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competition,in economics, rivalry in supplying or acquiring an economic service or good. Sellers compete with other sellers, and buyers with other buyers. In its perfect form, there is competition among many small buyers and sellers, none of whom is too large to affect the market as a whole; in practice, competition is often reduced by a great variety of limitations, including copyrightscopyright,
right granted by statute to the author or originator of certain literary, artistic, and musical productions whereby for a limited period of time he or she controls the use of the product.
..... Click the link for more information. , patentspatent,
in law, governmental grant of some privilege, property, or authority. Today patent refers to the granting to the inventor of a useful product or process the privilege to exclude others from making that invention.
..... Click the link for more information. , and governmental regulation, such as fair-trade lawsfair-trade laws,
in the United States, a former group of statutes that permitted manufacturers to specify the minimum retail price of a commodity. The first fair-trade law was adopted (1931) by California.
..... Click the link for more information. , minimum wageminimum wage,
lowest wage legally permitted in an industry or in a government or other organization. The goal in establishing minimum wages has been to assure wage earners a standard of living above the lowest permitted by health and decency.
..... Click the link for more information. laws, and wage and price controlswage and price controls,
economic policy measure in which the government places a ceiling on wages and prices to curb inflation. Also known as incomes policy, such programs have generally been avoided in the United States during peacetime.
..... Click the link for more information. .
Competition among merchants in foreign trade was common in ancient times, and it has been a characteristic of mercantile and industrial expansion since the Middle Ages. By the 19th cent. classical economic theorists had come to regard competition, at least within the national state, as a natural outgrowth of the operation of supply and demandsupply and demand,
in classical economics, factors that are said to determine price, by correlating the amount of a given commodity producers hope to sell at a certain price (supply), and the amount of that commodity that consumers are willing to purchase (demand).
..... Click the link for more information. within a free market economy. The price of an item was seen as ultimately fixed by the confluence of these two forces.
Early capitalist economists argued that supply-and-demand pricing worked better without any regulation or control. Their model of perfect competition was marked by absolute freedom of trade, widespread knowledge of market conditions, easy access of buyers to sellers, and the absence of all action restraining trade by agencies of the state. Under such conditions no single buyer or seller could materially affect the market price of an item. After c.1850, practical limitations to competition became evident as industrial and commercial combinations and trade unions arose to hamper it.
A major theme in the history of competition has been the monopolymonopoly
, market condition in which there is only one seller of a certain commodity; by virtue of the long-run control over supply, such a seller is able to exert nearly total control over prices.
..... Click the link for more information. , which represents a business interest so large that it has the ability to control prices in a given industry. Some governments attempted to impose competition through legislation, as the United States did in the Sherman Antitrust ActSherman Antitrust Act,
1890, first measure passed by the U.S. Congress to prohibit trusts; it was named for Senator John Sherman. Prior to its enactment, various states had passed similar laws, but they were limited to intrastate businesses.
..... Click the link for more information. of 1890, which made many monopolistic practices illegal. President Teddy Roosevelt was well known for his "trust-busting," filing lawsuits against over 40 major corporations during his two terms in office (1901–9). Later legislation in the United States, such as the Clayton Act (1914), the Robinson-Patman Act (1936), and the Celler-Kefauver Act (1950), offered revisions and clarifications of the Sherman Act. The Federal Trade Commission, created in 1914, is a regulatory agency with the mission of encouraging competition and discouraging monopoly.
Until the mid-20th cent., there was widespread government acceptance of the existence of industrial and commercial combinations, together with an effort to apply regulation administered either by the state or by the industries themselves. Governments had accepted the existence of what were considered "practical monopolies," particularly in the field of public utilities (see utility, publicutility, public,
industry required by law to render adequate service in its field at reasonable prices to all who apply for it. Public utilities frequently operate as monopolies in their market.
..... Click the link for more information. ). This attitude changed somewhat after the 1970s; for example, the U.S. government forced the breakup (1984) of American Telephone and Telegraph and deregulated (1985) natural-gas prices. In the 1990s, state regulators began to allow competition among some utilities (especially natural-gas and electricity suppliers) in order to bring prices down. This was also a trend in some European countries; Germany, for example, deregulated its electric power industry in 1999.
See M. L. Greenhut et al., Economics of Imperfect Competition (1987); L. G. Telser, A Theory of Effective Cooperation and Competition (1987); T. Frazer, Monopoly, Competition and the Law: The Regulation of Business Activity in Britain, Europe and America (1988).
competition,in biology, relationship between members of the same or different species in which individuals are adversely affected by those having the same living requirements, such as food or space. Intraspecific competition, i.e., competition among members of the same species, is illustrated by some species of birds and mammals, the males of which set up territories from which all other males of the same species are excluded. In interspecific competition members of different species compete for the same ecologically limiting factors, such as a food source. Not all relationships among organisms are competitive; for example, the commensal relationship between members of different species is noncompetitive (see commensalismcommensalism
, relationship between members of two different species of organisms in which one individual is usually only slightly benefited, while the other member is not affected at all by the relationship.
..... Click the link for more information. ).
competitionany action in which one person or group vies with one or more other persons or groups to achieve an end, especially where the outcomes sought are scarce and not all can be successful in achieving these. Competition may be direct or indirect; it may or may not be normatively or socially regulated.
In ECONOMICS, the ‘ideal’ of competition between sellers in a market economy – the hidden hand regulating economic life – has been held to lead to low prices, equality of profits, and the promotion of economic efficiency. In the 19th century, the social benefits of competition were widely stressed by many schools of social theorists, e.g. UTILITARIANISM, SOCIAL DARWINISM, and the sociology of SPENCER. Influenced by economic and biological theories, members of the CHICAGO SCHOOL also made competition central to their accounts of URBAN ECOLOGY. Thus, competition has often been assumed to be a universal, and a productive, element of the human condition.
By contrast, Marxism has viewed competition more as a specific requirement of CAPITALISM, in which the surface appearance of fairness and effectiveness is seen as belied by actual asymmetries of power and by the underlying contradictions and conflicts which competition generates. There also exist many other theories which stress the deleterious social and individual effects of competition in some of its forms, unless regulated or offset by other values (see COOPERATION, ALTRUISM).
The implication of such contrasting views would seem to be that competition is not best seen as a universal drive. Nor is it a phenomenon that should be viewed as wholly positive or wholly negative in its implications. Rather, it should be regarded (as by Weber) as a frequent aspect of social relations, with implications which require individual analysis in each case.
The concept of‘competition’ overlaps with CONFLICT. Although the latter concept is more likely to be used to refer to situations which lack institutionalization or normative regulation, or lead to disruptive social tensions, no hard-and-fast distinction exists, as illustrated by the existence of such concepts as ‘institutionalized conflict’.
(Russian, konkurs), a contest intended to reveal which of a number of participants is the best.
(1) In labor law, the procedure for filling certain positions. In the USSR academic vacancies in institutions of higher learning are filled by competitions. In research institutions, competitions are held to fill the posts of director of a laboratory, division, or section and of senior or junior research assistants, except for posts filled by academicians and corresponding members of the Academy of Sciences of the USSR. In theaters, ensembles, orchestras, choirs, and other concert organizations, performing artists, directors, choreographers, and designers win their positions through competitions, as do physicians in municipal hospitals. Persons chosen by competition retain their seniority after leaving their former employment. Announcements of competitions appear in the press.
(2) In higher and specialized secondary schools, competitions for a place in the entering class are held among those who have passed entrance examinations.
(3) In general and specialized educational institutions, various kinds of competitions serve as an effective means of extracurricular education, revealing and developing students’ interests and abilities. For example, competitions are held in various school subjects, in artistic and technical work, and in sports. In the USSR, all-Union, republic, and local competitions are regularly held to determine the best school compositions, the best student work in various fields of science and technology, and the best students in various technical specializations in the vocational education system.
(4) International, national, and local competitions (by field, subject, and so forth) are frequently held to determine the best solutions to scientific, technological, or artistic problems or the best performance of artistic works. Ministries, government departments, social organizations, publishing houses, and other groups periodically hold competitions, both open and closed (departmental), to work out scientific problems and technical and architectural plans, to create monuments, scientific, and educational literature, and works of fiction, to design and print books and journals, and to create works of graphic art. Newspapers and journals conduct international, national, and local competitions, generally thematic, for literary works in various genres, photography, and so forth.
International and national competitions of pianists, violinists, cellists, singers, chamber music ensembles, and ballet dancers attract worldwide attention. In the USSR and other countries international, national, and local competitions of variety and circus performers are also held. The first all-Union competition of dramatic readings in the USSR took place in 1936 and the first all-Union competition of variety performers in 1939. By 1970 four all-Union competitions of dramatic readings and four all-Union competitions of variety performers had been held. Beginning in 1970, all-Union competitions of variety performers were scheduled to be held once every four years. Competitions of dramatic readings are held periodically and as a rule are thematic. Since the early 1960’s international and national competitions of popular songs have become popular, including those of Sopot (Poland), Golden Orpheus (Bulgaria), Bratislava Spring (Czechoslovakia), Rostock (German Democratic Republic), and Sochi (USSR).
(5) Another form of competition are the contests (generally thematic or by occupation) included in the programs of various international and national festivals, exhibitions, fairs, and championship matches.
(in biology), relations between organisms of the same or different species during which they compete for the same means of existence and conditions of reproduction; one aspect of the struggle for existence (a second aspect is elimination, that is, destruction of the less adapted forms and the prevention of their reproduction).
Intragroup and intergroup competition are distinguished. Intragroup competition takes place between the individuals of a population (on the basis of individual differences) to preserve their lives and the lives of offspring. Intergroup competition takes place between populations (on the basis of their group differences) and results in the displacement of some populations by others and in the accumulation of differences between scattered populations, which promotes the formation of new subspecies and then species. Interspecific competition is most acute between related species. Upon a change in conditions in favor of one species, competition results in its displacing the other species. Thus, interspecific competition may lead to a divergence of related species, dying out of some groups of organisms, and wide distribution of others.
A. A. MAKHOTIN
a characteristic of the commodity production based on private ownership of the means of production; such ownership engenders an antagonistic struggle between private producers for more advantageous conditions of production and marketing of goods. Under capitalism, competition is a struggle among capitalists to obtain the highest profits.
Competition results from the ownership of the means of production by private capital if the producers have no other economic relationship except the market. At the same time competition is a mechanism of spontaneous regulation of social production. Competition leads to the ruin of some producers and the enrichment of others (who are economically stronger); a differentiation of small commodity producers occurs that un-avoidably leads to the development of capitalist production relations. Under capitalism, competition has reached its highest point of development. It is manifested through the economic law of competition and the anarchy of production.
The forms and methods of the competitive struggle have changed at different stages of the development of capitalism. Under premonopolistic capitalism, free competition predominated. It was characterized by comparatively peaceful methods and culminated in the economic suppression and ruin of the rival mainly through open price competition (price cutting). During this period two main forms of competition in its purest aspect became apparent—intrasectorial competition, which was waged for influence and position on the market (such competition leads to the formation of a uniform social or market value), and intersectorial competition, waged for the most profitable fields of capital investment. Intersectorial competition results in a transfer of capital from sectors with a low profit rate into high-profit sectors; through such competition an average profit rate is established that is uniform for all production sectors. Thus, competition is an antagonistic form of the development of productive forces in the capitalist economy. Every commodity producer, capitalist, or individual monopoly, seeking to cut production expenses in order to survive in the struggle of all against all and to ruin every rival, is forced to use modern equipment and progressive technology and to develop new sectors and new kinds of production.
Competition is a powerful factor in the concentration of production, which in a certain stage leads to the formation of monopolies and “growing over” of free competition into imperialism—the highest and last stage of capitalism. Free competition is changed to monopoly. However, monopoly domination does not eliminate the competitive struggle, since the appropriation of the results of labor still exists in the private sector. Anarchy of production is preserved, as is the antagonism of interests of different monopolistic groups and of various strata of the bourgeois population. Also, the more intensive the development of monopolistic capitalism, the more intensive the competition becomes. The nature of the competition depends on the degree of monopolization of the capitalist economy. V. I. Lenin wrote: “The monopolies, which have grown out of free competition, do not eliminate the latter, but exist above it and alongside it, and thereby give rise to a number of very acute, intense antagonisms, frictions, and conflicts” (Poln. sobr. soch., 5th ed., vol. 27, p. 386). Monopoly, which grows out of free competition, becomes its direct antipode. Monopoly exists under the conditions of commodity production and is in constant opposition to it. As far as the monopolies can even temporarily establish monopoly prices, the stimulus to technological progress disappears to that degree; nevertheless, “monopoly under capitalism can never completely, and for a very long time, eliminate competition in the world market” (ibid., p. 397). Competition then takes place on a new basis.
The interaction of the monopoly forces and of competition is the most important feature of the economic mechanism in the era of monopoly rule. Competition becomes crucial when it occurs between the biggest corporations: intrasectorial and intersectorial competition and competition within national economies and on the scale of the entire capitalist system arise. Competition also exists between monopolies and the non-monopolized enterprises (outsiders). Here, the monopolies rely largely on methods of direct pressure, such as depriving the outsiders of buyers (through agreements with commercial companies), hindering the shipping of their goods (through agreements with the shipping companies), and drying up their credit. Some competition also takes place within the monopolistic associations. A particularly acute competitive struggle develops over the sources of raw materials and the commodity market.
The most important feature of monopolistic competition is the changing role of price competition. Price maneuvering includes systems of secret discounts and concessions for major buyers, general and partial discount sales on commodities, and the establishment of a uniform price for commodities of different quality. A characteristic feature of contemporary monopolistic competition is the wide use of different forms of nonprice competition in such areas as technological superiority, quality, and dependability of manufactured products; marketing methods; the nature of services offered and guarantees; and conditions of payment.
In the hands of the biggest corporations, innovations become an instrument of the competitive struggle on the national and world markets. That is, the largest companies acquire control over the dynamic sectors of industry, research laboratories and scientific staff, and the most important patents; they get the necessary capital and receive government subsidies and government orders. The state supplies the largest monopolies with interest-free grants, preferential tariffs, and the right to accelerated depreciation, that is, the right to establish excessively high rates of obsolescence allowances for fixed capital. Thus, the mechanism of spontaneous market regulation is under the influence of the private monopolist and the state.
One of the main means of competitive struggle is advertising. It helps redistribute markets among competitors, increase market capacity, and create new markets. In their competitive struggle, big companies commonly use such nonmarket methods as financial maneuvers, speculation with securities, lawsuits, economic boycotts, and forced mergers (sometimes using direct sabotage). All these methods and forms of competitive struggle lead to increased corporation spending, which is passed on to the public through monopolistic high prices. Monopolistic competition, on the one hand, accelerates the rate of scientific, technological, organizational, and structural changes; on the other, it intensifies the contradictions of capitalism. “In fact,” Lenin observed, “it is this combination of antagonistic principles, viz., competition and monopoly, that is the essence of imperialism, it is this that is making for the final crash, i.e., the socialist revolution” (ibid., vol. 32, p. 146).
In socialist society, which is based on the principle of public ownership of the means of production and the planned organization of production, competition does not exist. Relations of friendly cooperation and brotherly mutual aid are engendered by socialist emulation, which is the direct opposite of capitalist competition.
REFERENCEMarx, K. “Nishcheta filosofii.” In K. Marx and F. Engels, Soch., 2nd ed., vol. 4, p. 151.
Marx, K. Kapital, vol. 1. Ibid. vol. 23, pp. 279–80, 559.
Marx, K. Kapital, vol. 2. Ibid., vol. 24, p. 195.
Marx, K. Kapital, vol. 3. Ibid., vol. 25, ch. 1, pp. 246–47, 253 , 344–45, 391, 401–02, 480–81; ch. 2, pp. 32, 245.
Marx, K., and F. Engels. Manifest Kommunisticheskoi partii Ibid., vol. 4.
Engels, F. Anti-Dühring. Ibid., vol. 20, pp. 152, 220–21, 283.
Lenin, V. I. Imperializm, kak vysshaia stadiia kapitalizma. Poln. sobr. soch., 5th ed., vol. 27.
Lenin, V. I. “Kak organizovat’ sorevnovanie.” Ibid., vol. 35, pp. 195–96. Politicheskaia ekonomiia sovremennogo monopolisticheskogo kapitalizma, vol. 1. Moscow, 1970. Chapter 7.
Sedov, V. I. Novyeformy konkurentnoi bor’by v usloviiakh sovremennogo kapitalizma. Moscow, 1971.
V. A. BUDARIN