What is competition?
Competition continues to be poorly understood by many economists. Here is an extract from a paper written more than 26 years ago by Australian economist Dr Evan Jones *:
” Two dominant versions exist. Version one depends on large numbers of small firms inhibiting the accession of any to a position of market dominance. This is the stuff of the textbooks. Version two depends on all firms of whatever size and product fighting it out to the death (Social Darwinism). Its second version has much currency in right-wing think tanks.
“The first version requires strong regul- atory action for its success. The second insists that regulatory action is what inhibits the system from working. Public representations to the electorate of the advantages of competition mix these versions unashamedly. Both can’t be right. The details matter as to what a Trade Practices Commission might do or whether we have a Trade Practices Commission at all. “
*Source: Evan Jones (1991), “Down with Economists: Australia would be a happier place without economists”; The Bulletin, 8 Oct 1991, pp 86-88