| Abstract [eng] |
To economists, competition no longer meant rivalry and enterprise. Instead, it meant the equation of price and marginal cost. Most important, it meant that there must be many firms in non-concentrated industries. Once economists began to define competition in terms of market structure, they became more and more enamored with antitrust regulation as a way of forcing the business world to conform to their admittedly unrealistic theory of competition. The two definitions of competition have drastically different implications about the welfare consequences of monopoly and perfect competition. The notions of competition as a market structure and competition as a dynamic process are not only descriptive but normative as well. That is, they do not merely describe the nature of competition; they inform us that competition is socially beneficial, although in different ways. Competitive markets are socially preferable to other kinds of markets in terms of allocative and productive efficiency. On the other hand, neo-Austrians believe that their kind of competition is also socially desirable, because it promotes efficiency and social welfare. Since competition is a process, it can lead to a variety of market structures that can give efficient outcomes. It will only generate a competitive or atomistic market structure where market conditions and production process favour the operation of very small, efficient firms. .. |
