Competition

Relation of interaction of commodity operators to compete with other commodity operators for market position in order to obtain favorable production and sales conditions and maximize their own economic benefits.

Competition is the inevitable result of the development of commodity economy and the objective requirement of the law of value. In the market economy, various stakeholders strive to seize more shares within limited resources and achieve maximum benefits, which will inevitably lead to competition among all parties. On the one hand, people’s desire to pursue interests is unlimited, on the other hand, the resources available to society are relatively limited, this contradiction between the unlimited nature of the pursuit of interests and the limited nature of the available resources can only be resolved ultimately through the market competition of the survival of the fittest. The conditions of commodity producers in a commodity economy vary, and the productivity of labor in producing the same or similar commodities do not coincide. Producers with high productivity of labor, whose individual value is lower than the social value, are at an advantage in competition; conversely, those whose individual value is higher than the social value are at a disadvantage in competition, which may ultimately lead to losses or even bankruptcy. This competitive mechanism of survival of the fittest is conducive to promoting the continuous updating of production technology, increasing the productivity of labor, lowering costs and improving product quality, which is ultimately conducive to the further development of the social economy, but it also leads to the polarization of commodity producers and an increase in social conflicts.

Marx pointed out that competition in a commodity economy includes three aspects: competition between commodity producers (sellers) and buyers, competition within commodity producers and sellers, and competition among commodity buyers. When the supply of commodities exceeds demand, competition within sellers of commodities intensifies and competition within buyers weakens, while competition within sellers of commodities ceases and competition among buyers intensifies when supply exceeds demand. In addition, there is also competition within a branch and among the branches. The competition within a branch forms the social value of the commodity; while the competition among the branches forms the average profit and the price of production. Capitalists do everything they can to make high profits, using all economic, political and even forceful means to compete for raw materials, sales markets and investment sites for their products. Marx pointed out that competition is an external coercive law that greatly contributes to the economic development of capitalist society, but also emphasized the negative effects of competition in capitalist society. In capitalist economy, maximizing profit is the sole purpose of commodity production, so competition appears to be exceptionally cruel. Competition deepens the inherent contradictions of capitalism, intensifies the anarchy of production, and contributes to economic crises.

Under the conditions of socialist commodity economy, competition also exists, and fair competition is conducive to the development of the productive forces of society. There is also some unfair competition, illegal phenomena and other negative effects. It is necessary for the government to take corresponding economic, legal and administrative measures for macroeconomic regulation, and to standardize competition and regulate it under the rule of law.