Topic: Modern Economy Economic competition is not war, but competition in each other’s interests E. Kannan
The statement made by Edwin Cannan reveals the essence of managing a market economy from the standpoint of economic competition. Not a single market system in most countries of the world can do or will do in the future without competition, because only competition is a condition for the functioning of the market and satisfying the needs of customers with the most favorable relationship between price and quality.
British economist Edwin Cannan believes that "economic competition is not war, but competition in each other's interests." The author seeks to prove that competition is not cruelty, but on the contrary, competition is needed by the market and can also be useful for the producers themselves. After all, due to competition, sellers strive to improve the quality of products in order to interest buyers. Consequently, they invest in the development of science and technology, thereby ensuring progressive trends in the development of society. I agree with the author's opinion and believe that the role of competition in a market economy is enormous, and that it is what contributes to healthy interaction.
Let's consider the concept of economic competition itself.
Competition is the rivalry between market participants for the best conditions for the production, purchase and sale of services and goods. Competition is a natural phenomenon. It is generated by private property, the complete economic isolation of each owner of goods of a particular type, the dependence of the position of sellers and buyers on the market price, which sets the rules of transactions for absolutely all participants.
Free market competition has two types: individual and mass competition. The first type is capable of changing only the individual value of the product, which belongs to one owner, while the second leads to a change in the overall market value. Free competition in all forms is conducted by relatively peaceful methods. It comes down to the economic suppression of a rival (his ruin) mainly through open price competition (bringing down prices).
Massive competition leads to subsequent results. Firstly, to establish an equilibrium market value, thereby regulating the surplus or shortage of goods. Secondly, thanks to competition, a single price is introduced for homogeneous products of the same quality. Thirdly, competition stimulates scientific and technological development. Since the manufacturer, trying to spend fewer resources per unit of production, introduces innovations in techniques and technologies, various methods of economical use of resources. And ultimately, competition increases the socio-economic division of market participants. Small enterprises do not withstand the severe test of strength and go bankrupt. Competition is characterized by a tendency to deepen inequality, and then the gap between small and large owners. Let's give specific examples.
In the IT products market, investors invest in the development of new technologies. There are so-called venture companies that are engaged in the creation of new technologies in various fields, which pushes science forward and provides consumers with a more advanced product. For example, when Apple lost competition in the desktop PC market, it began producing mobile devices, producing smartphones and players, that is, it created an alternative market for itself, in which it became more successful than other companies. These products made the company world famous and opened up new opportunities. As a result, iPhone and iPod users paid attention to other Apple products and switched from PC to Mac. So, due to competition with Microsoft, the company found its own unique path and became the most valuable company in the world.
Or, for example, consider the auto industry. When Henry Ford improved conveyor technology, his company was able to produce 10 cars per day instead of 1, which significantly reduced the cost of the car. Labor has become several times cheaper per vehicle produced. This naturally increased the profit of the company and the entrepreneur.
Each of us encounters the beneficial consequences of competition between producers. We have before us a wide selection of various goods and services, the quality of which the manufacturer strives to improve in order to interest buyers. Moreover, during a price fight, sellers significantly reduce the price in order to also lure the buyer to their side. All this is very beneficial for the common consumer. For example, when choosing a phone for myself, I didn’t think about quality or design, since it’s almost on the same level everywhere, but I chose a phone that would have the most reasonable price. So, having examined theoretical arguments and specific examples, we are convinced that economic competition is necessary, and it is positive not only in relation to buyers, but even in relation to producers. Because thanks to it, a company can find the most suitable industry for development, and can also maximize profits.
economic competition market
In his statement, British economist E. Kannan touches on the importance of competition in the development of a market economy. The relevance of this problem lies in the fact that competition is an integral component of a market economy.
E. Kannan believed that economic competition in most cases aims to create rivalry between producers, rather than to ignite a war between them.
First, let's look at the key concepts of war and competition. War is a social phenomenon aimed at destroying an opponent. Competition is the same struggle, but a struggle for the best conditions for sales and purchases, as well as for access to economic resources. The main difference between competition and war is that in the process of war there is a desire to destroy an opponent, while competition involves a struggle to improve one’s enterprise, improve the qualities and conditions necessary for a favorable process of selling goods on the market. In economics, there are two types of competition: pure, which would fully allow enterprises to compete with each other, mutually developing; and imperfect, which includes monopolistic competition, monopoly and oligopoly. These same components partially or completely block the possibility of competition, which negatively affects both the price of the product produced and its quality.
As proof, I would like to give an example of the influence of competition on the improvement of brands. Consider brands such as Microsoft and Apple, which have been competing with each other for many years. I would like to note that from the very beginning of its development, Apple has been releasing products to the market with accurate calculations of their need during this particular period of time, and also has a strong marketing influence on customers, which of course affects demand. In this regard, Microsoft is inferior to its rival, which in turn provides it with some motivation to eliminate the shortcomings that it carries within itself. A similar influence can be seen using the opposite example. This is where competition manifests itself, which leads to mutual assistance in the prosperity of both brands.
I’ll take the second example from the media. A few months ago, an article was published that the iPhone 7 Plus smartphone had dropped in price, which led to competition in the market. This rivalry between smartphone companies has in turn led to price cuts not only for the iPhone 7 Plus, but also for other smartphones.
Based on the above, I want to conclude that only by competing with each other can enterprises develop in a positive direction (both for the benefit of the buyer and for the benefit of themselves). Rivalry between enterprises, i.e. competition is not a war, it is, on the contrary, some kind of assistance in the implementation and development of your company, your product.
Economic competition is not war, but competition in each other's interests.
(Evin Cannan)
I agree with Alvin Cannan's statement that economic competition is not war, but competition in each other's interests. The word competition means competition, competition for the right to be the best at something, to have something special. That is, competition is a competition, the achievement of a goal by two or more contenders. Healthy competition exists in any society, in every area. And people do not view competition as a negative side of human relations. On the contrary, sometimes this type
competition is encouraged. So why shouldn't competition be considered war?
First you need to understand the difference between the concepts of war and competition. War implies a struggle, military actions directed against each other, to destroy the opponent. War is always negative, destruction. Competition is the same struggle, but not with the goal of destroying your opponent (both morally and physically), but a struggle to obtain some benefit, and by identifying the strongest of the rivals. Most often, competition occurs in the economic sphere. So, if two or more companies are competitors, then each of them tries to offer more favorable conditions for its customers, win their favor and gain markets. If it were not competition, but war, firms would not strive to improve their products, but to destroy their rival.
Why is competition mutually beneficial? Because competitors strive to become better, increase their potential, thereby promoting progress. Monopoly in any industry is destructive, as it does not stimulate growth and allows you to remain in place and not move forward.
A striking example of the lack of competition in the economy is the policy of “War Communism” pursued by Lenin at the beginning of the 20th century. The absence of small and large private owners, and, consequently, competition between them, led the Russian economy to decline.
Very often competition is used as a psychological factor. From a biological point of view, competition - as a driving form of evolution - is inherent in every person, that is, everyone has an inherent desire to prove themselves better than their opponent. Each of the competitors tries to master the best qualities, skills, and features. This has a positive effect on both the development of the personal qualities of one person and the improvement of production as a whole.
To summarize, I think we can say with confidence that competition is not only not a war, but even an engine of development. Largely thanks to this open type of competition, high labor indicators are observed in every sphere of society, and high quality production is achieved by organizations and individuals. That is, we can talk about the positive impact of competition on society.
The purpose of the lesson: to continue work on developing the foundations of economic literacy, to consider the position of a person in the system of economic relations. Objectives of the lesson: - Summarize, repeat and consolidate students’ knowledge on the topic “Modern Economics”, deepen students’ knowledge of economics; - Fostering civic engagement, the desire to purposefully overcome difficulties on the path of learning, and continue to develop the skills to work in a group; - Comprehensive development of the personality of high school students, strengthening the ideological orientation of cognitive interests in the light of the integration of humanitarian and technical disciplines, development of students’ emotions, interest in the subject. Lesson type: repeating - generalizing. Lesson form: lesson-game. Equipment: I.V. Lipsits. Economics. Moscow, "education", 2007. PC, projector. Advance task: the class is divided into groups, each group receives the task: to create a presentation “Company”. At the previous lesson, a terminological dictation is conducted, the results of which are necessary for the next lesson. DURING THE CLASSES:
Today in class we must repeat, generalize and consolidate knowledge on the topic “Modern Economics”. And today you will compete in each other’s interests. And the game will help us with this. Stages of the lesson "Terminal" "My years are growing..." "Lifebuoy" "First steps" "First steps" Memo to the consumer
“Lifebuoy” 10 minutes Imagine that your ship is shipwrecked. You have launched a life raft. In the emergency supply there are items: a flashlight, chess, mosquito repellent ointment, a laser disc, a bottle of mineral water. Items can only be transferred one at a time: 1 is the most important, 2 is less, etc. make a hierarchy, determining the place of each item. Comment on your choice.
We check the consumer reminder; Information is power. The more you know. The more confident you feel The more expensive a thing is, the more you need to know about it A person makes his own choice One of the main problems when buying a product is its safety It is important to know how to distinguish a fake from a branded product Be critical of advertising
E. Kannan
The statement I have chosen discusses the essence of such a concept as economic competition and its importance for a market-type economy. In modern Russia, the foundations of a market economy began to take shape recently, so it is especially important for us to understand the basic signs and characteristics of the market.
British economist Edwin Cannan believed that economic competition is a necessary component of market relations, which is an exclusively positive phenomenon. He said:“Economic competition is not war, but competition in each other’s interests.”In other words, the author emphasizes the importance of the positive significance of competition for the development of the economy in general and for the development of competing entities in particular. I share E. Kannan’s point of view regarding the need for competition for a market-type economy, but I still believe that, taking into account all its positive qualities, one should not forget about its negative manifestations. However, the fact remains that competition is the life-giving environment for a market-type economy.
First of all, it is worth giving theoretical arguments. Modern economists define competition as competition between participants in a market economy for the best conditions for the production, purchase and sale of goods. In a market economy, competition covers all spheres of economic life and, above all, implies the struggle of entrepreneurs. The essence of competition involves the struggle for the best conditions for the sale of one’s goods, the use of advantages, etc.
It is important to note that certain conditions are necessary for the development of a competitive environment. The main ones are considered to be free pricing, diversity of forms of ownership, lack of market monopolization, and the operation of laws protecting private property rights.
The modern competitive market is based on free competition. In modern conditions, such a market model becomes impossible. Already in XX century, the formation of an imperfectly competitive market began. These include oligopoly the appearance on the market of a number of large manufacturing companies that begin to determine the conditions of the game, control prices, and divide sales markets.
In addition to theoretical arguments, a number of specific arguments can be given. One of the positive manifestations of competition is that it encourages manufacturers to develop new technologies that best satisfy consumer needs. For example, every year new programs and operating systems appear on the computer technology market, processor power increases, desktop computers, laptops and netbooks become more compact, lighter and more practical. This is a definite plus for the development of science, which is “spurred” by competition.
Another example is that in a competitive environment, entrepreneurs are forced to think through all aspects of the business in order to outperform their competitors. Thus, in the middle of the 20th century, Henry Ford began to use a new labor organization system at his enterprise, which in our time is considered a classic solution.
But still, I believe that in no case should one write off the negative manifestations of competition, which often turn it into war, and not into fruitful and mutually beneficial competition. For example, in 2011, unable to withstand the competition, the once leading camera manufacturer Kodak went bankrupt. Of course, this can be considered an example of market self-regulation, but it also indicates a “war” between entrepreneurs.
You can also give an example from personal experience. From the consumer's point of view, competition mainly shows its positive sides. For example, a manufacturer has to create more favorable conditions for the consumer than its competitors. Therefore, sales, discounts and bonuses are held, which allow you to purchase the necessary product or service at a reduced price or on more favorable terms.
Thus, economic competition is undoubtedly the basis of market relations. But, nevertheless, when discussing the positive aspects of competition and what constitutes “competition in each other’s interests,” we should not forget about the elements of “war” in this type of relationship.
