From FEE.org:
Market competition is at the heart of the capitalist system. It serves as the driving force for creative innovation, the mechanism by which supply and demand are brought into coordinated balance for multitudes of goods, and as the institutional setting where individuals freely find their place to best earn a living in society.
Yet, listening to the critics of capitalism, competition is made out to be a cruel and dehumanizing process that feeds unnecessary wants and desires, or has a tendency to evolve into anti-competitive monopolies that are contrary to the “public interest.” Competition fosters a “selfish” disregard for the “common good” and misdirects resources from their most important socially-valuable uses.
Competition Through Political Means
As long as resources are scarce and social positions are too limited to satisfy everyone’s desire for status, competition will exist. The crucial questions concern: how will it be decided what gets produced and for whom, and how shall social positions in society be determined and filled?
For almost all of human history these questions were determined by conquest and coercion. Those with greater physical strength or manipulative guile used these superior abilities and skills to gain the goods they wanted and the status they desired over others.
In a competition between the physically “strong” and the “weak,” it was often the case that “might made right.” Pillage and plunder enabled some to seize goods and to then subjugate and enslave those they conquered to work for them and accept their conquerors as their legitimate masters.
Most, if not all, forms of competition were battles for political power and position. Closeness to the throne and having favor with the king or prince gave one control over land and people, and therefore possession of material wealth in the forms in which they existed in those earlier times. The mythologies of the aristocratic nobility – the lords of the manor – asserted that they were the repository of grace, charm, and culture, the carriers of civilized manners and the benefactors of civilization. This hid the fact that their leisure time for and attention to the “higher things” of life were only made possible – to the extent that any of them were actually concerned with anything other than their personal pleasures and pastimes – due to their success in gaining legitimized authority over the productions of others.
…………………..
Market Competition Liberated People and Provided Opportunities
The slow liberation of men and production from these restraints and the opening of both labor and manufacturing to greater market-based competition freed a growing number of people from a life of oppression and wretched poverty. Competition meant that a man could leave behind the legal tethers that had tied him to the land and obligatory work for the aristocracy. Now, an individual could more freely find work more to his own liking where it might be offered in towns far away from where he had been born, and earn a far greater income than he ever had in the rural areas, however modest those incomes may seem by today’s standards.
Competition meant that a resourceful individual with a willingness to bear risk could found his own business, make a product of his own choice, and market it to those with whom he increasingly freely negotiations and contracts. He could experiment with new manufacturing methods and techniques, he could hire based on mutually agreed upon terms of work and wages, and he could retain the profits he may have earned to not only live better himself but to plow a good part of those profits back into his business to expand production in new and better ways.
………………….
Competition as a Discovery Procedure
To this may be added Friedrich A. Hayek’s (1899-1992) focus on “Competition as a Discovery Procedure” (1969). Competition is useful and, indeed, essential to the creative processes of the market. As Hayek pointed out, if in, say, a foot race we already knew ahead of time who would come in first, second, third, etc., along with each runner’s relative times, what would be the point of running the race?
It is only through competition that we can find out how a race will end. Only through the competitive process can we discover the abilities of each individual relative to others. It is also true that each individual cannot know for sure what he or she is capable of in a particular setting unless they try to find out what they can accomplish by challenging themselves. [read more]
Other articles about capitalism from FEE.org:
Posts
No comments:
Post a Comment