Economic competitiveness

“ American manufacturers are adapting to new economic circumstances by increasing their efficiency, their productivity, and their price-competitiveness. They have retained their share of the gross national product in a dynamic and changing national economy. ”

“ Manufacturing and other industrial activities can proceed with greater vigor as the power situation improves in terms of competitiveness and productivity. We will champion exports as the key to sustainable economic growth. ”

“ 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. ”

“ The accumulation of capital had become so large,—and with new inventions the possible output had become so abundant, that it was well nigh impossible to trust to the blind working of demand and supply to regulate things in a beneficial way. It began to dawn on men's minds that a successful period of competitive economic life might lead to a period largely dominated by non-competitive and coöperative principles. ”

“ Farm prosperity and high employment will call for an immensely increased output of goods and services.
Growth and vitality in our economy depend on vigorous private enterprise. Free competition is the key to industrial development, full production and employment, fair prices, and an ever improving standard of living. Competition is seriously limited today in many industries by the concentration of economic power and other elements of monopoly. ”

“ Large corporations, which can afford the best machinery; which control abundant capital, and which can plan with scrupulous economy all the details of producing and selling an important product or service, are actually able to reduce the cost of production to a minimum; and in the cases of certain American corporations such results have actually been achieved. The new organization of American industry has created an economic mechanism which is capable of being wonderfully and indefinitely serviceable to the American people. ”

“ But there is a distinction to be made between industrial efficiency and business prosperity. Americans have hitherto identified prosperity with a furious economic activity, and an ever-increasing economic product—regardless of genuine economy of production and any proper distribution of the fruits. ”

“ 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.” ”

“ When his single sale of labor stands in equipoise over against his many purchases, we shall have buyers as well as sellers and our production and traffic will never cease. We have in trade-unions a first step in the adjustment of exchange. Workmen strive to escape the competition of the incompetent and shiftless, to redirect distribution in ways more just and equal, and by this means to be able to play their own part in economic life more advantageously for themselves and for all. ”

“ This competition not only makes the means of production dearer, but must eventually, by increasing the demand, reduce the price of the product to the ordinary level of profit, that is to an equilibrium with other commodities.644 Hence, in the beginning, every diminution of [pg 321] the cost of production645 turns to the advantage of the producer; but afterwards and permanently to that of the consumers: an economic law exceedingly beneficent in its operations, and not unlike the action of positive legislation in the matter of patents. ”

“ Part of the advantages will go to the consumer whenever there is a motive on the part of the large establishment to increase supply in order to get a larger profit or to forestall new competition. As the improvements become matters of public knowledge, most of the new economic methods can and will be adopted by new enterprisers, and other large aggregations of capital will be induced to come in to reap [Pg 326] the benefits. The effect, of course, is an increase in supply and a lowering of prices. ”

“ While we believe that labor in the aggregate naturally obtains the whole of the produce of industry after the deduction of the fair shares of capital and management (which are limited by competition) and that the benefit of improvements effected by virtue of invention, engineering and organization inevitably accrue mainly to labor, there may be delay of the natural result through imperfection of competition and temporary opportunities for employers to take advantage of labor. ”

“ The exchange value of each commodity is determined by the conditions of supply and demand, which thus makes the division among the several industries. No industry may successfully dictate respecting this unless it possesses a monopoly, and then only within limits. It is easier for successful dictation respecting the division between capital and labor within an industry but that also is subject to limitations. ”

“ Trade secret theft, including industrial and economic espionage, which imposes significant costs on U.S. companies and threatens the security of the United States, appears to be escalating. If a company's trade secrets are stolen, it may be extremely difficult, if not impossible, to recoup past investments in research and development, and future innovation may be compromised. Moreover, trade secret theft threatens to diminish U.S. competitiveness around the globe, and puts American jobs at risk. ”

“ For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage. For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more takehome income, which they can reinvest in their enterprises. For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life. And for consumers, it means more choices, better service, and lower prices. ”

“ 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. ”

“ The efficiency of the new manufacturing processes has provided a large surplus of goods that must be taken somewhere, exchanged for food and raw materials, which must, in turn, be brought to the producers of manufactured goods. In the course of these transactions, a generous share of the values produced goes, in the form of profit, to the owners of the industry, another considerable portion goes into reinvestment, thus swelling the volume of productive capital.
The increased wealth, the larger capital and the greater amount of surplus all make possible the maintenance of a larger population. ”

“ The producer who works at the greater advantage is foreordained to underbid and supplant the one who works under more unfavorable conditions. That a static state may exist and that the movements of labor and capital from point to point may be precluded, every competitor within a subgroup must be able to keep his business intact, hold his customers, and retain in his employment all the labor and the capital that he has. ”

“ In general industry competition tends so to adjust prices as to yield interest on capital, wages for all varieties of labor, including labor of management, and nothing more, and this is the outcome elsewhere demanded by a growth of business coupled with a theoretically normal and perfect action of competition ”

“ The real withholding of productive effort, however, takes place among the owners and managers of industry.
Industrial leaders are well versed in the law of monopoly profit: "Minimum product at maximum price." The railroad men have rephrased the law thus: "All that the traffic will bear." Industry has been organized and capitalized and is now owned by a group whose interests lie, not in the extent of production, but in the volume of profit. When profit is no longer forthcoming, the owners practice the conscious withholding of efficiency. ”

“ Why the Public depends on Competition for Securing its Share of Benefit from Improvements.—Another [Pg 364] question is whether the two systems, that of competition, on the one hand, and monopoly, on the other, confer equal benefits on the public by virtue of the improvements they make. Competition does this with the greatest rapidity. As we have seen, it transforms the net profits due to economies into increments of gain for capitalists and laborers throughout all society. ”

“ Competition a Cause of Rapid Changes in the Standard Shape of Society and of a Quick Conformity of the Actual Shape to the Standard One.—The competition which is active enough to change the standard shape of society rapidly—that, for example, which spurs on mechanical invention and causes a large profit to be realized in a particular subgroup—has also the effect of calling labor and capital quickly to the point at which the profit appears, and, in the absence of any monopoly, reduces this profit to nil and restores, in so far as this cause of disturbance goes, the equilibrium of the groups. ”

“ The capital thus thrown out of employment in an industry in which we had no comparative advantage (when competition became free) would necessarily be employed in the industries in which we had an advantage, and would supply—and the transferred capital would be the only means of supplying—the commodities which would be sent abroad to pay for those, which by the supposition are now imported, but were formerly produced at home. ”

“ Competition acts to distribute the working force over the field of industry wherever it is most needed. The remarkable (tho far from perfect) adjustment of industry to the needs of each neighborhood is brought about by individual motives, not by centralized authority. Wherever consumers settle, stores are started and factories are built. Wherever work is to be done, men come in about the right number to do it. It is not mere chance that produces this result. The available skill is adjusted to varying needs by the delicate measurement of the market rate of wages. ”

“ On the contrary, the number of manufactories and the amount of capital invested in them is steadily and rapidly increasing, affording gratifying proofs that American enterprise and skill employed in this branch of domestic industry, with no other advantages than those fairly and incidentally accruing from a just system of revenue duties, are abundantly able to meet successfully all competition from abroad and still derive fair and remunerating profits. ”

“ You have the competitive system which is self-destructive and hence weak. Your producing classes can organize as consumers and take advantage of the sharp competition between dealers to sell goods, and by a wise use of their combined power to purchase, introduce an equitable system of exchange. ”

“ It is this competition which so adjusts the exchangeable value of commodities, that after paying the wages for the labour necessary to their production, and all other expenses required to put the capital employed in its original state of efficiency, the remaining value or overplus will in each trade be in proportion to the value of the capital employed. ”

“ Many lean and hungry peoples are being integrated into the global economy. Competition is particularly fierce for trade and investments. And the countries most likely to capture these investments are those that set out the appropriate policies. ”

“ Looking about us for other causes of variation in the intensity of competition we discover a fifth law: The intensity of competition tends to vary directly in proportion to the amount of capital required for the operation of each competing unit, especially when the interest on the capital invested forms a large proportion of the cost of production. Take, for example, the case of a railway line. All the capital invested in it is wasted unless the road is in operation. ”

“ It is only by rebuilding our economy and fostering the conditions of growth that willing workers can find a job, companies can find capital, and the entrepreneurial spirit that is the key to our competitiveness can flourish. ”

“ If the market price rises high above the cost of production, producers make a profit greater than the average profit made in the country. This induces them, by the appropriation of new land and the employment of new labor and capital, to increase their business. ”

“ Should he not be actuated at first by motives so remote, he will, in every highly civilized country, be compelled, by the powerful stimulus of competition, to attend to the principles of the domestic economy of manufactures. At every reduction in price of the commodity he makes, he will be driven to seek compensation in a saving of expense in some of the processes ”

“ Our workers in today's economy are more productive than ever. Fewer people are producing more and more goods and services. But in an environment like that, the only way to create more jobs and to raise incomes is to have more customers. And that means more exports. That's why, in this global economy, America must compete and not retreat. ”

“ Men by the pressure of competition are forced to seek out the easiest and most direct methods, and to learn how to secure the greatest results with the least expenditure of labor and material.
It is this principle which lies at the very root of our industrial development. ”

“ In professional words: it optimizes the allocation of resources at the firm level and, as a result, throughout the national economy.
More simply: producers do not waste resources (capital) , consumers and businesses pay less for the same goods and services and, as a result, consumption grows to the benefit of all involved. b. The other beneficial effect seems, at first sight, to be an adverse one: competition weeds out the failures, the incompetents, the inefficient, the fat and slow to respond. Competitors pressure one another to be more efficient, leaner and meaner. ”