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Well, the negative aspects of competition are the reason companies that make awards have made so much money on participation ribbons and trophies. In today's world of competition, if you can't be the best, everyone needs to be made equal.
Ben proves this in Chapter Eight when he passes out membership cards. These cards immediately alienate part of the group. Those holding the cards automatically see themselves as superior; those without find reason to hate; while those striving to be a part of the group will do anything they're told simply because they want to belong.
Note, the above applies to the chapter in question. I think competition is a healthy and natural part of life.