Competition is beautiful. With initial thought, you might think differently, but competition is really where efficiency meets elegance. Picture a soccer game of twelve-year-olds in a regional championship game. Whoever wins will not receive any media recognition. They will not move onto a state championship because there is none. They will not even receive any money. All they will receive is a measly 5-inch trophy. Despite the lack of awards, the kids play their hearts out and finally a winner is decided. Now, backtrack over the previous few months preceding this game. Each team put in hours on hours of sweat, grass stains, and sprints to get to where they were at the regional championship. Even though there was only one final winner, both teams benefited. Both rose to a level of skill that surpassed others, just as the other teams in the league did the same to surpass other teams. Moreover, the spectators, who have not had to labor like the soccer players have, benefit as well by watching one amazing soccer game. Now, anyone who does not agree with such a prospect should perhaps consider acquiring some common sense. Needless to say, many people who would agree with the above text will without hesitation totally disagree with the following.
And that is that competition in the marketplace is also where efficiency meets elegance. Still agree? Good. But consider this. Because of the very nature of competition, most, if not all, of common and accepted tax and regulation within the United States economy imposed on by the national government should be abolished. Ah yes, now you disagree. Let me explain. Nothing works better for ALL parties in an economy than true free market competition. Competition allows both the consumer and producer to benefit. Take televisions, for example. LCD TV prices have dropped dramatically since their introduction to the marketplace. In fact, according to WitsView’s 1Q09 LCD TV retail price survey, mainstream LCD TV prices have dropped 7.5% over the last quarter. The dramatic drop is not due to some government agency imposing a mandate that TV manufacturers reduce their prices or else. Quite the contrary, competition is all to blame. There are at least a dozen mainstream TV manufacturers out there all trying to get you, the consumer, to buy their TV. What do they have to do to convince you? They improve their picture quality, increase the number of features, increase the size, decrease the size, improve the form factor, and of course, reduce prices. They all do this because they must. They simply cannot survive if they don’t, and time and time again, we see companies that don’t compete well against other companies, whether the reasons lay behind inferior products or inferior prices, and with due time, we never see the companies again (Circuit City ring any bells?). This is the essence and the beauty of competition. We all benefit. The company with the best TV will get the most business, and in turn, the most profit, while we will get the best TV with the best price, and as soon as the other companies come out with better TVs, they will also see the benefits.
Now I turn to oil companies. Those nasty, greedy, selfish oil companies. When we were constantly hearing about the record taxes they were paying, oh wait, I mean the record profits they were earning, I could have thrown up. All I heard was how the oil companies needed to be taxed more and needed tougher regulation. First of all, what is wrong with a business making money? Oh, right, right, because it’s money we can’t have. But besides that, and bear with me here, what if we actually reduced the taxes that the oil companies have to pay and reduced the regulations that they must abide to. And I don’t mean just a little, I mean big time. Just imagine if the oil companies’ taxes were slashed by 75% and regulations were cut drastically. Uhh… they’d earn even more profit, and we’d lose even more money…. WRONG! Oil companies, just with all companies, are looking for business. Right now, they can only invest so much to improving their product and the efficiency at which they produce their product because they must pay an outrageous corporate tax. With more money to invest, imagine what, for example, gasoline prices would look like? Do you really think that the companies would continue to keep their prices high, even though they would have lower tax rates? Just think if that were the case. One oil company would realize that more people will buy their gasoline if they simply lowered their prices under the competing companies’ prices. All of a sudden, the other companies that chose to keep their prices high would realize that they should lower theirs as well if they want people to keep buying their gasoline. Suddenly, what you would have is a domino effect where all the oil companies would continue to strive to make their prices as low as possible (through increased efficiency in the refining process, shipping, etc.) in order to convince you to buy their gasoline. Again, every single person involved benefits.
This same concept can be applied to anything and everything that exists in the economy, from pencils to credit cards to health insurance. As long as there is competition, companies will continue to improve their products or services and make profit while the consumer will continue to sit back and enjoy the benefits. The problem continues on with a tremendous and ridiculous corporate tax rate that discourages competition, as well as erroneous regulations set by bureaucrats over companies that only want to provide the best product for their consumers. All you have to do is look at countless examples where competition has benefited everybody, like the computer market, internet market, cosmetic market, food market, retail market, sports merchandise market, automobile market, insurance market, furniture market… I could go on and on. Every single one of those examples contain the most powerful and self-regulating forcethat powers our economy and benefits everyone involved–competition.
Samuel Congiundi ’12