Friday, September 25, 2015

Modafinal, Steroids, and Competition

A recent discussion of a post on my favorite blog dealt with the implications of smart drugs, in particular modafinil. A number of people argued that the problem with permitting such things was competition. If one person uses them, others have to use them in order to compete with him, so you end up with whatever negative side effects the drugs have—modafinil does not seem to have many, but nobody knows for sure—and everyone in the same position as before.

That argument views economic competition as something like a football game, where one side wins and the other side loses—if you are not the best you are nothing. If that were true, most of the population of the world would be unemployed. Even without smart drugs, people vary in how able they are—they cannot all be the best.

Suppose the use of modafinal makes me 10% better at whatever I do. The result is not that someone with the same abilities who does not take it is useless, merely that I am ten percent more useful and so can expect an income about ten percent higher, whether my salary as an employee or my earnings if I am self-employed. I can decide for myself whether the additional income, or the additional leisure if I choose to work fewer hours instead of making more money, is worth whatever I think the risks of side effects are. If many people use smart drugs, some of the benefit might to go to other people either as lower prices for what the more productive workers produce or higher returns on other inputs to production. But somebody still gets the benefit of the additional productivity.

The source of the mistaken intuition is probably the analogous case of steroids in sports. There the right answer is less clear, depending on what it is that athletes produce. If what the fans care about is only relative ability, whether or not their team can beat the other team, then if everyone uses steroids the players are worse off—assuming significant negative side effects—and the fans no better off. If fans value absolute quality, enjoy watching athletes more the better they are, then the argument I have offered applies to that case as well. 

Not being a sports fan, I cannot offer an informed opinion on which is the case.

The same confusion between economic competition and sports competition shows up in one of George Orwell's mistakes. In a very interesting joint review of The Road to Serfdom and a  book by Konni Zilliacus, a left wing Labor politician, he wrote:
The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led ...
Which, fortunately, is not true.

[An earlier discussion of the same issues, not in the context of smart drugs]


At 6:33 PM, September 25, 2015, Blogger Arthur B. said...

People do compete for mates, and it ultimately drives all of our behavior, directly or indirectly.

At 6:46 PM, September 25, 2015, Blogger John T. Kennedy said...

I, for one, greatly enjoyed watching the baseball's all-time greatest hitter: Barry Bonds on steroids.

At 7:54 PM, September 25, 2015, Blogger David Friedman said...

Arthur: I think competition for mates is a possible explanation of why people often think in terms of relative rather than absolute outcomes. But if so, it's one of the ways in which evolution has hardwired a mistaken view into our brains, like our taste for sugar. Reproductive success is not my maximand nor that of anyone else I know, judging by behavior.

At 6:01 AM, September 26, 2015, Blogger Arthur B. said...

People certainly overestimate the importance of relative success in achieving other goals, and in that respect they are mistaken. However, they also value positional outcomes for their own sake. Evolution has hardcoded instrumental goals as terminal. It is no more mistaken to take pleasure in outcompeting others than it is mistaken to think that sugar tastes really good.

At 6:01 AM, September 26, 2015, Blogger Arthur B. said...

This comment has been removed by the author.

At 8:23 AM, September 26, 2015, Anonymous Scott Alexander said...

Although a model economy works that way, our own economy seems not to, and does contain a lot of discrete steps at which you either win or lose. See eg

At 8:25 AM, September 26, 2015, Anonymous Max said...

Races exist in real life, e.g.:
- The race to invent things (products, business methods, etc. Never mind patents, there are plenty of natural monopolies).
- The race to obtain information relevant to stock prices

More generally, outsmarting other people is a path to riches.

I'm not disagreeing with your conclusion at all, just your overly categorical dismissal of 'competition' as a thing.

At 12:39 PM, September 26, 2015, Anonymous Anonymous said...

@David Friedman

You say that reproductive success isn't your maximand, but since you have three children I think it's hard to deny that it was -a- maximand for you, at least at one stage in your life.

At 1:03 PM, September 26, 2015, Anonymous Mike said...

On the side issue of public health. If it was warranted to any bureaucracy to control who gets to improve the performance of their brain with a drug, by the same token it should be warranted the control over who gets to dull their performance by drinking alcohol.

What really worries me is not prohibition of "smart" drugs, but eventual obligation to use them. What if someone with and IQ of 70 is forced to use a certain drug, with the excuse of not being a burden to society, and that drug causes some never before seen harmful effect to this person? Who will compensate for that? Besides, in some cases lower intelligence people seem to be a blessing more than a burden for their caretakers.

Should people be forced to use the "dual n-back" game? Should people be forced to do aerobic exercise or weightlifting? Should people be forced to eat only vegetables, or, conversely, should vegetarian persons be forced to eat meat? Public health is the mother of all slippery slopes.

At 1:48 PM, September 26, 2015, Blogger David Friedman said...


If reproductive success were my maximand I would have had more children and have donated to a sperm bank.

Think about how many children a couple could produce and rear in our very wealthy society if that were their main objective. Surely at least eight, probably more.

At 8:57 AM, September 27, 2015, Blogger Jon Gunnarsson said...

Perhaps the clearest proof that most people do not maximise reproductive success is that sperm banks have to pay men for their donations. I men actually tried to maximise their reproductive success, they would be willing to pay for the privilege of donating their sperm.

At 3:56 PM, October 05, 2015, Anonymous Anonymous said...

@David Friedman

I only meant to imply that you have played this game, even if not to the exclusion of everything else. And so has everyone else who has a partner and/or children. Or, I suppose, even everyone who has had any sexual or romantic experiences at all.

While I agree that competing for mates is small enough part of peoples' objectives that most of our efforts are not zero-sum, it's certainly not an irrelevant holdover that nobody is interested in anymore.

At 12:17 PM, October 06, 2015, Blogger David Friedman said...


I agree that mate competition still matters. On the other hand, to the extent that the improved performance due to a smart drug improves your value as a mate, the person you eventually end up with is getting more as a result, so it still isn't zero sum.


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