While analogies, like cars, always break down eventually, they can be useful. While running, I thought about my injury-induced lack of racing trophies and my oxygen deprived brain tied this into the division of goods in capitalism. Hence, this analogy between running races and capitalism.
Both racing and capitalism involve competition, and this results in winners and losers. Winners are supposed to be rewarded while losers are expected to reflect on their defeat and try harder next time. When planning a road race or managing capitalism, those in charge must address the nature and division of the rewards. In the case of a road race, the race director must pick the prizes and decide such matters as whether there will be age group awards and how deep the awards will go. In the case of capitalism, those in charge decide how the rewards will be divided by laws, policies and practices.
While there are many ways to divide rewards, there are two broad approaches. One is a top-heavy reward system that yields the bulk of rewards to a few winners. In the case of a road race, this occurs when all the prizes go to the top three runners or even just the first-place finisher. In the case of capitalism, this will involve most of the rewards going to the very top winners with the few leftovers divided among the many losers.
Another approach is to spread the rewards more broadly among a larger base of winners. For example, many races divide up the groups by age and most races have male and female divisions. In the case of capitalism, such an approach would give less to the top winners and divide more among the other winners relative to approach that only rewards the top winners. For example, under such an approach successful small businesses and successful middle- and lower-class people would get more of the rewards. This would, of course, mean less for those at the top of the pyramid, such as the biggest corporations and billionaires. Success would still be rewarded, but there would be more effort in spreading the rewards across different levels of success (and economic classes).
One argument in favor of the top-heavy systems of capitalism is to contend that a broader division of the rewards would be socialism, and this would destroy competition. But this is not the case. A broader reward system would still be capitalism, it would just have a broader division of the rewards. Returning to the race analogy, a race that has a broader division of prizes is no less a race than one that offers prizes only to the first-place finisher. Competition remains, the difference is that there will be more winners and fewer losers.
It could be argued that having a broader division of rewards would reduce competition and somehow make things worse. In the case of a race, it might be claimed that runners would think “why should I train hard to win the whole race when I can get a prize for being third in my age group?” In the case of capitalism, people would presumably say “why should I work hard to try to be the biggest winner when I can get decent rewards for just being successful?”
While I will not claim that no one thinks that way, most runners still train hard and race hard regardless of what sort of division of prizes the race offers. The same would seem to hold true of capitalism. People would still work hard and compete even when there was no massive prize for a few and little for everyone else. In fact, people who know they have little or no chance at the biggest prize would presumably compete somewhat harder if they knew that they had at least some chance of getting a decent return on their success. Also, in the case of capitalism, people already work hard for small prizes when they know they have no chance of ever getting the biggest prize or even a bigger reward. As such, unless they are delusional or irrational, they are not motivated by having a top-heavy reward system. Survival provides adequate motivation for those of us who are not in the top .1%
At this point, one might bring participation awards, when everyone gets a medal for showing up. The economic analogy would be a form of socialism or communism in which everyone gets the same reward regardless of effort. This, many would argue, would be terrible and unfair.
In the case of races, runners still compete even if everyone gets the same prize (be it the same medal or nothing at all). Many people just love to compete for the sake of competition or race for reasons that have nothing to do with prizes. It would hardly be a stretch to think that this view also extends into the economic realm. There are people, such as open-source developers and community volunteers, who work hard for no financial rewards. But there is certainly a reasonable case that people need to win prizes to be really motivated to do anything.
I must admit that while I will still run hard in a race that has no prizes, I do love competing for them and prefer races that offer competition-based rewards. I am tolerant of participation medals because someone who runs a race has accomplished something meaningful. A race can have both participation medals and prizes for winning. In the case of an economy, this would be a competitive system that offered better rewards to the winners, but also provided those who are actively participating in the economy with at least a minimal reward. One area in which this analogy breaks down is that the economy has people who cannot participate (the very old, the very young, the ill and so on) and it would be a much more serious matter for these people to get nothing than it is for people who do not finish the race to not get their participation medals.