Competitive advantage

“ In his Essays in Social Justice, Professor Carver discusses three forms of economic competition at length. Here he includes competitive production, competitive bargaining, and competitive consumption of economic goods. The second class has already been referred to as commercial persuasion. Competitive production increases the supply of economic goods and “always works well.” Competitive consumption, however, “always works badly.” ”

“ The crude and commonly accepted notion that the general result of the current competitive system was to place the benefits of competition in the hands of “the consumer,” and that, since everybody is a consumer, all improvements of productivity ultimately benefited consumers as a body, was thus put into the scrap-heap, and there began to emerge the view that economic “force” was a main determinant in the distribution of wealth. ”

“ Competition, especially among industries managed on a great scale, often makes modern business unprofitable. Commercial men have been thus compelled in some way to modify former methods of doing business. So long as most industries were run on a small scale, the differences in the ability and the facilities of the various competitors were so great that only those at the lower end of the scale of excellence were forced out of the business—this to the general advantage of industrial society. ”

“ The argument of the promoters is, not that every one who comes into the combination can carry on his business more efficiently than he did before; the argument is: we will assign to you as your share in the pool twice, three times, four times, or five times what you could have sold your business for to an individual competitor who would have to run it on an economic and competitive basis. We can afford to buy it at such a figure because we are shutting out competition. ”

“ Whether or not the advantages obtained by operating on a large scale preponderate in any particular case over the more watchful attention, and greater regard to minor gains and losses, usually found in small establishments, can be ascertained, in a state of free competition, by an unfailing test. Wherever there are large and small establishments in the same business, that one of the two which in existing circumstances carries on the production at greatest advantage will be able to undersell the other. ”

“ The value in competitive areas is to be determined by agreement, regard being had to net profits and to the circumstances and conditions under which the company would carry on such business after the date of sale. ”

“ Such is the opinion of a conservative economist with an especially kindly feeling towards the competitive system.
It would seem, therefore, that the competitive organization of industry has a tendency to crush out the weaklings. How numerous are these weaklings, we shall now discuss. ”

“ The organization for this purpose which has the most widely extended apparatus, which can reach the greatest number of points, and which is ready to take any business at any time and perform it with the least doubt or delay, will always have an advantage in competition for business, if there is competition, which will enable it to advance to a monopoly. ”

“ So that the element of competitive selling is after all not absent in these cases, but takes the form of competition between different classes of wares instead of competitive selling of different brands of the same class of wares. ”

“ Competition does not become less free merely because the conduct of commercial operations becomes more intelligent through the free distribution of knowledge of all the essential factors entering into the commercial transaction. ”

“ If all his competitors had the same advantages, and used them, the benefit would be transferred to their customers, through the diminished value of the article: he only retains it for himself because he is able to bring his commodity to market at a lower cost, while its value is determined by a higher. All advantages, in fact, which one competitor has over another, whether natural or acquired, whether personal or the result of social arrangements, bring the commodity, so far, into the Third Class, and assimilate the possessor of the advantage to a receiver of rent. ”

“ The dominant motive of the commercial world, would be revolutionized. Among manufacturers and producers, the cry would be, not how cheap, but how excellent, can we make our goods! The long-practiced, skillful chicanery of competitive methods, would be at a discount ”

“ The spirit of competition ruled the American business world at the beginning of the last century, the forces of combination dominated at its close. The new order was the product of necessity, not of choice. ”

“ When we are now told that our competitive examinations may indeed exhibit the scholastic acquirements of a candidate for place, but not his practical business capacity, his industry, or his aptitude as a worker, the overwhelming answer is found in the established fact, that wherever the competitive system has been properly carried out, it has immeasurably improved the service in its practical efficiency. ”

“ We have seen that from the ranks of the wealthy few, come the leaders of competitive society, who make their strong holds in the great city. They are the shining lights of the competitive system. They believe in a constant warfare of competition, which brings suffering to the many and success to the few. ”

“ The proposal to revert to the older competitive plan is reminiscent of the outcry against machine production a century earlier, and the earnest pleas then made to return to the hand-tool method. "Big business" constitutes one of the greatest advances in human industry, and therefore has surely come to stay. ”

“ The reason that the masters of combination have sought to shut out competition is that the basis of control under competition is brains and efficiency. I admit that any large corporation built up by the legitimate processes of business, by economy, by efficiency, is natural ”

“ They neither are inclined, nor will business competition permit them, to neglect or overlook any expedient that may further their own advantage or hinder the advantage of their rivals. Under the modern situation, as it has taken shape since the industrial revolution, (14*) business competition has become international, covering the range of what is called the world market. ”

“ TO FOSTER A STRONG ECONOMY
Our competitive enterprise system depends on the energy of free human beings, limited by prudent restraints in law, using free markets to plan, organize and distribute production, and spurred by the prospect of reward for successful effort. This system has developed our resources. It has marvelously expanded our productive capacity. Against the record of all other economic systems devised through the ages, this competitive system has proved the most creative user of human skills in the development of physical resources, and the richest rewarder of human effort. ”

“ Increasing competition in the marketplace spurs business and industry to improve both the quality and price of their products and services. This in turn enables consumers to get more out of their buying dollar. At the same time, the demand for greater innovation and productivity helps to create jobs. ”

“ Competition has innumerable advantages: a. It encourages manufacturers and service providers to be more efficient, to better respond to the needs of their customers, to innovate, to initiate, to venture. ”

“ Friendly rivalry follows, which is the spur to industrial improvement, the inspiration to useful invention and to high endeavor in all departments of human activity. It exacts a study of the wants, comforts, and even the whims of the people, and recognizes the efficacy of high quality and new prices to win their favor. The quest for trade is an incentive to men of business to devise, invent, improve and economize in the cost of production. Business life, whether among ourselves or with other peoples, is ever a sharp struggle for success. ”

“ Competition is here wasteful. But when we have to do, not with a specific product, or with a fixed field such as that of street railways or city lighting, but with the open field of invention and service, we need to provide for continuous coöperation, and competition seems at least one useful agency. ”

“ In this, the competition is perfectly fair, and what every man on entering his business must lay his account to. He may rest secure that he will not be supplanted, unless his competitor possess superior skill and industry. ”

“ But in modern industry, when the market is world-wide, the technique most complex, and the competition most severe, when inventiveness, sagacity, courage, and decision in initiative, and skill in management, are factors so important, no such exclusive place as has been claimed can be assigned to labour. ”

“ Competition, as an economic position or phase, considered in its origin, is the necessary result of the intervention of machinery, of the establishment of the workshop, and of the theory of reduction of general costs; considered in its own significance and in its tendency, it is the mode by which collective activity manifests and exercises itself, the expression of social spontaneity, the emblem of democracy and equality, the most energetic instrument for the constitution of value, the support of association. ”

“ Whether in information or materials-related technology or for that matter in other areas too numerous to count, the nature of competition is driving both product breadth and improvement at rates perhaps unthinkable a decade ago. ”

“ In fact, from what I can glean, it seems that, when the competition between, for instance, the manufacturers of any given nation has become very keen, they begin to part with their 'consciences'—to put them up in the parcels of goods ”

“ Those industries in which the competition becomes a matter of cutting of prices can by combination remove rivals from the field, and then put prices up to a remunerative rate. Competitors in industries of the second class by combination can save many of the costs of selling, and thus without any increase in the price of the product may save enough of the cost to make the business profitable. ”

“ Should the price of one article rise by attempted monopoly to a prohibitive basis, another product is called in to supply its place, which, by intrinsic merits, or by combination with others based on scientific authority, supplants the previous competitor. ”

“ Or, to state the same thing in a different way: that the greatest prosperity can exist only as the result of the greatest possible productivity of the men and machines of the establishment—that is, when each man and each machine are turning out the largest possible output; because unless your men and your machines are daily turning out more work than others around you, it is clear that competition will prevent your paying higher wages to your workmen than are paid to those of your competitor. ”

“ Even in ordinary business, the competition of capable persons who in the event of failure are to have all the loss, and in case of success the greater part of the gain, will be very useful in keeping the managers of co-operative societies up to the due pitch of activity and vigilance. ”

“ Competition is defined as “the act of seeking or endeavoring to gain what another is endeavoring to gain at the same time.” But competition in modern industrial life is not merely a struggle to appropriate an existing good. The very contest, as over the control of a market, may and probably will lead to cheaper and larger production, and thus to the benefit of society. Competition is a selective process in our modern economic society, and through it we have the survival of the fittest. ”

“ That competition we have to meet, not only in the countries mentioned, but in all countries where we meet them on equal terms; to meet such competition we must be able to produce more cheaply and a better article than others do, and we must safeguard our position as the world's bankers and carriers, as well as the position of our manufacturers. ”

“ For purposes of determining whether effective competition exists in a specific economie activity, it will be important to consider the following factors: The number of competitors participating in the respective activity, their share of the respective market, their installed capacity, demand for the respective product or service, technological innovation that affects the market, the actual and legal likelihood of potential competition in the future, and access by competitors to sources of financing and supply, as well as to distribution networks. ”

“ Enumerate the advantages possessed by a "trust" over a small competitor, and indicate which of these are the results of large scale production and which are due to the possession of monopoly power.
4. Are there any conditions under which a combination would be a more economical unit of production and distribution than a single plant large enough to secure all advantages to be obtained from mere quantity of output? ”

“ Our present methods mean waste in every direction, and trusts and syndicates have already demonstrated how much may be saved to the producer if intelligent combination can be brought about. Competition can never wholly be set aside, since within reasonable limits it is the spur of invention and a part of evolution itself. ”

“ Here is a fair adjustment between logical competitors, the retention of competition where it is not practicable to eliminate it, and its abolishment where it is feasible to uproot it and establish great operating economies in the wake of the change. ”

“ The tendency, however, with wider knowledge of others' wants and efforts is toward a greater uniformity of profits. Modern methods of production and clearer perception of ways and means make it easier for competition to have its full effect between different kinds of business, as well as in the same business. The more we know of our neighbor's work through the daily press and extensive travel, the fairer is the opportunity for competition to act. This tendency brings hardship to the weaker portion of managers engaged in any particular business. ”