What the Patriots and NFL Parity Can Teach Us About Mega-Corporations

in #economics7 years ago

The Patriots have put together an unprecedented run of success in the NFL. They are about to play in their eighth Super Bowl in 16 years. Many say that their incredible run is made even more impressive because the NFL is believed to be in a time of parity between teams. But what if the opposite were true? What if the NFL's parity was the Patriot's greatest advantage?

The reality is that parity doesn't necessarily decrease the chances of a dynasty, and may even increase them. There's a limit to the talent, innovative thinking, and technical advantage available to go around football. And it is true that the more evenly these elements are spread around, the lower the odds of great teams arising. But what if one does?

If a team in a time of parity were able to find a truly significant advantage, perhaps something like the greatest coach and quarterback combination in the history of the sport, then their odds of success are quite good as long as they hang onto that advantage. The parity makes it harder for other teams to challenge the team with the advantage.

In the absence of the NFL's rules which favor parity, it's likely that other teams would find other advantages which might give them a better chance against the Patriots. The league as a whole might appear more lopsided, but there wouldn't be anything in the rules to stop any team from finding an advantage. That's why a league like Major League Baseball, notably less designed for parity, hasn't seen anything close to a dynasty like the Patriots in decades and hasn't had a repeat World Series winner since 2000. Even the Yankees' more recent success was limited to a seven-year run and not nearly two decades like the Patriots. Baseball has also seen small market successes like the Oakland Athletics and Kansas City Royals despite those teams being limited by much lower payrolls.

The Patriots' incredibly coaching and quarterback play has been a significant part of their success. But the NFL's rules favoring parity have also played a role in preventing quality opposition from taking them on. By trying to even the playing field, the NFL has inadvertently tilted it dramatically in the Patriot's favor. But that's by no means the only place we see this phenomena.

For years now, the mantra of many in the United States' government has proclaimed that their role is to "even the playing field" for the competition of business in the country. And worse, they seem to have, at times, honestly tried to do that. The tools available to them have been costly regulations and taxes. They've tried to set the "rules to the game" in a way that they believe will allow everyone to compete.

But instead of creating the utopia of competition that these meddlers and busybodies thought they were producing, they've created a circumstance that hinders competition and leads to the "dynasties" of business: massive corporations.

Large corporations are businesses that have discovered some advantage within the government's rules for parity. They've found their Bill Belichick and Tom Brady. And instead of allowing other companies to find their own advantage, rise up, and challenge those companies, the government has placed a bunch of barriers and obstacles in their way.

The result matches the Patriots. As the NFL team continues to rack up Super Bowl appearances and victories, these companies continue to grow larger and larger. And without the competition, the options available to consumers has been artificially limited. Just as it's time for the NFL to eliminate their rules in favor of parity and free teams to find their advantages, it's also time for governments to tear down the barriers to entry and allow real competition to return.

Only then will we see the end of large corporations and greater availability of choices for consumers. Free from government shackles, small- and medium-sized business will be able to tailor their offerings to what a smaller set of customers' desire. We'll move away from "one-size-fits-all" solutions that come from organizations built to harness economies of scale. And we'll see a boom in better-customized solutions that more closely fit our needs.

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