Competition. Competition as a relationship between spontaneity and organization (the most important)

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Competition. Competition as a relationship between spontaneity and organization (the most important)

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8. Competition as a ratio of spontaneity and organization

Market as a system is a certain equilibrium combination of two principles - spontaneous, competitive and organizing, monopoly.

The basis of the spontaneity of the market, the competitive beginning is the participation in the competition of many independent, independent commodity producers with different production conditions, individual characteristics of the goods. They compete to secure their own interests. Such competitiveness of economic entities is characterized by the possibility of independent actions to effectively limit the ability of each of them to unilaterally influence the general conditions for the circulation of goods in the relevant market.

Organization, the monopoly start presupposes the presence of a narrow group of producers of a particular product, elements of collusion, a certain uniformity of requirements, quality standards; orderly, coordinated, foreseen actions. The offer of enterprises occupying a monopoly position is opposed in the market by the aggregate demand of all buyers of the goods within the product and geographical boundaries of the relevant market. The monopolies produce appropriate forecasts, determine the strategy in the field of production, using for this extensive statistical information, a system of sectoral and macroeconomic models.

The combination between competitive and monopoly principles should be optimal. For each specific conditions, such an optimum is the maximum of competition with a minimum of monopoly. Deviations from this optimum are fraught with great losses for society.

The market mechanism, where there is an optimal combination of competition and monopoly, ensures that the structure of production corresponds to the structure of social needs, stimulates the introduction of new equipment and technology, encourages the best producers, and punishes the worst.

The ratio of spontaneity and planned production in the process of developing a market economy. XIX century: free competition, fluctuation of prices around the equilibrium price under the influence of D and S, overflow of resources, unlimitedly flexible adaptation of firms to market conditions, a clear organization of production within firms; XX century: dependence of small and medium-sized businesses on market conditions, price fluctuations around the equilibrium price under the influence of D and S, the transfer of resources between non-monopolistic industries, the influence of large corporations on market prices and profits, the conscious strengthening of corporations by their affiliates on the basis of contractual agreements and portfolios government orders, economic development program.

Author: Ilyina V.N.

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