The individual man, in seeking his own profit, will necessarily seek to produce and sell that which has most value for the community, and so "he is in this, as in many other cases," as Adam Smith puts it, "led by an invisible hand to promote an end which was no part of his intention."
The conception has been stated with even greater unction by the French writer, Frédéric Bastiat.
Since goods which seem at first to be the exclusive property of individuals become by the estimable decrees of a wise providence [competition] the common possession of all; since the natural advantages of situation, the fertility, temperature, mineral richness of the soil and even industrial skill do not accrue to the producers, because of competition among themselves, but contribute so much the more to the profit of the consumer; it follows that there is no country that is not interested in the advancement of all the others.[180]
The freedom which commerce sought and gained upon the principle of laissez faire has enormously extended the area of competition and in doing so has created a world-economy where previously there were only local markets. It has created at the same time a division of labor that includes all the nations and races of men and incidentally has raised the despised middleman to a position of affluence and power undreamed of by superior classes of any earlier age. And now there is a new demand for the control of competition in the interest, not merely of those who have not shared in the general prosperity, but in the interest of competition itself.
"Unfair competition" is an expression that is heard at the present time with increasing frequency. This suggests that there are rules governing competition by which, in its own interest, it can and should be controlled. The same notion has found expression in the demand for "freedom of competition" from those who would safeguard competition by controlling it. Other voices have been raised in denunciation of competition because "competition creates monopoly." In other words, competition, if carried to its logical conclusion, ends in the annihilation of competition. In this destruction of competition by competition we seem to have a loss of freedom by freedom, or, to state it in more general terms, unlimited liberty, without social control, ends in the negation of freedom and the slavery of the individual. But the limitation of competition by competition, it needs to be said, means simply that the process of competition tends invariably to establish an equilibrium.
The more fundamental objection is that in giving freedom to economic competition society has sacrificed other fundamental interests that are not directly involved in the economic process. In any case economic freedom exists in an order that has been created and maintained by society. Economic competition, as we know it, presupposes the existence of the right of private property, which is a creation of the state. It is upon this premise that the more radical social doctrines, communism and socialism, seek to abolish competition altogether.
2. Competition a Process of Interaction
Of the four great types of interaction—competition, conflict, accommodation, and assimilation—competition is the elementary, universal and fundamental form. Social contact, as we have seen, initiates interaction. But competition, strictly speaking, is interaction without social contact. If this seems, in view of what has already been said, something of a paradox, it is because in human society competition is always complicated with other processes, that is to say, with conflict, assimilation, and accommodation.
It is only in the plant community that we can observe the process of competition in isolation, uncomplicated with other social processes. The members of a plant community live together in a relation of mutual interdependence which we call social probably because, while it is close and vital, it is not biological. It is not biological because the relation is a merely external one and the plants that compose it are not even of the same species. They do not interbreed. The members of a plant community adapt themselves to one another as all living things adapt themselves to their environment, but there is no conflict between them because they are not conscious. Competition takes the form of conflict or rivalry only when it becomes conscious, when competitors identify one another as rivals or as enemies.
This suggests what is meant by the statement that competition is interaction without social contact. It is only when minds meet, only when the meaning that is in one mind is communicated to another mind so that these minds mutually influence one another, that social contact, properly speaking, may be said to exist.