I wrote about the three existing varieties of capitalism last month. Now I’m going to focus on a concept from evolutionary ecology, which is the r/K selection theory, pertaining to the tradeoff between quality and quantity in reproduction, after which I will detail its connection to business.
First, I should focus on the pure ecology. An r-selected organism (r-strategist) is one that has lots of offspring, but most do not survive. For example, a spider that leaves a brood of hundreds of infants, most of which will not live even a day, is an r-strategist. On the other hand, whales and humans, with their long gestation periods and high parental investment, are much closer to being pure K-strategists: few offspring, high quality. In reality, almost none of the higher animals clearly fall into one category or the other: mammals, perhaps notoriously, show adeptness at both r- and K-selective sexual strategies, with males and younger animals more r-driven and females and older animals more K-favoring. For an animal to have both impulses is most adaptive to nature because the two drives serve different purposes. After a population crash or calamity, the r-selectors will repopulate the quickest; when the population is near or at capacity, however, K-selectors have the advantage. Since both classes of circumstance have occurred over the millions of years in which complex life evolved, both strategies are part of our heritage.
One thought, that I’ve always thought credible, is that the emergence of high intelligence in mammals is, at least in part, an artifact of an arms race between two opposing sexual drives. Humans clearly have both r- and K-strategic sex drives, and much of the narrative of morality as civilizations have evolved is about the tension between these two. The r-selective sex drive (Freud’s id) just wants to spread seed as far as it can go; a hundred offspring would be desirable, a thousand is even better. The harem-holding kings and pharaohs of antiquity were notorious r-strategists. On the other hand, the K-strategist invests highly in a small number of offspring (in ancient times, “a small number” might have been 5-10). K-strategists tend toward monogamy: if one is optimizing for quality of offspring, the best strategy is to find one high-quality partner and treat that person and the children well. K-selectors were the first monogamists, but also civilization’s first architects. An r-strategist doesn’t care about social stability, because the general assumption is that with a few hundred offspring, some will thrive no matter how damaged the environment becomes. K-strategists, on the other hand, want social progress because a fair, reasonable, predictable, and progressively improving society is the one in which quality offspring have the best chances. (Damaged environments are much more random in what they reward and punish.) Finally, the first feminists (male and female) were K-strategists, which is one of the reasons why Sex and the City pseudofeminism is so clearly inconsistent and laughable. Monogamy, democracy, feminism, and social justice all come from our K-selective halves; the r-strategist within us doesn’t give a damn about any of that.
Most religions portray the more ancient r-drive as “evil” (or, at least, sinful) and the K-drive as “good”. I don’t think it’s useful to categorize nature that way. We are animals, and what makes good or evil has more to do with our ability to reflect on, and filter, our impulses than what they are or where they come from. When the species is threatened and the environment is damaged, it’s r-selectors who help it bounce back. If nine-tenths of the male population were killed in a pandemic, moral reservations about polygamy would vanish as humanity struggled to recover. On the other hand, a stable society views the impulsive, present-focused r-selectors as a parasitic nuisance, and people who are extreme on the r/K spectrum are given the name, “psychopath”, because they fit so poorly into a cooperative, peacetime society.
Memes!
In the world of biology, the delineation between r- and K-selection is not always clear. Trees, for example, distribute lots of seeds (r-strategic) but the adult organism is an extreme K-strategist– designed to live for centuries. Every organism would prefer, of course, to optimize quality and quantity both– it’s only when they trade off against each other that we can discern an specific character– and it’s not clear that specific species favored one or the other, with most advanced species relying on both. In the world of memes, however, we find that there’s much more separability. A biological organism is a complex beast (literally) formed by r- and K-pressures over millions of years; but memes are simpler, and it’s usually easy to tell an r-meme from a K-meme. They are utterly different in character. Many memes are formed consciously, and some are built to grow rapidly (“go viral”) and become fads, then pass away. Others are designed for longevity and cultural impact. The Wire and Mad Men are TV shows that were clearly not built to achieve the highest ratings; they were built for quality and longevity, and people will still want to watch them five decades from now.
Much of what we do in civilization is reproduction of ideas. Laws form as people replicate what they consider to be the fairest means of dispute resolution, rehabilitation, protection of society, and (when needed) punishment. Religion and culture emerge to reproduce successful ideas, and r- vs. K-selective tensions are evident there. Some religions want to grow in membership and are willing to tolerate dilution of the message (r-selection). Others grow conservatively and work aggressively to prevent dilution or evolution in the core ideas (K-selection). Then there’s business. Guild systems are K-selective, insofar as they attempt to mandate quality in the trade (admissions, market manipulation to prevent “race to the bottom” dynamics) at the expense of growth. For example, the advisory “bottleneck” in graduate schooling (a gestation period) is a K-strategic invention. However, these systems tend to be brittle in the face of a competitive global market.
Without explicit manipulations and traditions, business tends toward radical r-selective behavior. A manager might give 15 reports, making it impossible for them to be adequately mentored. New hires are not treated as valuable initiates to a guild or tradition (and possibly put through a painful but controlled “hazing” process) but, rather, treated as utterly marginal members of zero credibility and value. Being hired into the company means nothing; they have to prove themselves once there. Most companies, despite saying otherwise, would rather grow rapidly and dominate a market, at the expense of personnel quality and mismanagement, than grow at a controlled rate and risk second-rate status in the market.
What’s right?
While the impulse to associate K-strategies with “good” and r-selection as “bad” is strong in civilized people, we have to avoid that, especially when analyzing business and technology. There’s no clear right or wrong. Consolidation, obsolescence, declining reputation, and adverse market changes can kill off small players (K-capitalists) of even the highest quality, meaning that the “get big and moralize later” mentality of the r-capitalist is sometimes the only thing that works. Additionally, it’s not clear to me that business K-strategists, as a class, have any real moral high ground. I have plenty of friends working in non-profit organizations (professed K-strategic companies) and the politics in them are just as vicious and mean-spirited as in for-profit corporations– sometimes worse, because of resource scarcity (cf. academia). If I’m going to be a subordinate, I’d rather work for someone “greedy” (r-selective) who will promote smart people who make him money (creating some semblance of meritocracy) than a “visionary” (K-strategist) driven by ego alone.
All that said, there is something dissatisfying about the dominant r-capitalism of the modern corporate world. Organizations that exist only to grow their own shares of society’s resources are not inspiring places to work. No one who is 22 wants to be “working for money” at age 50, or even 30. One knows, every day, in such an organization that it will do whatever it sees as being in its best interest, including terminating one’s employment on whatever terms favor it most. The r-selective corporation feels cold and soulless and, in fact, it is that by design. Its only purpose is to replicate a set of known business processes– admitting declines in quality due to environmental heterogeneity, resource issues, and regression to the mean in the quality of involved people– as far as at least one iota more is gained than spent. It’s a machine making copies of copies of copies that doesn’t stop copying copies until the last replica is utter junk– worth less than the material used to make it. By that point, most of what it has produced is of near-zero value, and since undifferentiated stuff (e.g. garbage, unwanted possessions, pollution) is of negative value, this often means harm will be inflicted on the world if externalities are present.
Nonprofit organizations, in theory, are K-strategic organisms. They serve a social purpose other than the profit motive. The problem with them is that they tend to operate in ways that are out of tune with what the market will reward (or, more bluntly, most are losing money). In business, K-strategic work is often thankless: the rewards come back in the long term, and are mostly enjoyed by other people. We see this in the macroscopic sense (R&D work often pays off a hundredfold or more to society, but the sponsor is likely to break even in terms of value captured) but it’s also true in the microscopic world of personal ethics. The r-operating manager gets credit for the work of 15 people; the K-strategic mentor improves the employability of her charges, relying on their loyalty to enjoy any gains. The problem with the non-profits is that they’re often so economically marginal and dependent that these constant stresses push them toward r-selective behavior (e.g. “publish or perish” in the university industry) on the inside. The meltdown of academia (both in terms of its job market, and in terms of the quality of what’s been produced over the past thirty years) is a case study in this. Existential threats force any organism toward r-strategic behavior, and nonprofit organizations are no different.
So far, we’ve looked at large corporations that are inherently r-selective, and the nonprofit world, in which daily financial pressures can create an r-selective flavor in spite of K-oriented macroscopics. What about small businesses? Unfortunately, most of those are cash-strapped as well, fighting constantly for survival.
Then there are Silicon Valley startups, the worst culprits in terms of inconsistency between a K-selective message (“change the world”) and r-strategic behavior. These young, brash companies have done a great job of marketing themselves as an alternative to Corporate America when their actual purpose is either (a) to become one of those corporate beasts in record time, or (b) assimilate into the existing phalanx on favorable terms for the founders. In fact, they’re far from an antidote to the negatives of r-strategic corporate capitalism; with venture capitalists as their real executives, they’ve managed to copy many of its worst attributes and behaviors.
Is there K-selective capitalism?
Now, let’s study the 3 dominant capitalisms from an r/K-selection approach. Supercapitalism and corporate capitalism are both r-selective, winner-take-all, sharp-elbows ecosystems, and unapologetic about being that way. This is also why the “faceless” corporations and equally faceless manipulators behind supercapitalism get such a negative name. Terms like “global elite” and “multinational corporation” underscore the parasitic and anti-patriotic nature of these powerful but disfavored capitalisms (reviled by both left and right, tacitly embraced by the meek center) that have no community or homeland, and generally harm (exploit) their neighborhood, then pull up stakes and move to another one.
An r-selective corporation doesn’t stand for anything, but it often provides– and often more importantly, distributes– a commodity with incredible efficiency. U.S. Steel and Standard Oil didn’t have missions– neither does Exxon-Mobil or Bank of America– but they served up their respective commodities so well as to become indispensable to society. In an r-selective firm’s maturity, it is best thought-of as a utility. The innovations are done, rewards for risk-taking and creative thinking have been distributed, and the only rewards left are those for office social climbing (which can be done in a capitalistic or governmental bureaucracy). If one firm dominates the space, as often occurs in a natural monopoly, there will be pressure to nationalize it, which is an assertion that, although the process, now well-studied, may be extremely valuable, the capitalistic enterprise surrounding it has ceased to be of value. Government is preferred by many societies to handle such utilities because, while some governments fail at doing so, governments can be K-strategic in behavior (purposes like social justice, widespread education, infrastructural quality and stability are K-selective aims at which governments have seen some victories– as well as hideous defeats). In fact, it might be only governments that can operate in a K-selective way at a certain scale (but I tend to doubt that).
Broadly speaking, war favors r-selectors while peace favors K-selection. When there is stress and turmoil, that which can replicate quickly tends to fill gaps first. Qualitative refinements tend to win out amid stability and prosperity, when the produce of the r-strategist is viewed as unwanted congestion; but scarcity creates an environment in which r-players thrive. The issue in the broader world, however, is that r-strategists can easily make war if they wish. War and distrust seem to be more entropic states that are, quite often, easier to bring into existence. It is not clear whether it’s best for business to be in war or peace, but the r-selective firm has a clear advantage over its K-selective rival, which is that it’s (at least from theoretical first principles) easier to create the warlike environment in which the r-strategist has the advantage. K-selective capitalism seems rare, and perhaps unfit, and that might explain why it is practically never found at scale.
Yeoman capitalism, for its part, certainly tries to be K-selective. The yeoman capitalist enters business for the challenge, to improve her lifestyle, to give something back to the community, or because she genuinely enjoys the work. While the r-strategic capitalist wants to gets as much work out of people for as little as possible, the K-strategist genuinely wants to improve the lives of her customers and employees, and to provide a service or product of superior (even artistic) quality. The issue that these yeoman capitalists face, however, is that they’re often under perennial existential threat. Larger, r-strategic enterprises might descend and make war.
A possible 4th capitalism?
Each of the three capitalisms that I described has shortcomings. I’ll attempt to explain why a fourth alternative might be forming in the technology industry. Let’s look at each from whether it is local or global, and also whether it’s r- or K-selective.
Corporate capitalism is global and r-selective. It is global insofar as the corporation will attempt to engage with any market, employ people at every talent level, and exploit every resource to which it can gain profitable access. It is the only capitalism of the three that can provide anything resembling universal employment, because it will find a place for everyone, excluding (for a moment) the matter of a minimum wage. If illegal enterprises (such as drug empires) are included, it finds positions (as street-level drug dealers, perhaps the worst job ever due to its pathetic pay and extreme danger) even for the otherwise unemployable.
Supercapitalism is local and r-selective. Its aims are power, fast money, rapid growth and proliferation, but it only wants to employ the elite. Investment banks and VC-funded startups take nothing lower than the upper-middle class. Prestige and reputation are too valued by the supercapitalist, who relies on those assets for maximal access to manipulation, for such a person to mingle with the larger and dirtier (and far less prestigious) world. A supercapitalist will exploit an opportunity as far as it can go, so long as personal reputation remains intact. That emasculating insistence on reputation management renders the supercapitalist’s reach limited and furtive; thus, supercapitalism will never be able to dominate daily life as corporate capitalism, in the U.S., has from about 1920 to 2025(?).
Finally, yeoman capitalism is K-selective but local. The yeoman capitalist has a vision and purpose other than making money (because most yeoman capitalists would make more money, and certainly enjoy more security, if they closed shop and got regular jobs). These lifestyle businesses don’t scale– they’re not built for that– and the unfortunate side effect is that they’re always exposed enough to corporate intrusion that freedom from immediate existential threat (as enjoyed by established companies) never occurs. Yeoman capitalism will never go beyond the local scope because it relies both on high talent and starting capital, and the percentage of people who have either is already small, but the proportion who have both is tiny.
Can there be a more globally oriented K-selective capitalism? Right now, the global and K-selective mentality has been the province of governments and nonprofits. I think that there’s quite a large need set (especially pertaining to peoples’ aesthetic and creative needs) to which both have failed. It might be where each sits with regard to short-term risk; nonprofits are too constantly under the gun– constantly raising money– while governments tend to be cushy, established, and legacy-bound. There might be a happy middling ground between those two cases into which a highly innovative but K-strategic capitalism (focused on quality of innovation) could move.
Technology, however, is starting to see changes that result from talent’s leverage (relative to property; as there are really only two important commodities in the world, property and talent, also known as past and future) reaching a historic high. Companies like Valve and Github are experimenting with low-overhead management styles and open allocation. Companies are gradually figuring out that it’s impossible to truly employ top talent; you sponsor it for a while. If you invest in a talented person’s career– and the open-allocation strategy is to hire mature self-starters already capable of investing in their own career (and kicking back things of value to the firm) given full autonomy– you might get that person to stick around for 5 to 10 years. If you don’t, the Dead Sea Effect will set in rapidly.
Except in R&D labs with high levels of autonomy (e.g. Xerox PARC, Bell Labs) there was just too much difference in bearing between top talent and corporate life for them ever to get along. Corporations can’t hold the best people unless they give them (a) 20-percent annual increases, which is expensive, (b) extremely high levels of autonomy, which can be politically expensive, or (c) rapid promotions, which are both economically and politically expensive. Corporate capitalism’s objective is to draw a profit from whatever opportunities are in reach, and often this means taking the middle territory at the expense of the excellent minority. Yeoman capitalism might be a better home for top talent, but its scaling problems and the scarcity of the substrate (resources, funding, connections) combined with top talent’s existing rarity make that match a bit of a split-maze problem; things that require two uncorrelated scarce resources in conjunction rarely happen. Supercapitalism typically courted the top talent that was unsatisfied with the slow career progress (seniority systems) and general mediocrity of the typical corporate world, but something is changing in that. The internet, and the increasing willingness of people to be honest about what they’ve seen in their careers (see: Hacker News) has created a memory. That’s a problem for supercapitalism; the sterling reputation it must maintain in order to operate, in contrast against the short-sighted and often anti-social behavior coming out of its r-selective charter (get big fast, acquire power, dominate) means that its interests are best served by a world of short-lived and unreliable memory, allowing advertisement to rule the day. VC-funded so-called “technology” companies are, for related reasons, often thrived on account of their marketing rather than technology– if they were well-marketed, they could get talent later– but the existence of an independent memory (on the Internet) threatens that.
Supercapitalism, for its part, is not having trouble getting top talent. Smart people sign up to work at hedge funds and VC-funded startups every day. It’s only going to get somewhat less of it– and paying a lot more– as the years pass, as the most talented people increasingly favor K-strategic ways of doing business. Supercapitalism isn’t going to roll up and die– not even close– and it will continue to make places for talented people. It will just, increasingly, not be the only place for top talent to go.
What remains is more of an open question than an answer. In a world where top talent is sponsored rather than employed, and in which “the vision thing” actually matters, what will the K-capitalism that grows up look like? Who will be in charge in the new world? I have no idea, but I know that we won’t get our answers from the established players– the venture capitalists and existing corporate dominators.
