The Capitalism Site
Laissez-faire capitalism is the political economic system based on individual rights
Free-competition means freedom from the initiation of physical force. Free competition is the freedom to produce, and the freedom to trade what one has produced, for ones own self-interest, i.e., in the pursuit of ones own happiness.
Politically, free-competition is a consequence of the political right to life, liberty, property and the pursuit of happiness applied to the economic sphere of production and trade.
Morally, competition among producers is founded not on service to consumers — which is a result; but, upon the pursuit of rational self-interest, i.e. the profit motive. Economically, its result is a free-market, i.e. free trade.
Observe that free-market competition presupposes a social system based on individual rights — and cannot exist without the protection of rights by government, e.g. what good is the right to produce (right to liberty) if one does not have the right to keep what one has created (right to property), the right to advertise what one has produced (right to free speech), the right to trade ones goods one ones own terms (right to property) and the right to benefit from what one has produced (right to the pursuit of happiness)?
Free-competition without individual rights is a contradiction in terms, it is an oxymoron. Of course, if one is a communist, fascist or socialist (all are different forms of a single evil principle: collectivism) and does not believe in individual rights then competition has an entirely different meaning.
All social systems have competition, the only difference is that in capitalism, all such competition for economic power results in the creation of wealth, whereas in collectivist societies such competition for political power results in the destruction of wealth.
Under capitalism, competition is an economic process where men do not compete to put down others, but to raise their self up by creating values which are potentially unlimited, and raising their competitors up in the process.
Under all collectivist systems competition is a political process where men compete not to create values, but to lobby or kill for positions of political power which they can use to legally extort the wealth of their fellow men.
The key to the success of capitalist competition is that it limits competition to the economic sphere of production, and removes it completely from the political arena of compulsion. Where capitalist competition leads to a free market; political competition leads to a mixed economy of warring pressure groups and if continued for long — a dictatorship.
Contrary to those who prattle about “competition versus cooperation”, capitalism is the only system where voluntary cooperation can actually exist, as it banishes force from all relationships, making all exchanges voluntary. Contrast this with the “cooperation” of collectivist societies, where one man must “cooperate” with another, lest he desires to be fined, thrown in prison, or have a lead bullet pumped into his skull.
Capitalist competition is the one of the most economically practical forms of social cooperation, where every producer competes to see who can best cooperate with each other, and with the consumer. Such is the nature of capitalist competition.
Ones rights do not disappear when one becomes a successful businessmen. Ones rights are still inalienable. One does not gain rights by being successful, one does not lose them by becoming rich. Before the law all men are to be held equal in rights.
As competition is simply the application of the principle of individual rights to the economic sphere of production and trade, its is the principle of rights that determines if any action is anti-competitive or not. If no rights rights are being violated, then neither is the principle of competition. Free-competition only has a single requirement: the protection of individual rights.
No.’ One does not gain or lose rights by becoming the member of a group. One does not lose one’s rights when one becomes a producer; one does not gain rights by becoming a consumer. The only right the consumer has is the freedom to refuse or accept what producers offer them. The consumer has no right to force the producer to sell something, no more then the producer has the right to force the consumer to buy something. Only when the two mutually agree does an exchange take place. Neither party has to make a deal if they do not like their terms, they are free to go elsewhere.
As the consumer sets the terms on how his money is spent (i.e., on how his property is sold), as does the producer set terms on how his property is bought/sold. The producer’s job is not to serve the consumer’s interests, no more then it is the consumer’s job to serve the producer’s interests, both must serve their own interests. It is only when their interests coincide that a trade — a voluntary exchange of a value for value — takes place.
Competition does not mean “equal ability” (just like the right to life does not mean you will live as long or as prosperously as your neighbor). When any company uses its property in a way that does not benefit its competitors, it is not being anti-competitive. Competition does not mean that you do things to promote your competitors, but that you do things to improve your own position — if necessary at your rival’s market share; but never by violating your rival’s, or anyone else’s, rights. Equality under free- competition only means an “equal protection of rights”.
The power wielded by a businessmen is the power to create wealth through production, and trade. In regards to trade in a free market, a businessmen can only entice you to do his bidding, by offering you something that you judge to be of equal or greater value in return as judged of your own free-will. His power is the power of persuasion: the power to appeal to one’s mind. Such power is derived by creating value–such as when Bill Gates (Microsoft) creates better products at lower prices. The businessman’s spiritual tool is the mind–and its material counterpart–is the dollar.
Capitalism Magazine