3.—The True Function of Competition[*].
When we remember that the most conspicuous aspect of competition is to be seen in the struggle for work and existence continually going on among the wage-workers, the supply of laborers always apparently exceeding the demand and so keeping wages down to an average that scarcely covers subsistence; and when the competition is not confined to one industry, but spreads itself without respect for persons throughout every class of workers who sell their labor, and in every country in which modern capitalism has arisen; when the immediate effects of machinery and all improvements in the methods of production are observed to intensify the competition of laborers with one another, mechanical invention itself proving an irresistible competitor; when the struggle reduces the skilled and the educated to the common level and adds to the uncertainties and insecurity of the wage-earners’ lot, increasing the burden of life by the ever-present dread of failure and starvation,—is it any wonder that competition is looked upon as a monstrous evil, held up to the working classes by social reformers as the source of all their suffering and, together with the whole system of which it is a part, to be forthwith eliminated. Let us admit the fact: competition runs rampant among the toilers, and, despite the efforts of trade unions, determines the inadequate rates of wages they are compelled to accept. But before making up our minds what to do to avert these evils, we must form a clear conception of the nature of the supposed cause. What is competition, how does it arise, where is it limited, and in what manner is it confined? Is it possible to remove it if we learn its origin, or is it one of those natural forces which cannot be overcome and must therefore be reckoned with and made the best of? The effects that we observe in the presence of competition, however undesirable, do not warrant us in rushing at it bullheaded to send it to smithereens; because further evidence is required to show that no other cause contributes to the result and to prove that competition, exclusive of all other forces, is the source of the results we deprecate.
Competition, as it exists among the mass of workers, is, with good reason, denounced and condemned. When through capitalist enterprise in the expansion of business and creation of new industries workers are in demand and competition for labor runs up wages, is it still an object of suspicion from the laborer’s standpoint? If, by such a process, wages coincide with the value of the laborer’s product, is competition his deadly enemy? When, with the accumulation of capital, competition vastly increases not only the power but the scale of production, makes wealth more plentiful and drives the capitalists, merchants, and other traders to lower the price of all commodities, can it be denied that the result is beneficial to the wage-earners? We are told that competition among the capitalists leads also to low wages, to lying, adulteration, and all manner of deception; that it is responsible for the miserable wages of sales-girls and other women workers in our cities that throw them by the thousands on the streets to eke out a living. Also it is said that competition is the parent of monopoly, that it drives the capitalists to combine, and gives us the trusts by means of which they rob the people with impunity.
But this kind of reasoning is superficial. The law of equal freedom gives every man the right to carry on his activities in any way he may choose so long as nobody else is forcibly prevented from doing likewise. His liberty to produce, to sell, and to make contracts with whomsoever among free men chooses to agree with him cannot lightly be set aside; it is the very essence of freedom’s law, which we must either reject altogether or else admit that those things are to be allowed. The right to property entails the power to dispose of it. Hence, the fundamental principle in competition we have already seen the justice of and established. Competition cannot exist without freedom; where it is assailed today, a close analysis reveals, not the evil effect of competition, but the need of more liberty.
Any theory of society that implies the downfall of competition is in the same position as moral notions that proclaim the negation of self and seek through universal unselfishness, which, they say, should be the guiding principle of each individual’s conduct, to attain social perfection. The fatality of this is exemplified in the history of Christianity, which, after nineteen hundred years of experiment in reconciling the theory with individual practice, leaves the mainspring of character and conduct precisely the same as before,—that is, selfish. Egoism is demonstrably a natural, necessary, and wholly ineradicable force, which may be directed but never destroyed. Competition is simply the same force in the economic field. It is the necessary outcome of the relations of men with one another; the more pronounced it is, the freer they become. To eliminate it is neither possible nor desirable, but to direct it is within the sphere of intelligence. Like every other force that arises naturally and results from known conditions, it serves a purpose so essential and beneficial that no artificially arranged substitute can replace it or perform its work.
What essential function, then, in the social economy does competition serve? Remember, it is but a means to an end, and as such alone must be judged. That end is for each individual to find his most fitting place in society. We shall presently see that all the conditions essential to complete competition are not now fulfilled, and therefore the ideal results of its realization can neither be expected nor obtained. The individuals composing society do not yet find the sphere to which they are best adapted, or, to use an old metaphor, round men get thrust into square holes and square men wriggle in holes that are round. The right man in the right place is a worthy ideal and the more general the action of competition the more is this ideal fulfilled. Indeed the degree in which this function is attained is the measure of the value of competition and its only justification.
If we attempt to imagine a society without competition and the attendant phenomena of supply, demand, money, and price, we must either blot out from our minds the great complex communities of modern civilization with their unconscious independence, or else invent some hitherto unknown mechanism which will inadequately replace and fulfil the functions performed by them in the world today. Every Utopian and Communistic scheme formulated that attempts to do without the economic competitive forces replaces them by a reactionary and insufferable hierarchy, or else, like the Communist Anarchists, ignores the necessity for any machinery to adjust economic activities to their ends, leaving the choice between a newly evolved competitive arrangement and some form of authoritarian regulation, the force of power or of numbers, autocracy or mobocracy. Any theory of society that denies competition as one of its corner-stones is bound to replace it by an artificial coercive power (it cannot be replaced by any natural un-coercive force), as do the State Socialists, or else involve itself in the same contradiction and absurdity that cripples the school of Communists just mentioned, who, while denying that competition is indispensable, believe in individual freedom, the natural outcome of which, as we have seen, is competition. For, if they proclaim liberty and ignore the need for an economic mechanism, which competition, etc., now supplies, they exalt a chaotic and unbalanced condition to the dignity of an ideal; otherwise, they must face the issue and admit the need of economic order which arises from the action of competitive forces in a state of individual freedom. In face of this economic necessity the Communists are logically compelled to either stand with the authoritarians, accept a chaotic ideal, or admit a competitive basis as the only machinery for securing economic order in a free society.
I have already indicated the need of ascertaining whether the evil effects of competition arise under all the circumstances and different phases in which its working is observed, before we can proclaim it to be the real and only cause of such evils, or attempt to cure them by its overthrow. But a little thought and unbiased inquiry at once show us that only under certain conditions is competition opposed to the welfare of the laborer, and that in its widest operation it is wholly beneficent in its effects. Every modern improvement that makes life easier and raises the condition of the masses, all the methods that facilitate wealth production and distribution, the countless advantages of this over all preceding generations of men, can be traced to the breakdown of status and privilege and consequent growth, intensity, and general comprehensiveness of competition. It is the only known antidote to social stagnation, the mainspring of industrial progress, the whip that drives slothful humanity towards general well-being and happiness. What seem its shortcomings are really traceable to its restriction through various causes. The supply of labor in channels where it appears to always exceed demand will be found to be due to removable causes maintained by special interests upheld by law and authority, and only possible because of the ignorance of the victims. The demand for labor in like manner is limited, the natural channels for adjusting the activities of the producers to their needs are by custom and law choked up, the means made subservient to class interests, and thus competition is one-sided, its benefits diminished and the main purpose ignored. Institutions that maintain land monopoly, creating artificial values which without legal instrument could not exist, erect the mechanism of exchange, which becomes more and more important with the development of industry and trade, into a close monopoly, permit wealth to flow toward the idlers, and fail to apportion rewards to the value of services performed,—such institutions are the disturbing elements in the way of a rational society and must be laid bare, their precise nature and action understood, and their uselessness and vicious influence established, before intelligent reform is possible.