Competitiveness

The production of goods and services at a price which is at least as low as that of other producers of similar things of similar quality. Competitiveness is a defining property of the market economy; it needs no justification—and just in case it did, it would be necessary only to point to the fact that producers who are not competitive have to raise their game or cease to exist.

And yet, economic competitiveness is not the fixed landmark it is thought to be. It is a special case. It exists only under the circumstances of a taut market—that is, an efficient market, committed to employing the available resources to maximum effect and at minimum cost, so that those who fail to achieve this standard sink out of sight. The laws of competition apply to the pricing of goods and services supplied in a market economy, but they are not universal: they are not intrinsic to the logic of economics. This can be shown in two ways.

First, these laws apply only to production, and not to consumption. While producers are under pressure to be efficient (to maximise output from a given input), consumers are under corresponding pressure to be inefficient (to maximise input [consumption] for a given output [well-being]), so as to soak up the ever-growing production which the economy needs as a condition of its stability. This is the divided self of the market state.

Secondly, the rules of the competitive market comprise the special case that arises when a political economy leaves behind the texture of reciprocity, culture and social capital in which it was once embedded. They replace that network of values with a single requirement: be efficient. You want to work a mere three-day week for a full living wage? Forget it. Competitors will soon put you out of business. You want to build with local stone, carving and shaping the masonry in the tradition of the last thousand years? There may be a niche for you, if you can find an exceptionally wealthy client. You want to sustain a rich fertile soil and plenty of space for wildlife, because that is the way we ought to treat the land? . . . weed your carrot crop by hand? Environmental manners like that are a luxury item.

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The market’s answers sound authoritative and final, but what is really significant about them is how naïve they are. Most of human history has been bred, fed and watered by another sort of economy, where production for local use is supplied on the basis of reciprocal obligation and there is freedom from the tyranny of price; indeed, monetary payments may have no part to play at all. Dwellers in a land in which there is deep integration and common purpose between the individual and community, and a culture to hold it together, do not live in a taut economy governed by competitive pricing, but in a society that lives by craftsmanship. There is discretion: competition does not have the last word; the economy is slack.^C237

A slack economy is a difficult form of social order to sustain. But it may not be impossible.

Related entries:

Leisure, Big Stick, Intentional Waste, Social Mobility, Lean Thinking.