Competition and Cooperation

A libertarian viewpoint

competition and cooperation  It is impracticable ^*Utopianism to suppose that competition can be entirely replaced by cooperation. The main argument here has nothing to do with human incentives, as is often supposed, but with mass ^*economic calculation. This requires that producers use ^*money to compete for ^*scarce ^*resources in order to minimise ^*waste. At the same time, money is itself one of the main aids to cooperation that could not otherwise be negotiated.

All ^*societies, of practical necessity, involve both competition and cooperation; it is a question of what form each takes. As long as they are within a framework of ^*libertarian ^*property rights, they should be allowed and will generally promote ^*welfare. Businesses compete with each other, to varying degrees, to provide products for which there is a ^*demand. Although some will lose in any particular competition, everyone gains overall in terms of the abundance that a competitive ^*market produces. Such competition is sometimes criticised for being wasteful, but this charge is without force unless there is a realistic better alternative. All non-libertarian ^*state regulations and interferences concerning market competition appear to make it less ^*economically efficient.

On the other hand, people also argue that there is not enough competition. Adam Smith (1723-1790) even suggested more competition among ^*religions. ^*Governments sometimes try to increase competition by regulations on the size and activities of companies; but there is little evidence that the market can be improved on here. Firms tend to get larger and more unified or dominant to the extent that it is efficient for themselves and their customers. Unless there has been state-intervention—whether due to ^*ideology or ^*corruption—accusations of inefficiency and ^*monopoly are often the dubious complaints of less successful competitors (see ^*barriers to entry).

There is a sense in which all competitions that are within libertarian rules, including ^*sporting competitions, are also cooperative (or within a cooperative framework, at least). To the extent that there is illiberal competition there are no rules that both sides, even tacitly, agree to respect. But there can be libertarian conventions even within ^*warfare: such as the treatment of prisoners and which weapons are allowable. By contrast with libertarian rules, the state creates a prisoner’s dilemma of illiberal and destructive non-cooperative competition (see ^*game theory).

See ^*perfect competition.

(This is an entry from A LIBERTARIAN DICTIONARY: Explaining a Philosophical Theory [draft currently being revised]. Asterisks indicate other entries.)