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No Competition

April 16, 2017

All I needed was a sponge, just a plain sponge, for mopping up in the kitchen.  I looked in three local stores.  They had plenty, but all of them had a scouring pad attached.  I wanted a plain one, without the scouring pad.  They didn’t have any.  I didn’t even see a place in the display where they used to have them.  Most of what they did have had the same brand name.  The others were house-branded copies.  Am I the only one looking for a plain sponge?  What do other people use these days?  I finally found a plain sponge on a shopping web site.  As I expected, it was inexpensive.  Is it the local stores that don’t stock plain sponges anymore?

Maybe it’s the result of market domination by one company?  Maybe there are a few large companies in the sponge market.  Companies seem to buy up other companies these days as a way to control the market.

Maybe it’s the result of false competition?  Companies own many brand names these days and advertize them heavily.  This practice creates the illusion of competition where there is none.  All of the brands are owned by the same company.  Maybe there are several companies in a market, but they match their products, and sell them at the same price?

What is it about competition that makes it so important?  Companies generally don’t want competition.  It restrains their profit by keeping prices down.  It prevents their participation in international markets, where they might have to meet foreign companies head on.  Consumers do want competition.  It keeps prices down.  It stimulates innovation.  It ensures product variety.  Consumers should be in the majority, outnumbering business owners and investors by a wide margin.  They should be able to carry any vote.  As well, government agencies ensure competition by regulating corporations.  Such regulation is called unnecessary by some people and some political parties.  Is it really unnecessary?

The American dream promotes the idea of becoming successful through your own efforts.  Lately, though, the meaning of success has been redefined.  Now it means making lots of money by eliminating competition.  Likewise, deregulation has become a way to remove government constraints on business.  Competition agencies are under threat.

We need these government agencies.  They are necessary to protect consumers.  They represent consumers and advocate for them.  Without these agencies, consumers will be at the mercy of companies.  Of course, companies are not vindictive.  They are not benevolent either.  They are simply in business to make money.  Evading competition is one way to accomplish this.

 

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