Last month I went to watch the World Athletics Championships. Americans love their football and basketball, but track and field and Olympic sports have a special place in my heart. At world championship level, these sports are carnivals of excitement, inspiration and wholesome national pride. On display are individual and team talent, ambition, hard work, focus and (eventually) a little bit of ego – the human qualities that create excellence.
Have you ever wondered why free markets work better than the alternatives? For one answer, look at sports like track and field. Athletes can specialize in the sports for which they are suited. This is a great thing. Ethiopia’s Tamirat Tola, who weighs 59 kilograms, won the men’s 26.2-mile marathon with a time of 2 hours, 5 minutes and 36 seconds. Worth noting: Tola’s first-place marathon medal gold weighs as much as Ryan Crouser’s shot put gold medal. The big American weighs 145 kilograms, which is equivalent to two and a half Tamirat Tolas.
Track and field and Olympic sports inspire us precisely because they feature a wide range of human body types and talents. High jumpers are tall and lean, while sprinters are muscular and lean, built for explosive kicks. Hurdlers are as flexible as ballet dancers. Swimmers have broad shoulders and a long torso. Female gymnasts rarely stand taller than 1.5 meters. Alpine skiers are as cool as astronauts, at peace with moments of mortal danger, as are pole vaulters. Long-distance runners, swimmers and cyclists are stoics.
Why does capitalism work? Instead of sports, let’s turn to Adam Smith’s comprehensive book The Wealth of Nations. Smith noted that societies flourish when individuals are free to bring their talents to market and exchange their labor for the labor of others. This way, a talented leather bootmaker can strive for excellence in bootmaking and not worry about making the glass for his shop windows, which is the handiwork of a glazier. In free markets, one plus one is greater than two.
Even today, countries thrive when their people and businesses are free to pursue the excellence of their choice. A mathematically gifted but shy teenage girl, her human worth should not be judged outside of her natural talents—say, kickboxing. Tola, an Ethiopian marathoner, would be mediocre if measured by his backstroke skills or how far he can throw the discus.
The division of labor—the sharing of talents and abilities—is essential to a society of invention, growth, and prosperity. But no matter how true Adam Smith’s theories have proven to be, politicians and business leaders confuse the idea with depressing regularity. Their job is simple: to allocate capital, technology and people to produce profitable products, happy customers who want more, inspired and continuously learning employees and supportive communities. Capital is exchangeable. Technology is universal. This leaves people to distinguish between success, mediocrity and failure. People will always be differentiators.
Few understood this better than the great architect of Singapore, Lee Kuan Yew. He saw Singapore as a pool of talent, located nearby and around the world, free to excel under the rule of law, fueled by education and unencumbered by corruption. The post-World War II Japanese miracle was led by extraordinary business heroes who studied the world’s best practices (eg Toyota’s adoption of Six Sigma quality standards). South Korea became a world-class manufacturer of cars, electronics and pop music.
For companies and countries to thrive, they must become marketplaces for talent discovery. Perhaps they draw inspiration from athletics or the Olympics, where large numbers of people can discover their talents and strive for excellence.
