This social system is not the creation of any man or set of men, but has grown of itself out of the tendency among men to secure the things they wish for with the least exertion. And its theoretical working is marvellously perfect. Any thing which men desire sufficiently to exert themselves to secure it, can be bought with a small part of the time and labor, measured in money, which would be required if each made it for himself. Not only this, but the aim of every man is to do the greatest service to the world and best meet its desires, thus securing in return the greatest rewards for himself. Rivalry among purchasers constantly tends to increase the rewards of the producers, while competition among the latter tends toward the furnishing of a better article at a smaller price. These two forces hold each other in stable equilibrium, for a variation tends always to bring things back to their normal condition.
Let us look more closely at the theory of the competition among producers. We see that, speaking broadly, all occupations are competing with each other. If changes in the supply or demand raise the rewards in any calling, men will leave other work to engage in it. Men by the pressure of competition are forced to seek out the easiest and most direct methods, and to learn how to secure the greatest results with the least expenditure of labor and material.
It is this principle which lies at the very root of our industrial development. Men have so striven to meet each other's competition and outstrip each other in the production of superior goods at low prices, that the cost of the staple articles of consumption, measuring by the labor required to produce them now and the labor required by the clumsy tools and hand work of a century ago, is from a tenth to a hundredth of the cost in those days. It must be remembered, too, that this system of competition is in accordance with the sense of inalienable personal rights which is implanted in the breast of every man. The work of my hands and brain are my own. In disposing of it for a price, I have a right which none may deny to obtain such a sum as I can induce any one to pay me. If I choose to sell it for less than my neighbor, it is my right. In short, the open market is open to all; and every man has a right to sell there his labor, his skill, or his goods, of whatever sort he can produce, at such a price as he can obtain. The same is true of the buyer. I have a right to go into the open market and secure such goods as any one wishes to sell me at the lowest price for which he will part with them. A curious illustration of this sense of personal right is the custom duties on imported goods. It is an evidence of this inherent feeling of a natural right that both public opinion and the law hold that it is a much less serious crime to smuggle than to steal. There are a dozen people who would smuggle, if tempted to do so, to one who would steal. Another illustration is the opposition shown to sumptuary laws on the same grounds.
It is to be said that the fact that competition lies at the foundation of our industrial civilization, tersely expressed in the saying, "Competition is the life of trade," has long been known, and, to a certain extent, appreciated. The common law, based on the decisions of men most eminent for wise insight and sound judgment, has always held that combinations to restrict competition and establish a monopoly were contrary to public policy, and the protection of the law has invariably been refused, whether they were combinations of labor or of capitalized industries. The establishment of labor combinations, indeed, was long a criminal offence, as we have pointed out more fully in the chapter devoted to that subject. It must be said, too, that the principle has come to be generally, though rather blindly, understood by the masses of men. It is recognized, though perhaps not very clearly, that competition lowers the prices of goods, and that this benefits every consumer. Let a proposition to build a competing railroad line, or a competing electric-light plant be submitted to popular approval, and, under the impression that they are benefiting themselves, hard-working men will cheerfully assume heavy burdens of taxation to aid the new enterprise. So blind and unreasoning indeed, is this popular abiding faith in the merits of competition, that it has been responsible for some of the greatest wastes of wealth in unproductive enterprises that have ever been known.
We have now examined the theory of universal competition as commonly accepted at the present day, and it is rightly considered a fundamental principle of society. It is the practice of most economic writers of the orthodox school to lay great stress on the importance of this fundamental principle, and enlarge upon its various manifestations. The many attempts to limit and destroy competition, which we have studied, they consider merely as abnormal manifestations which are opposed to law, and so not worth while considering very fully. But we have seen clearly to what extent the destruction of competition has gone on; and, with this knowledge, the question almost inevitably occurs to us: Is not this decay and death of competition, this attempt to suppress it under certain conditions, too wide and general a movement to be treated as merely a troublesome excrescence? Is it not likely that there are certain fixed laws regarding competition which determine its action and operation, and sometimes its death? If this be so, it is of the highest importance that we find and study these laws; and to that purpose we will devote the following chapter.
XI.
THE LAWS OF MODERN COMPETITION.
Thus far in our study, we have assumed that we knew what competition was. Now, however, as we are to study it scientifically, we are in need of an exact definition, that we may know just what the term includes. Prof. Sturtevant, in his "Economics," says: "Competition is that law of human nature by which every man who makes an exchange will seek to obtain as much as he can of the wealth of another for a given amount of his own wealth." Simmer this down to its essence, and we have simply: Competition is selfishness. To the other evident faults of the definition we need not allude. It is a much more satisfactory definition which Webster's Dictionary gives us, for it includes the idea that competition necessitates two or more parties to exercise it: "Competition is the act of seeking the same object that another is seeking." But this is too broad a definition for our purpose. It takes in competitions for fame, social standing, etc., with which we have nothing to do.
Failing to find a satisfactory definition, let us make one, as follows: Competition is that force of rivalry between buyers or between sellers which tends to make the former give a greater price for the commodity they wish to secure, and tends to make the latter offer better commodities for a less price.