Escalation or “Arms Race” is a feedback loop where increasing intensity is the only option for multiple participants in a system. The most obvious example of this is competitive exclusion, why just a few companies have the vast majority of government contracts. This anti-competitive behavior may be related to the drift to low performance.
From “Thinking in Systems” by Donella H. Meadows, which I a few weeks ago.
THE TRAP: ARMS RACE
When the state of one stock is determined by trying to surpass the state of another stock — and vice versa — then there is a reinforcing feedback loop carrying the system into an arms race, a wealth race, a smear campaign, escalating loudness, escalating violence. The escalation is exponential and can lead to extremes surprisingly quickly. If nothing is done, the spiral will be stopped by someone’s collapse — because exponential growth cannot go on forever.
THE WAY OUT
The best way out of this trap is to avoid getting in it. If caught in an escalating system, one can refuse to compete (unilaterally disarm), thereby interrupting the reinforcing loop. Or one can negotiate a new system with balancing loops to control the escalation.