themselves. Part of this goes back to the mathematical theories of a guy you may have heard of: John Nash. Who, to my understanding starred in a movie called “A Beautiful Mind,” while simultaneously leading a slave rebellion and working as a singing cop in France.
If you’ve seen A Beautiful Mind, you know the story of The Blonde. Five desperate college guys walk into a bar. They meet a group of five girls; four are fairly plain, but one is a smoking hot blonde in a red dress.
Of course, in the grand capitalist tradition, all five guys go for the blonde. But, here, John has his great revelation: if everyone tries to hook up with the blonde alone, only one stands a chance of success. Perhaps a smaller one than if her attention were focused only on one of them. But if they divide up, with each guy trying for a different girl…one guy stands a higher chance of landing the blonde, but everybody gets laid. The lesson here: The individual does best when each individual does what’s best for himself, AND the group.
Applying that same theorem to industry: Each individual company does best when it functions within a framework of its competitors. Acting cohesively, would-be competitors become cooperators simply by considering potential market disruptions to its competitors. Among comparably sized competitors then, a certain division of labor and acceptance of standard practices and technologies will inevitably emerge. Everybody understands, only one guy can get the blonde. So, stay in your lane, follow the plan and do what’s best for the group.
In other words, adopt an internal standard of “competition.” That way, everybody gets laid, without changing a thing about themselves or their approach. Unfortunately, that doesn’t work out too well for the rest of us. In consumer industries, anyway. That doesn’t hold true for all, though.
Why is Military/Industrial Stuff Better?
Dipping in a bit to our materials on Regulation being the Mother of Invention, consider this scenario: It’s 1939, and you’re a general trying to take the airspace over Iwo Jima. The Japanese have this incredible fighter, the Zero. It’s light, nimble, carries big guns and does 331 mph. It’s only weakness is that it’s almost completely unarmored. We need a plane that’s faster, has more guns, fires faster and can take a few hits.
Lockheed says “No problem. We’ve got this twin-boom design, freshly stolen from Howard Hughes. Does 414 mph, has redundant engines and controls, is almost as nimble as the Zero, has lots of big guns and doesn’t mind taking a few hits. We call it the Lightning.”
So, Lockheed proceeds to build the P-38, and goes down in history for producing one of the legendary combat aircraft on Earth. One whose spiritual successors, the SR-22 Blackbird and A-10 Warthog, are still my two favorite aircraft of all time. Let’s not talk about the F-35…okay?
How did they do it, though? By adopting an external standard. An absolute standard. Here are the specs, here’s what we need, give us what you got. And so one grand theft from Hughes later, they did. Because they were forced to adopt an external standard; they had to deliver based upon performance, not profit.
Which brings us to today.
Planned Obsolescence: The Death of Value and Innovation
There was a time not long ago when the notion of planned obsolescence was something of a conspiracy theory. It came from the 50s, about the time some of the first unibody cars came out, and immediately began rusting through to the core. It didn’t take long for savvy gearheads to conclude that they were “built to break.” That may have been true, or it may have just been bad engineering.
However, advances in computer engineering and material science through the 80s and 90s turned this “conspiracy theory” into a business model. And engineers are good enough now that they can calculate the lifespan of components nearly to the day.
It starts at the product planning phase. Planner says “Kia just came out with a ten-year, hundred thousand mile warranty. We need to do the same.” The engineers count how many times the crankshaft goes round and round in a hundred thousand miles, and the degradation rate of plastics over 10 years. They change the bearing alloy and plastic formulation to match at the lowest possible cost. And if the engineers have done their job correctly, then at 10 years and 1 day, the whole car instantly disintegrates like Elwood Blues just drove it.
This removes that car from the secondary market; with enough proprietary parts and tools, it costs more to fix than it’s worth. Then the whole thing goes to the recyclers to jet melted down and remade into a yet more perfected piece of overpriced garbage. Sold at four times the price. This is how consumerism functions now.
So, what’s stopping any large auto manufacturer from doing what Kia did some years ago, and disrupting the market with massive reliability increases? Acura did it with the NSX a few years prior, and Toyota before them. So, why don’t we see cars spec’d out with a hundred year warranty?
Because all large automakers know that such a car would spell death for the consumerist automotive industry. It would be the end of an entire business model. And any advantage to the offending company would be short-lived at best.
Say a comparatively small company like Subaru came out with a Hundred-Year Car today. The WRX 100. This would instantly catapult them into competition with much larger and better funded brands, operating in the same segment. And for a while, the WRX 100 would dominate that segment. But it wouldn’t last long, because three years later Honda would build a Civic 100 to match. Then Ford, Mercedes and Volkswagen. Soon, every car company would have one compact model with a Hundred-Year Warranty.
This would fairly quickly negate Subaru’s market advantage. And might actually end up putting them out of business. Because larger companies like GM, Ford and Volkswagen engage in massive platform sharing across marques. So, in a few years they’d all have not just Hundred-Year compacts; they’d have Hundred-Year sedans, crossovers, SUVs and pickup trucks.
Since Subaru (being the smallest of these manufacturers) cannot retool its entire product line to compete, sales drop and they go out of business. By disrupting the market for a short term advantage, Subaru has signed its own death warrant. Apart from co-investorship, this is how infracompetition kills innovation.
Unlike Lockheed, auto companies don’t operate against an outside standard. They deliver on profit rather than performance or objective value. They adopt internal standards relative to the greatest value, doing what’s best for themselves and the group.
This is Infracompetition.
Manufacturers aren’t building the best products they can; they’re building what will best maintain the market.
In a way, you almost have to appreciate the sort of John Nash approach here. By hook or by crook, all are incentivized to adopt the internal standard of competition, and avoid any major disruption to the market as a whole. Even if those disruptions would give smaller manufacturers a competitive advantage, ultimately it’s going to backfire as more moneyed interests catch up and surpass them.
Infracompetition is both a cause and effect of wasteful consumerism. With engineers daily perfecting the art of planned obsolescence, this industry phenomenon keeps us trapped in the neverending cycle of the Cheap Crap Game. By eschewing objective external standards of value, and adopting internal standards, Infracompetitive industries destroy innovation, hamstring the smaller competitors on which capitalism relies, and ultimately perpetuate their own self-destructive cycles of consumerism.
If we hope to break this cycle, we must institute regulations which apply an external standard of performance/value engineering. If we want to encourage innovation, progress technology and drive corporations to deliver the best product they can instead of just what profits the industry most…then we have to be the ones who institute performance and value standards.
Maybe we could start with the Hundred-Year Warranty.
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