Posts tagged with: competition

monkIn a lecture on markets and monasticism at Acton University, Dylan Pahman gave a fascinating overview and analysis of the interaction between Christian monasticism and markets. He’s written on this before and has a longer paper on the topic as well.

In the talk, he highlighted a range of facts and features, from monastic teachings on wealth and poverty to the historical realities of monastic communities and enterprises. Over the centuries, monasteries have contributed a host of products and services to civilization and culture, often countering the common assumption that all such communities are flatly against trade, production, and wealth creation.

One point that stood out in particular was Pahman’s summary of a recent study by Nathan Smith, in which Smith ponders how these communities have managed to succeed for so long, particularly given their many (internally) socialistic traits. According to one study, the average longevity of monasteries is 463 years(!), which is far longer than the lifespan of most companies and states, never mind your run-of-the-mill secular commune (Portlandia variations included).

There are a variety of forces that may contribute to this, including unique pressures of lifelong commitment, corresponding theological reinforcement, etc. But when it comes to some of the more universal traits that help monastic communities thrive, they may offer some lessons to help orient and affirm our broader thoughts about community in the context of work, trade, enterprise, and worship. (more…)

Blog author: dpahman
Wednesday, August 20, 2014

Reading through the German economist Walter Eucken’s work The Foundation of Economics (1951), I came across one of the most helpful charts for economic analysis I have yet to find. In it, Eucken gives every possible form of market in a single table:

Eucken Chart

The Foundation of Economics, p. 158

Eucken adds four qualifications that are important to keep in mind:

  1. “These forms of market are actual forms which have been or are to be found in actual economic life (often blended with one another, and existing alongside the forms of a centrally directed economy). They are not given a priori. They are discovered with their distinguishing characteristics by studying the planning data of those taking part in the market….”
  2. “Under each particular form of market a man can act according to different principles, for example, that of maximum net receipts or that of optimum output….”
  3. “Each of these forms of market can appear in four types: both open, both closed, or closed on either side only.”
  4. “Fixing of prices by the state occupies a special position, since it can follow any form of market and has different effects accordingly…. For example, the significance of coal prices being fixed by the state varies according to whether perfectly competitive, oligopolistic, or monopolistic supply, or some other form of market, exists, or whether both sides of the market are open, or whether the supply side is closed by an investment veto. Governmental price-fixing is to be treated as a variant of the different market forms and not as a special market form of its own.”

So, what does this amount to? (more…)

In an excerpt from the splendid PovertyCure series, Michael Fairbanks offers a helpful bit on why our attitudes about competition matter for economic development:

I can predict the future of a developing nation better than any IMF team of economists by asking one question: “Do you believe in competition?” When I go to Venezuela and I say, “do you believe in competition?,” they say “competition means the rich get richer and the poor get poorer.” They say “competition is the unnecessary duplication of effort because you have two firms doing the same thing.” They say “competition is a quaint North American concept that doesn’t apply here.”

But when I go to Silicon Valley and I say,“What do you think about the word competition?,” they say, “Well, I love competition, because even when I lose, I learn something. And my success is due to the fact that I speeded up my failures, and the only way to fail was to compete, and figure out where I wasn’t good enough.”

As Hayek put it, competition is a discovery procedure. If we neglect, distort, or downplay that process, we can expect the outcomes of discovery — the fruits of our sacrifice and service — to digress accordingly.

PovertyCure DVD Series

PovertyCure DVD Series

Join host Michael Matheson Miller on a journey around the world to explore the foundations of human flourishing, and learn how people are moving toward partnerships and pursuing entrepreneurial solutions to poverty rooted in the creative capacity of the human person made in the image of God. Meet religious and political leaders, entrepreneurs, missionaries, and renowned development experts, and discover the powerful resources Christianity brings to the pursuit of human flourishing.

Visit the official PovertyCure website for more information.

Blog author: jsunde
Tuesday, December 31, 2013

????????????????????????????????????In a recent piece for the Wall Street Journal, Emory economics professor Paul H. Rubin makes an interesting argument about the way economists tend to over-elevate and/or misconstrue the role of competition in the flourishing of markets.

“Competition plays a supporting role,” he argues, but “cooperation makes markets thrive”:

The way we use the term competition instead of cooperation fosters anti-market bias. “Competition” carries a negative connotation because it implies winners and losers, and our minds naturally feel sympathy for the losers. But cooperation evokes a positive response: It’s a win-win situation with no losers. And in fact the word competition doesn’t depict market activity as aptly as the word cooperation. The “competitive economy” would be better described as the “cooperative economy.”

Consider the most basic economic unit, the transaction. A transaction is cooperative because both parties gain from a voluntary exchange. There is competition in markets, but it’s actually competition for the right to cooperate. Firms must compete for the privilege of selling to consumers—for the right to cooperate with consumers. Workers compete for the right to cooperate with employers. Competition matters because it ensures that the most efficient players will gain the right to cooperate on the best terms available. But competition plays a supporting role, while cooperation makes markets thrive. (more…)

David Brooks recently took on the conservative movement for relying too heavily on pro-market arguments and tired formulas rather than emphasizing its historic features of custom, social harmony, and moral preservation.

As I’ve already noted in response to the Brooks piece, I agree that conservatism needs a renewed intellectual foundation brought about by a return to these emphases, yet I disagree that a lopsided devotion to “economic freedom” is what’s stalling us. If we hope to restore traditionalist conservatism, we’d do well to recognize that this means restoring economic conservatism along with it. Brooks is upset that dogmatic pro-market folks have seized the Republican Party, yet this is the same Republican Party that nominated the architect of Romneycare and can’t seem to get serious about the deficit.

Conservatism is faltering all around, and the reasons for each “sect’s” demise are more or less interrelated. As I’ve written elsewhere, we need to restore a holistic conservative imagination that ties its social and economic strains together by grounding them both in Russell Kirk’s “enduring moral order.”

For David Brooks, restoration is all about “balance,” but for the true conservative, it needs to be about integration.

In this week’s Acton Commentary, “Spiritual Competition and the Zero-Sum Game,” I examine a standard complaint against the market economy: that it engenders what Walter Rauschenbusch called “the law of tooth and nail,” a competitive ethos that ends only when the opponent is defeated. In the piece, I trace some of the vociferousness of such claims to the idea of economic reality as a fixed or static pie:

The moral cogency of the argument against competition is enhanced in a framework where the goods that are sought after are static. Whether conceived of in terms of market share or the size of a firm, business and political leaders often use language that makes it seem as if economic gain comes at the expense of others.

Gordon Rupp and Mo FarahWhere goods are static, or otherwise limited in some way, the competitive stakes are raised. Of course we see this not only in market activities but in other areas of life as well, and perhaps these competitive realities are no better illustrated than in competitive sports. We saw numerous examples of competition in the past fortnight of Olympic coverage that ran the gamut from the good, the bad, and the ugly. One of the most memorable moments for me was the conclusion of the men’s 10k track race, when Mohamed Farah of the UK bested his American friend and training partner Galen Rupp. Here are two fierce competitors who embrace, and Rupp celebrates not only his own silver medal but his friend’s great gold-medal performance.

As I conclude in the commentary, competition that drives us to do and be better, in both spiritual and material terms, “ought to be celebrated rather than scorned.”

July 31st marks the 100th birthday of the economist Milton Friedman. Celebrations planned by proponents of free-markets will take place across the country to recognize and pay tribute to his legacy and the power of his ideas. I am speaking at an Americans for Prosperity event in town on the topic of school choice on his birthday.

My commentary this week is on school choice. Nobody has influenced and shaped the school choice movement more than Friedman. In my piece, I stressed the moral power of pivoting away from bureaucratic centralized schooling and encourage greater parental involvement in education. Simply put, school choice allows for parents to better shape the spiritual formation of their children. Nobody can make better decisions about the education of their children than the parents.

Finally, schools that have to compete for students and tax dollars will be forced to improve and be innovative for today’s complex and global marketplace.