It's 2015. US health care reform sputtered out. The Obama Presidency turned out to be a corporate shakedown in permanent residency. So the average American had three health care options. First, pay for local "health care" that offered little authentic value. Second, remain uninsured. The third is what most people chose: the constructive option.

As it turned out, the biggest threat to the American health industry wasn't legislation: it was radical innovation. Canada's Open Health Plan — where anyone could buy access to Canadian health care — took 12% of US market share by 2012 alone. The UN's Global Obesity Credits framework sharply strengthened the financial incentive for Americans to go international.

Yet those were just two events in a larger trend. A wave of startups — often public-private partnerships — from Canada, Germany, Mexico, and India, eviscerated the moribund American health care market. Why pay half of $130,000 for a bypass on an American "insurance" plan when you could pay just $10k to 20k elsewhere? For most people, the third way was the obvious, ethically correct, and most enjoyable choice. The ultimate result? A run on American health insurers.

The scenario I've outlined above is radical — but it's also real. US medical tourism is growing by leaps and bounds. Yes, it has its problems — but its value proposition is deeply disruptive. And crystallized within it is a deeper lesson about 21st century competition.

John Maynard Keynes once famously said: "For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still."

Lord Keynes, your century's up. 20th century competition hinged on the idea that unbridled greed, naked self-interest, and coercion were the essential drivers of growth. But last year's market collapse demonstrated the fundamental incompatibility of those ideas with an interdependent world.

For the next hundred years, we must say to ourselves: "fair is fair, and foul is foul. Avarice and usury are yesterday's fallen idols, and peace, equity, and meaning are our new gods. How much can we change the world radically for the better?"

That's what constructive competition is — and here are its four rules:

Higher-order innovation, not unnovation. In the 21st century, even a mandate from the US government isn't going to be enough to protect the profit margins of health care monopolists. The opportunity cost of protecting your local market is never learning how to create a globally relevant product, service, or solution: unnovation comes at the cost of authentic innovation. American health insurers have stopped innovating, in the name of operating efficiency — but the rest of the world hasn't. In fact, medical tourism isn't just a product or service innovation, it's an institutional innovation; the most disruptive and highest-order form of innovation organizations can choose today.

Thick value, not thin value. The monopolists' curse is thin value — just ask Microsoft, record labels, big media, Detroit or, in about three years, health insurers. But thin value cannot hold in an interdependent world. No one wants to get taken to the cleaners — and in a hyperconnected world, fewer and fewer will have to. Wherever there is thin value, people are always ready and waiting to flee to thicker value, leaving organizations that can only create thin value to collapse suddenly. Banks learned this lesson the hard way: they fled from one another until there was no one left to flee to except Helicopter Ben Bernanke. And Bernanke's bailout is no panacea. What happens, for example, when Indian banks decide that its time to build capital markets that create thick value? Bye bye, Wall Street.

Awesomeness, not lameness. Yesterday, entire industries spent fortunes conceiving "business models": cleverer and cleverer ways to profit from locking buyers and suppliers in, and locking competitors out. That's just another word for economic tyranny. The days of "business model" fascism are over. In the 21st century, there are no iron curtains that can hold keep people or organizations caged for long. There are no sandbars that will hold back the tsunami of disruption that is attacking lame, brain-dead industrial era business from every angle. The question today isn't about business models — but about awesomeness. How awesome is what you make?

Ethics, not extraction. Think lobbying's awful — but smart? Think again. Lobbying's not just ethically questionable; it's also strategically self-destructive. For health insurers, banks, and energy producers alike, lobbying is a major strategic error. Consider, for a second, the wages of lobbying across industries. It has destroyed Detroit, rendered telcos impotent, sapped the vitality of agriculture, and caused insurance and real estate alike to implode.

But the most haunting example is pharma itself: by lobbying hard for subsidies and patent enforcement, what strategic outcome did pharma incumbents realize? A deluge of global low-cost hypercompetition, that has left incumbents shocked, stunned, and stumbling.

Why has lobbying backfired on all these moribund industries? Because asking to be insulated from competition saps incentives for innovation — and sharpens incentives for disruption. In health care, for example, lobbying will simply continue to intensify incentives for governments and radical innovators alike to see sluggish, lazy American insurers and producers as ripe for disruption. The tired, lame games of 1.0 strategy merely prevent organizations from learning the lost art of awesomeness. In the 21st century, ethics is the foundation of next-generation strategy.

Fire away in the comments with question, criticism, or thoughts.

The Defense Department is due to report to Congress that in Afghanistan, U.S. troops continue to be outnumbered by private contractors. The contractors are described as performing auxiliary duties so that military personnel can focus on core tasks. Sound familiar? How many companies do you know that have outsourced "non-core" activities to focus on its "core competence"?

The trend is popular in information management, as new technology has made outsourcing that task easier. Software programming, data entry, processing, and storage, and such tasks are now routinely done by contractors to major corporations, often located abroad. This is even giving rise to "cloud computing," where the computing function itself is relegated to a massive collection of servers owned by a few global vendors.

But the pressure of shrinking budgets has pushed outsourcing further, as shown by the tasks that military contractors have been asked to perform. These include not only laundry and food services, but also building, maintaining, and even guarding military outposts. The military is now finding that some of these tasks, though not strictly "core" battle–related missions, are difficult to contract effectively and reliably.

That is the nub of the problem in the commercial sector, too: The question to ask is not if a task is "core" or "non-core," but if it is "contractable" to an outside vendor. Far be it from us to advise the US military on how it should organize its missions. But we do have ample theory and evidence to advise corporations on where to draw the outsourcing line.

Ronald Coase won the 1981 Nobel Prize in Economics for his theory on this question, published in the 1930s. Characteristics of the transaction, he argued, can make it hard, or costly, to contract a task to an outsider. In such cases, the firm would be better off doing the job itself, he reasoned. Research since then has helped us understand better what determined these "transactions costs." Two points are worth mentioning here.

First, outside vendors may have to invest in unique assets and technologies to provide the service. If there is demand from multiple buyers, this is not a problem, as is shown in the information processing sector. But what if NASA asks outside vendors to supply launch services for its future missions? In fact, NASA is being asked to send people where none has gone before (Mars), but with a shrinking budget. The solution: Outsource! But because NASA will be the unique buyer of these services, any vendor will need assurance that NASA will buy its services before it invests too much in the business. This contracting problem is leading NASA to experiment with various mechanisms to provide the right incentive to entrepreneurs.

Second, ensuring the quality and the "fit and finish" of the vendor's product may be a problem. NASA will face that issue in the future; Boeing already has. With its Dreamliner 787 project, Boeing sought a new approach to engineering and production, relegating more work to suppliers and keeping final integration to itself. But Boeing found it hard to keep track of supplier schedules and ensure that parts from different suppliers fit together as intended. The well-known delays that have resulted led Boeing this summer to buy up key vendors and regain tighter control over the supply chain.

This is the key lesson from the evidence: Tasks that are hard or costly to outsource require an extra dose of management. Or you should do them internally. The worst solution is to outsource them and then under-manage the transaction. Boeing is realizing this and making corrections. The Defense Department reportedly has decided to send more personnel to Afghanistan to oversee contractors.

In this sense, the term "outsourcing" is an unfortunate one. With every outsourced task comes a new responsibility to govern that task properly. The burden of manufacturing a part or running a call center may be shifted to an outside company. But the responsibility for managing the supplier and for ensuring quality doesn't budge. Denying this amounts to governance myopia.

Ben Gomes-Casseres specializes in alliance strategy at Brandeis International Business School. He can be reached at bgc@brandeis.edu. He is currently writing a book on alliances with Harvard Business Press. For more about Ben, see his profile page at Monitor Talent.