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Tuesday, December 26, 2023

Is ‘Competition’ the Enemy of Cooperation? Here’s What Bastiat Thought

Paradoxical though it may seem, competition is a crucial component of economic harmony.

Image Credit: Steve Buissinne - Pixabay

Americans are living in a world where cooperation (usually meaning “you should do what I want you to”) clearly wins the rhetorical and political popularity contests compared to competition. For instance, just recently, I noticed an article entitled “Market cooperation, not competition, will achieve clean energy goals,” on behalf of the coercive political “greening” those connected to the halls of power want to impose.

However, as E.C. Harwood put it decades before we raced down the slippery slope to where we are today, “That cooperation is the opposite of competition seems to be generally assumed.” But importantly “in modern times when many advocates of cooperative enterprise are criticizing competition,” we should note that “careful analyses of the economic activities for which these words are names reveal that ‘free competition’ and ‘voluntary cooperation’ are two different names for the same economic behavior.” Or as F. A. Harper wrote, “competition must always accompany cooperation in a free society. The choice of where and with whom to cooperate, and where and with whom to compete… must ever face you and me.”

Roughly a century before those observations, in “Competition,” Chapter 10 of his Economic Harmonies, Frédéric Bastiat could already write that “There is no word in all the vocabulary of political economy that has so aroused the angry denunciations of the modern reformers as the word ‘competition.’” And his understanding of the issues involved can still inform us today. Here are some highlights from that insightful chapter.

Competition Is Freedom, Which Is the Absence of Oppression

What is competition?…Competition is merely the absence of oppression. In things that concern me, I want to make my own choice, and I do not want another to make it for me without regard for my wishes; that is all.

Competition is freedom. To destroy freedom of action is to destroy the possibility, and consequently the power, of choosing, of judging, of comparing; it amounts to…destroying man himself.

[T]his is the ultimate conclusion our modern reformers always reach; for the sake of improving society they begin by destroying the individual, on the pretext that all evils come from him, as if all good things did not likewise come from him.

Disagreeing with the ‘Reformers’

Wants should be judged by those who experience them, satisfactions by those who seek them, efforts by those who exchange them. Is it proposed in all seriousness to substitute for this eternal vigilance by the interested parties a social authority charged with determining the intricate conditions affecting countless acts of exchange?

Is it not obvious that this would mean the establishment of the most fallible, the most far-reaching, the most arbitrary, the most inquisitorial, the most unbearable, the most short-sighted…of all despotisms?

We need only know that competition is merely the absence of any arbitrary authority set up as a judge over exchange.

Competition, which, indeed, we could call freedom [i.e., the ability to exercise my rights over myself and my possessions in matters that affect me]…is the most progressive, the most egalitarian, the most universally leveling of all the laws to which Providence has entrusted the progress of human society.

It is this law of competition that brings one by one within common reach the enjoyment of all those advantages that Nature seemed to have bestowed gratis on certain countries only. It is this law, also, that brings within common reach all the conquests of Nature that men of genius in every century pass on as a heritage to succeeding generations.

Competitive Freedom Expands Options for All

The accusation that competition tends toward inequality is far from true. On the contrary, all artificial inequality is due to the absence of competition.

While the socialists find in competition the source of all evil, it is actually the attacks upon competition that are the disruptive elements working against all that is good.

The total number of satisfactions that each member of society enjoys is far greater than the number that he could secure by his own efforts.

Competition Transforms Self-Interest into Harmony

[S]elf-interest is that indomitable individualistic force within us that urges us on to progress and discovery, but at the same time disposes us to monopolize our discoveries. Competition is that no less indomitable humanitarian force that wrests progress, as fast as it is made, from the hands of the individual and places it at the disposal of all mankind. These two forces…work together to create our social harmony.

Is competition not the spur that turns men toward productive and away from unproductive careers? Its natural action is, therefore, to assure greater equality and at the same time a higher and higher social level.

Let us, however, understand what we mean by equality. It does not imply identical rewards for all men, but rewards in keeping with the quantity and quality of their efforts.

From competition comes the process that transfers into the communal realm advantages originally held by certain individuals only. The amount of effort once required for a given result grows constantly less, to the benefit of the entire human race, which thus finds that its circle of satisfactions and leisure grows larger from generation to generation, and that its physical, intellectual, and moral level rises. By virtue of this arrangement, so deserving of our study and everlasting admiration, we clearly discern mankind moving upward.

Harmony in a World That Includes Evil and Error

I have not sought to deny the existence of evil…since man has been given free will, the term “harmony” need not be confined to a total system from which evil would be excluded; for free will implies error, at least as a possibility, and error is evil.

Social harmony, like everything else that involves man, is relative; evil constitutes a necessary part of the machinery designed to conquer error, ignorance, and injustice, by bringing into play two great laws of our nature; responsibility and solidarity.

Since pauperism [poverty] is an existing fact, must its existence be imputed to the natural laws that govern the social order or rather to human institutions that perhaps work contrary to these laws or, finally, to the victims themselves, who by their own errors and mistakes must have called down upon their heads so severe a punishment?

Competition in modern society is far from playing its natural role. Our laws inhibit it at least as much as they encourage it; and to answer the question whether inequality is due to the presence or the absence of competition, we need only observe who the men are who occupy the limelight and dazzle us with their scandalous fortunes, to assure ourselves that inequality, in so far as it is artificial and unjust, is based on conquest, monopolies, restrictions, privileged positions, high government posts and influence, administrative deals, loans from the public funds—with all of which competition has no connection.

Antagonism or Harmony?

Some superficial commentators have accused competition of creating antagonisms among men. This is true and inevitable as long as men are considered solely as producers; but consider them as consumers, and you will see that competition binds individuals, families, classes, nations, and races together in the bonds of universal brotherhood.

It is inevitable that all men, in so far as they are producers, should join in a chorus of imprecations against competition. They can become reconciled to it only when they take into account their interests as consumers; when they look upon themselves, not as members of a special group or corporation, but as men.

In Bastiat’s conclusion to his original edition of Economic Harmonies, he again returns to some of the themes of Chapter 10.

I have tried to explain how…private property…constantly renders available to mankind an increasing number of satisfactions…A steady approach by all men toward a continually rising standard of living—in other words: improvement and equalization—in a single word: HARMONY.

All the social harmonies are contained in germ in these two principles: PROPERTY and LIBERTY…all the social discords are merely the extension of these two contrary principles: PLUNDER and OPPRESSION.

[L]iberty implies and includes property.

Liberty! Therein, in the last analysis, lies the source of harmony. Oppression! Therein lies the source of discord, [with] its aim the unjust seizure of property.

Plunder!…will disturb, to the point of making them unrecognizable, the operation of the harmonious laws that we have worked to discover and describe.

[E]verywhere we see man…saying to his brother: Yours be the toil; mine, the fruit of that toil.

Bastiat summarizes the relationship between liberty and competition, connected by the fulcrum of private property rights, that was his theme in Chapter 10: “If they leave me my liberty, competition also remains. If they wrest it from me, I become only their slave.” That is worth remembering today, as the essence of attacks on both liberty and competition has continued to be the violation of others’ property rights, enslaving people to others’ dictates.

  • Gary M. Galles is a Professor of Economics at Pepperdine University and a member of the Foundation for Economic Education faculty network.

    In addition to his new book, Pathways to Policy Failures (2020), his books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).