Wednesday, April 13, 2011


Competition

Many people believe that competition produces our high standard of living and well-being. They point to the personal computer, smart phones, to tablets like the IPad and ascribe those marvels and their rapid development to competition.

This belief has become a quasi-religious faith. And where faith comes in, people stop thinking.

So let's look at what competition actually does.

Competition does not always produce new products. Among the big drug companies, for instance, when one company develops a successful product, the other competitors are not glad that one more problem has now been solved and go on to invest their energies in developing drugs for a different medical condition. Instead these competitors spend millions of dollars to develop a drug that does essentially the same thing and is just different enough to earn its own patent. They want to get a share of the bonanza produced by Viagra or Lipitor. They do not develop new drugs for diseases so far unmanaged. It is not clear, however, that we need a whole raft of different drugs that do pretty much the same job. We need research on other medical problems and possible remedies. Thanks to competition we are not getting those from the major drug companies.

Competition, as everyone points out, forces businesses to produce their products as cheaply as they can. Now, at the present moment, coal and oil are still cheaper than solar or wind. So the capitalist businesses competing with each other will use coal and oil and continue to contribute to global warming, instead of doing what many businesspeople would obviously prefer, namely to switch over to sustainable energy sources. As long as American and world businesses compete with each other as they do today, the prospect for resolving the impending energy disaster is very dim indeed.

We need to understand this very clearly: competition forces businesses to produce their products as cheaply as possible. They can do this in different ways. One is to use energy sources that pollute the environment. Another is to look for cheaper sources of labor. American businesses do this in three ways: some of them export jobs, previously done in America, to Asia or elsewhere where wages are very low. Others hire illegal workers whom they pay lower wages than workers with papers. The third method for lowering wages is to destroy the power of labor unions, an effort that is in high gear at the moment in states that make collective bargaining illegal or limit it severely. We owe the disaster in Wisconsin to competition.

Competition among producers of snack foods, soft drinks, fast foods have indeed produced an impressive array of products with empty calories. We are indebted for the present wave of obesity to this competition. Also contributing to this crisis is the competition among legislators to cut taxes. That means school systems are short of money. They try to make up for that by cutting nonessential subjects like physical education. Add to that the competition between video game companies and what we have is a real health crisis on our hands, thanks to different kinds of competitions.

Yes, smart phones are quite wonderful. It is not clear however that they have made life better. It is clear that adding up all of its effects, competition is a real threat to all of us and to the lives of our children.