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Competition and the Economy: Economic Perspectives

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Abstract

Economic competition is defined, and economics discussed, both generally and scientifically. Focus is then given to the elements in the competitive process: the actors, the forms of competition, and their anchoring in the real world. Regulation is also a topic considered. What then are the functions and goals of competition? Special attention is given to the question of efficiency, promoted, for example, by Pareto optimization, but also with problems such as unwished-for external effects, inefficient production of collective goods, and a waste of resources. Consideration is given to whether competition or cooperation is most effective? How competition can promote creativity, quality, and economic growth is also discussed. The three are linked, creative innovation and quality can contribute to growth, but each of them includes as well both positive and problematic aspects. The competitive distribution of resources (and of power) depends on the actors involved and on the form of competition. From the viewpoint of consumers, the goal of competition is utility; from the viewpoint of both sellers and producers, it is profit. Does competition also have a societal goal? Societal well-being seems not generally prominent in today’s competitive economic world. There are, however, in a modern, competitive economy, elements that can promote the well-being of society: consumer sovereignty and a reduced concentration of power and creativity to benefit more people. In order to identify carefully what characterizes competition as an economic instrument and what this entails in a societal context, the author contrasts Milton Friedman and John K. Galbraith. The comparison is related to the character of competition, the necessity of competition, its consequences, and competition and state regulation.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.MF Norwegian School of Theology, Religion and SocietyOsloNorway

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