«Competition is for losers» in front of a 17-film competition

Peter Thiel is not in Locarno and is not announced. What follows is a comparison between two ways of thinking about competition, one set out in a 2014 essay, the other built into the workings of a festival.

In September 2014 Thiel published a piece in the Wall Street Journal titled "Competition Is for Losers", later taken up in the book "Zero to One". The central claim is that competition destroys profit and that monopoly is the condition of every successful business. To compete is to do the same thing as others, and whoever does so will watch their margins erode.

The 79th Locarno Film Festival is built on the opposite principle. It comprises three competitions, twenty awards and eleven sections. Seventeen films are contesting the Golden Leopard, sixteen run in Cineasti del presente, and more than thirty short films are divided into three separate competitions.

What is gained by setting films against each other

The obvious objection is that the two cases are not comparable, since an investment fund seeks returns and a festival hands out recognition. The comparison nonetheless holds on one precise point, namely what competition produces.

In the market Thiel describes, competition is destructive because the competitors are substitutable. If ten firms sell the same product, the price falls and none of them earns anything.

A film competition works for the opposite reason. The films in the running are not substitutable, and none of the seventeen titles could take another's place. Putting them on the same list does not make them interchangeable, it makes them comparable.

What the festival extracts from competition is therefore not a price but attention. A Hungarian or Singaporean film that lands on a list of seventeen titles gains readers, buyers and programmers it would not otherwise have reached, and it gains them even if it does not win.

It follows that the economic function of the competition is close to the reverse of the one described in the essay. Competition between identical products destroys value. Competition between distinct works creates it, because it builds a provisional hierarchy in a field that would otherwise offer no bearings.

One point remains where the two readings meet. At Locarno too the prize is in the end an exclusive advantage, and a Golden Leopard opens doors that stay shut to the other sixteen. The difference is that the advantage cannot be defended: it lasts a season and then has to be won back with another film.