10 Competition
In the author's time, there was constant denunciation of the "anarchistic competition" among producers, as if it were unquestioningly destructive or wasteful. It is a strange way to regard one of the more positive forces of a free market economy, one which gives each man the opportunity to do what suits him best and encourages him to become even better.
It has been said that man can exist only by his efforts, as some effort is required to produce for his own needs the things he requires to survive. It has also been said that men are inclined to expend as little effort as possible to achieve a given goal, in order that he may spend the remainder of the effort on other things or, if it please him, to simply while away the time and enjoy a life in which he spends only a fraction of his waking hours chasing material necessities. In this sense, man's first competition is with himself - to apply his effort an intelligence in an ever more efficient manner, and to gain an increasing benefit from his limited resources. Even if a man were alone, with no-one to "compete" with, he has this competition with nature for his own survival and happiness.
Similarly, when men exist in a market where multiple individuals offer the same good, the customers seek to obtain it at the lowest price - such that their limited budget can obtain more benefit for them. And to offer the lowest price, producers must compete. But again, they are no competing with one another, but applying their own wits and industry in a competition with nature, to attempt to produce a benefit at a lower cost, which betters suits the customer. So long as this is the manner of competition, with each competitor seeking to do his best rather than to hinder the performance of others, then competition remains healthy and ethical.
And this manner of competition is the only method by which it may be objectively proven what a thing ought to cost, or how much of it ought to be made. It is proven by those who are capable of doing it, and demonstrated in their actions, rather than in the speculative declaration of those who are incapable of doing things, but are fond of suggesting what others ought to be able to achieve.
A return to the autistic economy: a man in isolation works only as hard as he must to produce only as much as he needs. He has no incentive to produce more than he can consume, nor any incentive to produce less (which would be to his detriment) and his only motivation to excel is to decrease the time and effort necessary to a task so that he might do other things. A man in society can profit by producing more than he can consume, because he can trade his excess product to others - who likewise benefit from being liberated from the labor necessity to produce it for themselves. The upper limit to a man's productivity is therefore to produce as much as anyone in his market can consume at a cost that is less than they can produce it for themselves. This is what makes social existence more productive and efficient than living alone.
The argument against competition also points to the flaw in the assumption that labor is the basis of value: in that if a method can be found to produce a good with less labor, this decreases the cost of production, but does not decrease its value to the consumer. Bread is equally suitable for consumption regardless of the amount of labor required to create it.
There is also the argument against "self-interest," which is ludicrous because self-interest is what motivates man to take action at all. If he is not thirsty, he has no motivation to fetch water. If he is thirsty, then he does. And if he is routinely thirsty, he has motivation to find a less labor-intensive method of providing himself with a regular supply of water. Perhaps these critics mean that man should work in the interest of others - but how is he to accurately gauge what others require? He cannot, and a great deal of inefficiency and even damage is the result of blind actions by those who assume the needs of others.
Society benefits best when people perform those tasks at which they are most adept and efficient. Few would argue otherwise, and none can demonstrate the contrary. Nature's gifts are unevenly distributed, and just as some land is more fertile than other land for a given crop, so are some men better suited to a certain task than others. But the notion that a person is "most adept" means he is less adept at other things, and on a societal level, being "most adept" means being more adept than others. Competition to determine who, in fact, is best suited to a task.
There is an extended rant about to competition among nations, which is ludicrous for the same reason: Britain will be better at producing coal and Brazil will be better at producing sugar, and they should each do what they do best and trade their work product - this is to the benefit of all. It would be wasteful to insist England produce sugar in a climate that is unsuitable to the task, and then restrict Brazil from being able to produce more than England on the basis that this is "fair" to either the producers, the consumers, or the nations. If each person or nation does what it does best, there is more of everything for all.
He deflects the argument about monopolization - which suggests that the best producer will become the only producer, driving all others out of business. This could only occur if one producer had the ability to produce as much as the world demands, which is simply not plausible. The best producer produces to his capacity, and there is ample demand for the second-best, third-best, and so on to have ample customers to sustain their operation.
Aside of natural abilities, knowledge and experience cause one man to excel another. There is not sufficient time for a man to become master of all things, so he must specialize in one profession - and in giving the whole of his attention to developing his capabilities in that specific profession, he exceeds the abilities of others who give less attention to it (and more to other things).
Supply and demand serve to guide men to profitable professions: where there are too many skilled carpenters in a location, the work of blacksmiths becomes more dear, and young men are guided toward that profession. If too many train at smithing, then the glut of providers that exceed demand for their services will bring the wages back to a more reasonable level. Nor is the die cast for any man - if he trains to smith and finds the profession unprofitable, he can change his profession to something else.
(EN: This is actually a problem, even in the present day. There is a shortage of accountants, so employers bid up wages, and a flood of college students gravitate toward accounting. When they graduate four years later, there are more accountants than jobs. The problem is exacerbated by industries and government agencies, who tend to panic and encourage this behavior rather than acting as the voice of reason to provide reasonable projections of demand.)
Technical progress also creates inequalities in productive capability, but only temporarily. The first farmer who discovered that using oxen to plow his field enabled him to produce more with less effort enjoyed a boon. But then his neighbor noticed this, and began doing the same, and the playing field was leveled. On the other hand, those who attempt foolish schemes are often penalized when they attempt to use a method that is less efficient - their techniques are not adopted and are eventually abandoned. Because one cannot tell whether a technique will be successful until it is attempted, it must be left to producers to take the risk, and their temporary advantage is their natural reward.
He strays a bit into credit markets, which suffer from a related phenomenon. Generally, there are more who wish to borrow capital than those who have it to loan, causing a rise in interest rates. That rise coaxes more people to convert wealth to capital, bringing rates down. In other instances there is more capital than borrowers, causing rates to fall, until capital is withdrawn from the market and rates rise. Fluctuations in the value of anything - labor, capital, land, etc. all follow the same patterns, and are constantly seeking a point of stability where demand and supply are matched to the satisfaction of those involved in exchange.
He concedes that he has not considered the influence of "evil" in human relations - in that man can be dishonest and exploitative of others, and that there are those who find the work of self-preservation distasteful and would prefer to use force or fraud to obtain the work of others. In most instances, when there is widespread poverty and misery, it is the result of the parasitic influence of those who produce nothing but take the work product of others - removing not only the good, but the incentive to produce from a society.
In general, the complaints against competition are most frequent on the part of those who are faring poorly. The craftsman who is less skilled, the worker who is less industrious, and the merchant who is poorer at negotiation complain that it is competition, rather than their own deficiencies, that prevent them from being as successful as others. Whether this is avoidance or envy, it serves no socially beneficial purpose.
Competition is a natural incentive of a man to improve his performance. The actions taken to discourage competition have also been shown to discourage progress: if a man is penalized for producing more than his neighbor, then he will be inclined to produce less to avoid the penalty. And if he is then producing less than his neighbor, a penalty must be placed on the other party. This is not the discouragement of competition, but an encouragement to compete to see who can do the least or the worst. And just as competition to excel improves society, competition to underperform degrades it.