Linked by Kroc on Thu 30th Aug 2007 13:03 UTC
Editorial I hear often that when something new appears that "competition is good". The primary reasons competition is seen as good, are: it drives down prices; it gives consumers more choice; it pushes technology forward, quicker. Competition is not good because: competition is why consumers have to choose between HD-DVD and BluRay; competition is why DRM exists; and more. In this article, each of the supposed benefits of competition will be looked at in more detail.
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Disconnected from reality
by rycamor on Thu 30th Aug 2007 14:11 UTC
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There are too many logical flaws with an argument like this to bother dealing with one-by-one, but let's just take the main idea in abstract: competition (in economic development) is bad.

OK, and what exactly would we replace it with? Every argument I've seen against competition seems to assume quietly that there need be no real discussion as to the alternative. It's taken on faith that "we" (really meaning the government) should somehow make those evil businesspeople stop competing and just play together nicely, as if we're all in kindergarten.

So instead of businesspeople and companies freely choosing what projects they will work on and how they will sell them, we should replace that with some benevolent body of bureaucrats with the limitless perception as to what things should be developed, and how they should be sold? Has this ever worked? I'm willing to bet that with serious examination, it is 100% provable that this approach always leads in the end to lower quality and less prosperity for everyone. Certainly the history of the 20th century bears this out.

Yes, competition breeds bad things as well as good things. People are not perfect, so they will choose to work at odds with their own interests or the interests of others quite often. There is no guarantee against that. But any approach to legislate against this falls into the same problem: how do you know the legislators will make the right choices? Why would we trust them to somehow magically know what is in our best interest? Oh... democracy, you say? Our votes help weed out those who work against our interests? Isn't that competition also? (Not to mention, it is a much more "gameable" sort of competition. The number of politician promises divided by the number of broken politician promises approaches the value of 1.)

"No, no..." you argue. "You're making unfair assumptions". OK, so the only other assumption to make is that this argument is simply a plea to get businesses to *freely* choose less competition. I have no problem with that. In fact, businesses quite often DO choose to cooperate rather than simply compete. That's why we have business associations, and in fact why standards exist at all (No, the concept of standards was not created ex nihilo from the mind of some politician). Game theory itself proves that sometimes cooperation is better than competition for both parties. The real point of all this is not competition, but profit. And profit is good for all concerned. Profit is why we have products to buy, and why we have jobs, rather than pure slavery. If you remove profit, you remove not only the incentive to make improvements in anything, but also the means to do so.

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