Tim_Tyler comments on Beyond the Reach of God - Less Wrong
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The idea of one big organism is not really that it will be, in some sense "optimal". It's more that it might happen - e.g. as the result of an imbalance of the powers at the top.
We have very limited experience with political systems. The most we can say is that so far, we haven't managed to get communism to be as competitive as capitalism. However, that may not matter. If all living system fuse, they won't have any competition, so how well they operate together would not be a big issue.
In theory, competition looks very bad. Fighting with each other can't possibly be efficient. Almost always, battles should be done under simulation - so the winner can be determined early - without the damage and waste of a real fight. There's a huge drive towards cooperation - as explained by Robert Wright.