CAPITALISM AND COMPETITION
• The engine of capitalism is competition, then as now, between capitalists. It is the profit that runs the system. For profit, it must produce and sell goods.At alltimes, the competition seems to be the essence of the economic system: it is essential for the proper functioning of capitalism, the source of its dynamism. Indeed, competition is competition betweenmarket providers or claimants for the same goods or services. That is what will bring the pricing in the market, and the search for profitability and business efficiency.
-Capitalism is the economicsystem based on private ownership of means of production and the free individual initiative, it is stimulated the search for profit but subject to the law of the market, where the clash intentions of amultiplicity of decision makers.we rely primarily on competition emerges from the ongoing confrontation between suppliers on the one hand, of applicants. another, in each market (goods, labor andcapital). This leads to a competition, which theoretically lowers the price until it equalizes the average cost. Finally, thus benefiting only the well-being. capitalists shall in particular avoidagreements between companies order to keep prices as low as possible and to avoid monopoly pricing.
• Capitalism actively breaks monopolies to foster competition. Whilst it is true that monopolies sometimesform, these are combated by regulatory methods like monopolies commissions (witness attempts to break up Microsoft, or regulators forbidding the merger of some airlines on competition grounds). Socapitalism actively tries to stop monopolies. On the other hand, monopolies are inevitably a part of every aspect of activity in socialist systems - the monopoly of the state.
Economic freedom meanscompetition and competition fosters innovation.it’s innovation, more than the price competition that characterizes market capitalism, competition forces firms to invest in research, innovate, if they...
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