Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
(?-1899)
BIO
Display paragraphs in this book containing:
Editor/Trans.
First Pub. Date
1881
Publisher/Edition
New York: Maynard, Merrill, and Co.
Pub. Date
1899
Comments
Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
Start PREVIOUS
259 of 1105
NEXT End

COMPETITION.

I.256.1

COMPETITION. The word competition has been thus defined by a French lexicographer: "The aspiration of two or more persons to the same office, dignity or any other advantage." This is, indeed, in harmony with its etymological meaning. Two or more individuals aspire at the same time to the same position, to the same dignity, to the same advantage, no matter what; they vie with each other to obtain it; there is competition between them for its possession. But after thus giving the general meaning of the word, this same lexicographer attempts to give what he calls its commercial meaning, and here he seems to us less happy. He calls it: "The rivalry which exists between manufacturers, merchants, etc., whether concerning the quality of their products, their merchandise, etc, or concerning prices, with a view to sharing the profits of the same branch of commerce, industry, etc." What is rivalry concerning the quality of goods or their price? It is not true that in commerce and industry, competition always has these characteristics; and even if it were, they would not constitute its essence. The writer confounds the substance with the form, the principle with the changeable circumstances under which it is produced. Our lexicographer here seems to us misled by the desire to establish between commercial competitions and competition in its ordinary acceptation an essential and generic difference, which does not really exist. In reality they are the same thing. In commerce, as in everything else, by the word competition is meant the struggle of two or more individuals who aspire to the same advantage, and vie with each other to obtain it; the end to be attained is different, and in many respects, the means of attaining it are different also. For instance, what a man is in search of in public life is an employment or dignity, from which he hopes to derive honor or profit; in industrial or commercial pursuits, it is the sale of his products from which he expects a profit. There is a difference in the manner, in the circumstances, but not in the principle. There is a still greater difference in the means employed to obtain the end proposed, because the positions are different. Whoever aspires to a public office which another man disputes with him, lays stress on his personal merit, his talent, and the services which he has rendered. He curries favor with the ministers, in whose gift the offices are; he obtains recommendations to them from some of his supporters; and it is thus that he endeavors to defeat his rivals. In commerce or industry the competitors no longer court power, because it is not on power that the sale of their goods depends. They court buyers, and the means they employ consist, less in proving their personal merits, than in laying stress on the cheapness or the quality of their products. Aside from this, all competition is the same. The endeavor always is to obtain an advantage which is disputed by competitors. To say that commercial competition is a rivalry between merchants as to either the price or the quality of their products, is as if we were to say, that competition in public life consists in the rivalry which exists between aspirants to office, in respect to either their personal qualities or the services which they have rendered. We have from the beginning of this article endeavored to establish the identity of commercial competition with that general competition which is found in all human activity, because there is in them a common principle. In whatever way it may be produced, competition has always the same point of departure, the same motive, although it has not always the same mode of action, nor the same effects. It is universal competition among men which, everywhere and in all the ways of life, prompts men to vie with one another to obtain advantages which are not equally and superabundantly given to all. This competition results everywhere from this fact alone, that mankind have not at their disposal a fund of inexhaustible wealth, a fountain of happiness, fortune and honor, from which each individual may draw at his pleasure, without ever exhausting it. In public life, as the number of offices, especially of easy and lucrative ones, is not as great as the number of men who aspire to them, there is naturally a competition among these men for their possession. In commerce, likewise, as the number of buyers never equals the number of things to be sold, there is competition between the sellers to obtain the preference in the market. Who does not clearly perceive here the identity of principle? In both cases competition is caused by the insufficient quantity of the goods wished for, and the natural desire of each one to obtain as many as he can of them. It is born with men, and it will not cease to exist until men discover the means of infinitely increasing all the objects of their desires.

I.256.2

—But competition, as we have already seen, proceeds differently according to the course it follows and the end it has in view. In all cases, and in whatever manner it appears, it has its useful effects, to which, considering the imperfections of human nature, are attached certain inevitable inconveniences. Because of the competition which exists between those who aspire to public offices, they vie with one another in making themselves more deserving of them, by rendering better service to the government which employs them. If there were always only one man fit to fill each of the offices dependent upon the government, we may be sure that this one man would take his ease, and that public duties would, in general, be very badly performed. It is because each employé feels that he has competitors, either actual or possible, that he endeavors to perform his duties well, and especially to furnish no just cause of complaint. In commerce, likewise, it is because of the competition among sellers, that each one of them endeavors better to satisfy the public, by giving them products of a better quality, or at a lower price. If there were but one producer of each of the objects of human consumption, this one producer would also take his ease, and would hardly dream of improving either the conditions of his production or the quality of his products. This is but too often the case wherever there exists a monopoly. Competition is, therefore, here as elsewhere, a necessary condition that industry may be kept up and the public well served.

I.256.3

—Connected with these advantages there are inconveniences, some of which are inevitable, because they result from the very nature of man, while others, sometimes more serious still, result accidentally from the unfavorable circumstances in which certain countries are placed.

I.256.4

—In the case of government employés it sometimes happens that the competitors, instead of vieing with one another solely in talent, merit or services rendered, make use of deceit and intrigue, striving to obtain by favor, or by means still less reputable, what should belong to merit alone. They strive to win over, to overreach, and to deceive the men who control the patronage; they seek to influence them by recommendations they have obtained by begging, and sometimes even to bribe them. In like manner, in commerce or industry, intrigue, imposition and fraud too often usurp the favor which is due to real merit. The public are deceived by gaudy sign-boards or by fallacious announcements; they are attracted by the bait of cheapness, and are cheated with adulterated products. Nor are they deceived in the quality of the merchandise only, but sometimes in weight and measure as well. Thus it is, that in this common pursuit of public favor, the most crafty, the most intriguing, the most deceitful, frequently get the better of the most skillful or the most deserving. If there be any difference to be made in this regard between commercial competition and that which occurs in public life, it is all in favor of the former; for the public, who, in the purchases they make from merchants, always act on their own account, and with a view to their own most immediate interests, are much less easily deceived than a government which never acts but through the medium of its chief agents, who have no direct interest in the selection which they have to make, and with whom petty considerations of vanity or personal ambition frequently take precedence of the public interest, which it is their duty to serve.

I.256.5

—Although the disadvantages which attend competition are, to a certain extent, inevitable, since they proceed from the imperfection of human nature, and, in this sense, are almost the same everywhere, we must admit that they are more or less serious, more or less apparent, according as society is in an embarrassed or a prosperous condition. When society is prosperous, when there is abundant employment for labor, so that every individual easily finds an opportunity to use his faculties, competition, without being entirely stripped of its excesses, is everywhere more moral and keeps more within proper bounds. As every man is almost sure of receiving his share of prosperity, and of obtaining in return for the performance of his duties toward society a share of the goods which it distributes, he is less severe upon his competitors. Each one still strives to obtain as much as he can of social advantage, and competition never ceases to be earnest; but, after all, it is only a question of more or less; competition is generally confined within its proper limits. If a person has the least feeling of his dignity as a man, he disdains to resort to dishonest means; it is by real merit that he endeavors to excel his competitors. This is no longer the case in a society that is disturbed, constrained, and ill at ease, and that can give employment to only a portion of those who crave it. In this society, as there is no longer enough for all, competition between individuals, whether in public life or in commercial pursuits, is no longer a simple question of pre-eminence; it is oftener a question of life and death. A man then must get the better of his rivals or perish. Here it is that competition becomes, at one time fierce and cruel, at another immoral and perfidious, and that we find everywhere, as well in public life as elsewhere, a great number of men, to whom all means seem good. In these critical situations, competition, under whatever form, and in whatever way of life it appears, often presents, we must admit, to the eye of the philanthropic observer, a very distressing spectacle. Nor must we judge too severely those men of a weak and unphilosophic spirit, who, witnessing these scandals, the causes of which they could not fathom, conceived the senseless, and besides impracticable project of suppressing competition itself. They did not see, blinded as they were, that, even if they had succeeded in their plans, they would not have destroyed competition; they would merely have removed it, without in the least correcting its abuses. Still less were they in a condition to understand to what degree this simple removal would have been, in other respects, unfortunate for the human race, all of whose resources it would have lessened, and all of whose labors it would have disorganized.

I.256.6

—We would not have the reader imagine that in what we have just said our object was to defend industrial or commercial competition against the puerile attacks which have so frequently been made on it. It has always seemed to us as ill becoming economists to stop to defend such a principle; it is too entirely inherent in the primary conditions of social life; it is, at the same time, too great, too elevated, too holy, and, in its general application, too far above the attempts of the pigmies who threaten it, to need any defense. We do not defend the sun, although it sometimes burns the earth, which it should only illumine and warm, neither is there any need to defend competition, which is to the industrial world what the sun is to the physical world. The economist's task is merely to explain its action in the industrial sphere, and to show its marvelous effects. This is the best defense of it we can offer, and it is the only one which becomes it.

I.256.7

—If industrial competition does not differ in principle from the competition to be found everywhere else, and especially in public life, it signally differs from it in its consequences which are far richer in results. Looking at it in the first instance only as a necessary stimulant of general activity, although it acts, in this sense upon government employés as well as upon merchants and those engaged in industry, it has incomparably greater effects upon this latter class.

I.256.8

—The task of public officials generally consists in obeying, to the best of their power, the instructions they have received from those above them. They move in a circle traced out for them in advance, and which they can not leave, even to do more or to do better. The only effect of competition among them is, therefore, to render them more punctual, more exact in the performance of the orders given them by those above them. They can perform them, it is true, with greater or less intelligence, but they can not, as a rule, add anything to them of their own accord, nor, consequently, invent or change anything for the sake of improvement. Besides, in spite of this competition, of which we were just speaking, the administration of all the governments of the world are in their nature stationary, and almost inaccessible to progress. Their accepted forms and methods, no matter what vices they may conceal, are almost invariable. Hardly anything less than a revolution can change them. If a change in the way of progress is sometimes made, which rarely occurs, it can come only from those who are intrusted with the general direction of the government, and who inspire its entire policy. It is unnecessary to add, that innovations fertile in results are at all times very rare.

I.256.9

—It is not so with industrial pursuits, in which every individual, or at least every man of enterprise, acts on his own account and with entire independence. Here competition no longer appears merely as a prompter of activity, exactness, punctuality and order, although it produces these useful results here as well as elsewhere; it here appears also and especially as the principal agent of progress. And all these manufacturers, masters of their actions and responsible for their works, stimulated as they are by the incessant competition of their rivals, contrive how they may more and more simplify labor, improve its methods, perfect known processes and invent new ones. One man invents a machine to lessen labor and diminish the cost of production; another invents a chemical compound to improve the quality of his products; a third, a form of the division of labor so as to simplify its workings; a fourth, a system of accounts more convenient than the old ones; a fifth, a quicker or better way for transporting and distributing products; and so on. The question is, which one will surpass his rivals by the abundance and usefulness of his improvements. In this way, besides, application of these improvements generally follows close upon their invention, which is different from what is remarked in other pursuits: because here competition always makes itself felt. Progress, therefore, is here uninterrupted and lasting. If in the sphere of governmental administration useful improvements can come only from those in power, and occur but rarely; in the industrial sphere they come from all sources, and occur every day in all branches of labor. And what is it that prompts them? Always the same cause—competition. It is the first, we might say the only, cause of this upward march of mankind, and of the continued progress so visible in history, which would have continued ever uninterrupted were it not for the grave political disturbances which have at times broken its course.

I.256.10

—Competition is, therefore, in fact, the true motive power of progress in human society. Suppress this necessary stimulant, and at once the movement slackens, activity dies out, progress ends. Much could still be said to bring this great truth into full relief; but it has been often explained, and is generally admitted by every one who examines and reflects. It is better, therefore, to insist upon another truth, no less important and much less generally understood, namely, that competition is, in the industrial world, which embraces the entire, or almost the entire social world, the principal cause of order. It here plainly takes leave of that other competition of which we spoke above. In the world of governmental administration everything moves, everything is regulated and ordered in obedience to the decisions of superior authority. In industry there is nothing of the sort: there are no orders to be received from higher authority. What then takes the place of this superior absent authority? Who governs this industrial world, in default of a directing power? Chance, some say. It is not chance but competition, which is here the one sovereign regulator. Men often believe they have said everything in favor of this immortal principle when they have recognized that it is a necessary stimulant for producers; but even then they are far from understanding its marvelous effects. Competition is the supreme guide, the infallible regulator of the industrial world; it is the first source of the providential laws by which this world is directed and governed; it is, if we may be allowed to say so, the legislator, invisible but always present, who introduces order and rule into industrial relations so extended, so varied, so multiplied, where, without it, would be but confusion, disorder, chaos.

I.256.11

—Let us picture to ourselves this industrial world in its multiple and complex organization, as it has existed since the exchange of product for product and of service for service became its general law, and since the division of labor was everywhere established. In virtue of this division of labor no one in this industrial world produces, for himself, that is, to consume the fruits of his own production. Each man in it, on the contrary, chooses a special branch of production to which he applies himself, and which, taken in itself and isolated from the rest, would answer frequently to a very small proportion of his needs. In the savage state every man labors directly for himself, and consumes what he himself produces: he pursues a wild animal; he knocks it down with weapons which he himself has made; he tears it up with instruments which are of his own workmanship: he roasts it, with wood which he has gathered with his own hands, and devours it. The entire labor of production is performed by the same hands, and, moreover, the producer and the consumer are one. This savage may, it is true, associate himself with others in his work; but even this association does not effect unity of production, nor the identity of the producer with the consumer. This is no longer the case in our more or less civilized condition, which, thank God, is not of yesterday. In it each man works for his fellow men; he takes his products or his services to the general market; he offers them to all who ask for them, and counts only upon exchange to obtain in return the different objects he requires for his own consumption. One man is a boot maker, and produces boots only; another is a hatter, and makes nothing but hats. This man is a butcher; that one a baker; another is a smith, a distiller, a lamp maker, or a druggist. Of the thousands and thousands of things which human consumption constantly demands, each man produces but one, and adheres to that. He gives his services to whoever demands them, relying, for his own personal consumption, upon what he will obtain by means of exchange from all other producers. Still it rarely happens that any of these different individual labors produces a complete product. There is scarcely a product which is not the result of several successive elaborations, and generally each of those who have concurred in making it can claim but a small portion of it; not to speak of those who never put their hand to any special production whatever, and therefore concur only in an indirect manner in general production. In this state of things, as is readily seen, each man is dependent upon the rest; as a producer, he is bound to an immense chain, of which he forms, so to speak, but one link; as a consumer, he expects everything from his fellowmen, and can obtain the satisfaction of his wants only by a great many exchanges. It is this division of labor which constitutes the strength, the wealth and the greatness of civilized nations, and raises them so far above the savage tribes of the new world; but from it also flow infinite social complications—complications such that it would be impossible for human foresight to unravel them, if they did not unravel themselves, in virtue of a higher pre-existing principle. What is this principle? Competition, which is, in this, truly the light, the guide and the providence of the civilized world.

I.256.12

—And, first of all, since there is in the industrial world as it exists, a necessary, universal and constant exchange of products and services, all these products, all these services must be weighed and measured in some way, in order that we may know on what terms an exchange of them can be effected. Who can weigh them? Who can determine their measure? When we consider the infinite variety of the products which are every day displayed in the great market of the world, all different in their form, in their texture, and in the conditions of their manufacture; when we consider, besides, how many different hands have concurred in such unequal proportions, and in a thousand different places, in the manufacture of each of these products; when we take into account the still greater variety of services rendered which have not resulted in any material product whatever, and which must, nevertheless, be exchanged for real products; when we reflect that we must compare and measure all these products, all these labors, all these services, in order to establish an equivalence among them, we ask ourselves by what superhuman prodigy can this equivalence ever be determined? Is there a human power which would dare, we will not say to establish it, or even to undertake it, but merely to conceive the idea of formulating its laws?

I.256.13

—We are told that men dared to do it at the time of the French revolution. They dared to do it, but under what conditions, and at what price? It was established, in the first place, only for a limited number of the commonest products, and those whose value seemed easy to estimate, without entering into the detailed appreciation of the thousand different kinds of labor which had contributed to their production. And even for these products they did not establish any precise value, but only a maximum, determined from their former value as fixed by competition. Besides, who does not know the results to which these senseless measures led? Incomplete as they were, and although scarcely ever carried into execution, they were none the less the cause of frightful disorder in all commercial relations. If they had been pushed any further, they would have plunged all society into chaos.

I.256.14

—In spite of the inevitable failure of these disastrous endeavors there are still in the world, we know, some discontented spirits, some crazed brains, which dream from time to time of a fixation of relative values by governmental regulation; but even those who cherish these chimerical projects in their unfortunate moments, would recoil, we may be sure, before the difficulties of the task, if they were ever bound by law to accomplish it. Every man possessed of common sense must clearly perceive that it is an undertaking far above the endeavor of any human power, to determine the relative value of all the products and of all the services which are daily exchanged in the world's markets. Who then will establish this regulation? Who will work this wonder? Who? Competition, which alone is able to accomplish it.—"It is competition," says Montesquieu, "which puts a just price upon goods." It is competition, and competition alone, which can put upon goods their just price. But it does this, not only for goods properly so called; it does it also for the thousand different labors which have contributed immediately or remotely to the production of these goods, as well as for the innumerable services which have not entered into any product whatever.

I.256.15

—We should perhaps remark here, in passing, that when economists explain the laws by means of which the prices of everything that is bought and sold are determined, they do not ordinarily point to competition; they point to the principle of supply and demand, and we would by no means find fault with them for doing so. But the principle of supply and demand, as it is here understood, presupposes the action of competition; it supposes this action both in the sellers and in the buyers; for if we leave competition out of consideration, the principle of supply and demand has no longer any meaning; it ceases to produce any of the good results which are justly attributed to it.

I.256.16

—The price which competition puts upon merchandise is, in general, equivalent to the cost of production, in which we must include the necessary profit of the producers. What is the cost of production? Of what does it consist? It consists of the sum of all the expenses, small or great, which have been incurred in a thousand different ways by a thousand different hands, and perhaps in as many different places, to bring a product to the point it reaches at the moment of sale. Who can compute exactly the cost of production? Nobody, not even the seller, who will give you, at most, an exact account of the expenses which he has personally incurred on account of this product, but who will never be able to tell you what it cost, before coming into his hands. If it were necessary to determine, in an official manner, the cost price of only one of the products which are daily offered for sale in the market, a pretty thing it would be to see all the officers of the various governments at work! In vain would they assemble for this purpose the wisest statisticians, the most expert merchants, the most skilled manufacturers, and the ablest administrators; in vain would they add to these a re-enforcement of real economists: all these lights united could not accomplish such a task; there would necessarily occur a great number of errors in their calculations. But, what all the science of such a council could not do for one single product, competition does without an effort for the millions of products in circulation. It does it so well, according to principles so sure, and with a precision so infallible, that there is not anywhere, where competition exerts its full power, a single product which sells regularly either for more or for less than it really cost from the time of its first formation to its entire completion.

I.256.17

—Not that it has not, in this respect, inequalities and variations, some accidental, others permanent. But even these inequalities have also their raison d'être. They are not determined by chance; far from it: they are governed by laws and rules, and all tend to the better ordering of this industrial world, which we have described.

I.256.18

—When there are—as is usually the case, and as it is even essential that there should be—a certain number of producers who are engaged in the same kind of production, the price which competition puts upon their merchandise is not determined for each one of them by the cost price of the merchandise to him, which may and almost always does vary with different producers. The price which competition puts upon their merchandise, is the common or medium cost price. If there are among them some more skillful than the rest, who have been able, by means of better processes or greater attention, to economize more or less in the cost of production, these gain a little more by selling at the same price; they grow rich, and it is only just that they should; it is the legitimate reward of their skill. It is, at the same time, an incentive to all other producers. If there are, on the other hand, producers who, less attentive or less skillful, have allowed their cost price to exceed the medium, they suffer loss and rain; it is the necessary penalty of their carelessness or their incapacity. Most producers keep their cost price at the ordinary level, and these maintain themselves; these do not grow rich, but then they are not ruined.

I.256.19

—Besides these inequalities between producer and producer, which are a necessary stimulant to the activity of all, there are others consisting in variations of the selling price, which frequently occur without any corresponding change in the cost price. These variations are the fluctuations of the market. There is no product which is not subject to fluctuations of this kind; the difference between them, in this regard, is merely a question of more or less. Some are, it is true, for the convenience of consumers, marked at fixed prices in the stores where they are sold at retail, but they have, nevertheless, in the general market and at whole-sale, prices which vary more or less according to times and circumstances. Why, it will be asked, these fluctuations in the selling price which should always be regulated by the cost price? Is not this a game of chance which destroys the equilibrium of things, and overturns the general law we have just stated? Is there not at least an inaccuracy, a defect in the picture? It is not a game of chance, there is no inaccuracy or defect; it is, on the contrary, one of the simple but providential means which competition employs to regulate the world. But to make this clear we must consider another phase of the marvelous order which it establishes.

I.256.20

—It is something great to determine the relative value of products. Without it, as we have said, the industrial world would not last a day. But it is not enough to determine this value. If it is necessary that products be exchanged according to stated conditions, it is no less necessary that producers or workmen be regularly supplied to the innumerable sources of production; in other words, that labor producers be distributed exactly in proportion as they are needed. Here is another problem, as grave and important as the first, and which human wisdom would find itself powerless to solve, if there were not always present this mysterious power, which guides men without their knowledge. If in the industrial world products are innumerable and of infinite variety, the different kinds of labor which concur in the formation of these products are neither less varied nor less numerous. All these labors are, besides, necessary, and in almost the same degree. Their dependence one upon another is such that no one of them can be neglected without the others suffering thereby. How, for instance, could the baker make his bread if the miller had forgotten to grind his wheat? And how could the miller give the baker his flour, if the farmer had forgotten to sow, to reap, and to thresh his grain? How could the farmer, in turn, give the miller his grain, if the plowwright and the blacksmith had not made in time the necessary implements for plowing, harvesting and threshing this grain? The work of the blacksmith is no less dependent upon that of the miner who takes the iron from the mine, than that of the plowman is upon the work of the blacksmith. In addition, all are equally dependent upon the work of the carrier, who transports their respective products, as well as upon the services of the public agents who provide for the security of these products while being transported. Human industry is like an immense chain, all the links of which are united. Let one of these links be broken, and the whole chain gives way. It must, therefore, be so arranged that none of its works will ever be abandoned or omitted; that they will all be accomplished exactly at their proper time, and in proportion to the needs of every day. Who is charged to provide for such a want in society? Nobody; and we may add that nobody could do it. The different employments of industry, the labors of all kinds which are performed in all the different degrees of production, are so numerous that no person could even count them, much less provide for them. To see that every one of these innumerable forces is kept daily at work, is a task so far above all human foresight that it would be absurd to dream of intrusting it to man.

I.256.21

—It has, however, been dreamt of at times. Under the pretext that the satisfaction of the wants of society was abandoned to chance, it was seriously proposed to confide to a self-styled social power the duty of regulating the different employments, and methodically dividing all available forces among them. But before disposing of these forces, and apportioning them, let this power determine to attempt merely to name them exactly or completely; the sight of the insurmountable difficulties of this first task, will perhaps convince it that it has hardly understood, until the present moment, the incalculable extent of what it has dared to undertake.

I.256.22

—Some have compared the organization of industry to the organization of an army, and thought that, as men had succeeded perfectly in regulating the movements of an army, they could, in like manner and just as easily, regulate the movements of industry. How pitiable a comparison! As if the organization of an army, where their occupations are all alike, and vary, at most, from one branch of the service to the other; which has but one object for all; which can and must be divided regularly and systematically into regiments, battalions, companies, etc.; which always resides in certain chosen places, and under the control of chiefs; as if the organization of such an assemblage, we say, could be for an instant compared to the organization of industry, whose employments are so numerous; which uses different processes and instruments in each of these employments; which must be divided among an infinite number of different places, so as to be at all the sources of production, and distribute its forces everywhere in unequal groups, according to the needs and resources of the respective localities; which, by its very nature, refuses all regular division and uniform movement; and for which unity of direction would be death. To compare these two things, is to compare an atom to a whole world.

I.256.23

—We repeat, therefore, there is no human power which can foresee and know all the work to be performed in the different channels of industry, or which, for a still stronger reason, can provide for its doing. What then will do it? The same mysterious and sovereign power that has already regulated the relative value of exchangeable products, competition—a power much more enlightened, and much more active and vigilant than any of those to which the care of public interests is ordinarily confided.

I.256.24

—The means which it employs are, moreover, very simple. The first is, to keep all its particular interests constantly on the alert, by according the favors of fortune in all things only to the most vigilant, the most active and the most skillful. The second is, to direct the particular interest of each man to the satisfaction of the wants of his fellowmen. As long, in fact, as competition acts alone, and violence or fraud do not interfere, the only way for a man to get the better of his rivals is to provide better than they the means of satisfying in a more prompt, more suitable and more complete manner the wants of those around him. Thus, by the aid of competition, if there are in society such as civilization has made it for us a million different wants, there are also several millions of eyes incessantly open to discover these wants, several millions of minds incessantly occupied in studying and understanding them, and several millions of arms ever eager to supply them. The duties to be performed in the various branches of industry are very numerous, it is true; but the eyes which watch them are still more numerous. There is no danger that any necessary or even useful employment will escape this active and general vigilance; no sooner does a branch strike or languish, than a crowd of competitors offer to take its place. Thus it is that in this long and multiple chain of industry, which coils about itself in a thousand different ways, and which is made up of innumerable links, there is never any break or gap. Thus it is that this incredible prodigy, before which human nature must how, is accomplished in a manner so natural and so simple that we are no longer even surprised at it.

I.256.25

—But it is not enough, however, that all the occupations of industry be filled continuously and completely, they must also be filled in the proper proportion, that is, the number of men who labor at them, and the amount of energy or capital consecrated to them, must always be proportioned to the real extent of the work to be done. Here again we propound ourselves this eternally recurring question: Who in the world could furnish this just proportion? And we are forced to reply once more. No one, not even the producers. Competition alone can do it, and competition alone does do it, competition alone instructs the world in this regard, beginning with the workmen themselves, who could not determine, without its and, the amount of labor necessary even in the special branch of production in which they are engaged. And how does competition instruct them? By increasing or diminishing the mean profits in each branch of production, according as the labor applied to this branch more or less fully corresponds to the extent of its wants. If there be too much labor applied to any certain production, at once, thanks to competition, wages decline, and the laborers are thereby warned to seek employment elsewhere. If, on the contrary, there be a scarcity of labor, wages go up, and this is a warning to those who are engaged elsewhere to betake themselves in greater numbers to where the scarcity exists. Thus, by the sole influence of high or low wages, labor is distributed and divided with an almost infallible precision among the different branches of production, according to the measure of their needs, and equilibrium is always maintained between the work to be done and the labor assigned to it. Here it is that we most recognize the necessary and providential effect of those fluctuations of the market of which we spoke above.

I.256.26

—The wants of society are not ever the same; on the contrary, they vary from day to day, in regard to most objects of consumption. Suppose, therefore, that by a marvelous effort of some public power, the equilibrium of the different branches of labor had been exactly established to a given day, so that, for each piece of work to be done there would be at hand a corresponding amount of labor; still nothing would have been done, if allowance had not been made for the fact that this amount of labor varies for each occupation, according to the variable measure of its wants. To day, for instance, a capital of 10,000,000 francs and a force of 1,000 workmen are applied to a particular branch of production, and they are nearly the exact measure of what it needs at present; but to-morrow its needs change; the product which this branch of industry supplies is most in demand where there is least of it, this is what happens every day, not only for articles of fashion, but for many others. The capital and labor devoted to this kind of production find themselves, therefore, all at once neither insufficient or superabundant; they must be increased or diminished in order to preserve the equilibrium. Who will regulate these frequent and rapid variations? Sometimes, even without the wants being diminished, production may, with the same amount of capital and labor, become all at once superabundant, simply because the processes of manufacture have been simplified. Who will restore it to its proper proportion? Always the same principle, competition; and the means which it employs for this end consist precisely in these variations in price, in these fluctuations of the market of which we are speaking.

I.256.27

—They are necessary and daily warnings for the producers. If prices rise, they understand that the merchandise is becoming rare, and that they must hasten to supply themselves with more of it; if, on the contrary, prices fall, they understand that the market is overstocked, and that they must slacken production. Thus production is constantly kept within bounds, and taught to limit itself in all its branches by the extent of man's wants. Hence that marvelous equilibrium of disposable resources and wants to be satisfied, which is the normal state of civilized societies, and at which we might well be surprised if we could experience surprise at anything we see every day. When the changes in the extent of the demand are considerable and sudden, as sometimes happens, it is not always possible, it is true, to reduce or increase the production instantly in the measure desired, and hence some accidental disturbances occur here and there; but in this case the change in the selling price, which continues as long as the derangement exists, does not cease to warn and annoy the producers, and to urge them to reduce or increase their labor to the desired proportion.

I.256.28

—Economists generally say too little about competition, at least in express terms. They rarely even pronounce its name. They are incessantly invoking the principle, however, in disguised terms. It is impossible, in fact, to establish or to carry out any of the laws which political economy has produced, without the intervention of competition, for all these laws are based upon it. In the work of production, as in the distribution of wealth, competition appears throughout, not as an accidental fact, but as the sovereign regulator. It is competition that regulates the price of goods; determines salaries and profits; that fixes a ground rent when there should be one; which, in a word, establishes the rate of remunerations and values of all sorts. They say, and say truly, that it stimulates producers; but it does much more; it distributes, classifies and arranges them. If it is the stimulant of production, it is also its check. It is a light and a guide still more than an incentive. We may truly say that industrial order, as it exists, is its work. Imagine, if you can, even one economic truth, even one of the rules and laws which the science promulgates, of which it is not the source. Economists, it is true, invoke it incessantly, but they do so nearly always without naming it.

I.256.29

—In some respects this matters but little. Whether they appeal to this principle by name, or designate it by the circumstances it implies, by its action and effects, it is ever in reality the same thing. It does not on this account lose any of its essential truths. In consequence of this reserve or forgetfulness of the masters of the science of economy, however, competition has not in their works the place, which is due to it; this immortal principle is not as clearly manifested as it should be, nor is its grandeur sufficiently understood. It is this, perhaps, which has given a certain credit to the puerile declamations of those who attack it; and this also explains how even the adepts in the science have sometimes dishonored it by the unworthy capitulations to which they have submitted it, or by the incredible feebleness of the arguments which they have used in its defense.

I.256.30

—It has sometimes been said that industrial competition was a new principle, inaugurated in 1789, and one of the fruits of the French revolution. As if humanity could have reached the point of civilization, which it had reached at this epoch, without knowing this powerful lever, this sovereign guide, so necessary to the development of its activity. After what we have just said, it seems to us superfluous to demonstrate the error of such an hypothesis. Competition was not born in 1789; it was born in the very cradle of human society, which it has led step by step, from its state of primitive barbarity to the point of civilization which it has now reached. The truth in the case is, that competition, although it has never ceased to enlighten and govern the world, has been submitted at all times to restrictions of more than one kind, the sad effects of the errors or evil passions of men; these restrictions were more numerous previous to 1789, at which period some of them were suppressed, though they did not, alas, entirely disappear.

I.256.31

—If competition had always reigned without opposition, if it had been able to develop itself in all its plenitude in the midst of human society, such is the virtual strength, the power and inexhaustible fecundity of this principle that humanity would have marched from progress to progress, and with unceasing rapidity, toward a future, of prosperity, wealth and general well-being, of which at present, perhaps, it has not the least conception. We can judge of this from the progress it made in certain countries during the intervals, always too brief, in which it enjoyed a satisfactory, if not complete, liberty. But this liberty was needed in the past, and is needed in the present. The action of competition supposes the liberty of man at least in his industrial relations. In fact, it supposes, first, absolute spontaneity and freedom between the contracting parties, between the seller and the buyer of an article, between him who offers a product and him who accepts it; for if one of the parties can impose his conditions on the other there is no longer any competition, there is no longer even a contract. It supposes, moreover—and this is also an essential condition—that each one be free to go to a third party, when he is not satisfied with the conditions offered him. Now, who does not know to how many obstacles this two-fold liberty has been subjected at all times? These obstacles arise sometimes from the spirit of anarchy and disorder, and from the absence of a tutelary authority able to protect the contracting parties, and sometimes from abuses of this authority.

CHARLES COQUELIN.

Start PREVIOUS
259 of 1105
NEXT End

Return to top