[OPE] free competition

Now that I have a moment to comment, let me say this. What Jerry means by
"research" is looking up a word in the dictionary (apparently you can become
a professor that way in New York). OK, I look up a word too sometimes, when
I am translating or editing a text, but that obviously does not exhaust the
meaning of research by any stretch of the imagination, as far as I am
concerned.

Point is, Jerry is constantly vacillating, just toying with
super-abstractions. First he equates free competition with perfect
competition. Then he denies that free competition is the same as perfect
competition, but does not explain the difference. Then he says that free
competition is quite a bit like perfect competition, nearly the same as
perfect competition. But he has never exactly defined anything, so anything
can mean anything... and so he carries on, because he's always right at a
superabstract level, even if he happens to be wrong, and doesn't really have
a clue about what the topic is about.

Marx himself states his view unambiguously: "The analysis of what free
competition really is, is the only rational reply to the middle class
prophets who laud it to the skies or to the socialists who damn it to hell."
(Grundrisse, p. 652).

Nobody except the crudest Stalinists and Trotskyists have ever argued, that
there is a historical progression of eras which can be periodized as:

feudalism - free competition- monopoly capitalism,

so Jerry is tilting at a straw man, of his own invention.

Everybody understands, as Claus Germer also acknowledges, that partial
monopolies and imperfect competition always co-existed in various
admixtures. Indeed the very concept of an "oligopoly" means that a few
monopolists, controlling most of the market, compete with each other, and
prevent others from entry into that market, since the capital requirements
are ordinarily too large; that is, even in oligopolistic conditions,
monopoly and competition always coexist, as I mentioned before.

It is just that, from at least around 1500 to say 1800 or so, the amount of
central control the state could exercise over the nature and actual conduct
of business operations was still rather limited. The state could block
businesses from operating, it could levy taxes, and it could punish criminal
activity, but it had little grip on the process of business competition as a
whole, that's the point. As we can trace out in the history of economic
texts, there wasn't even much understanding about how business competition
worked.

Even if laws were passed favouring some competitors at the expense of
others, the ability to enforce those laws was often limited. The legal
apparatus of state regulation developed essentially in response to the
development of actual capitalist competition and crises, and trailed behind
them.

It is not that free competition did not exist, merely that free competition
did not exist "everywhere at the same time" or permanently. But this is an
abstraction apparently far too difficult for Jerry to grasp.

Nobody - including Marx - denies that there is a lot of ideological hoo-hah
about "free competition". But for Marx this sort of insight was just
superficial; anyone can observe that, the point is to understand what is
behind the ideological hoo-hah, what are the economic relationships which
structure the ideological myths.

Since Professor Jerry is too lazy to look at Marx's texts (the Napoleonic
"Marxisme, c'est moi" approach... some research slave can sort out the
details), let me just kindly note that the most comprehensive discussion by
Marx on the concept of free competition occurs in the 1857 Grundrisse
manuscript (p. 649-652).

This circumstance is not accidental, since in Marx's plan of work, a
detailed discussion of competition presupposed the understanding achieved by
an analysis of the intrinsic nature of capital; yet Marx barely got to the
phase of discussing all the dimensions of competition in detail, in a
published work (In one of the earliest plans for Das Kapital including in
Notebook 2 of November 1957 - Grundrisse
http://www.marxists.org/archive/marx/works/1857/grundrisse/ch05.htm - the
projected discussion of competition is included under the heading of
circulation, and comes after the analysis of price theory). It is best, if
you read that whole Grundrisse passage, and not, like Professor Jerry, tear
bits of text out of context.

In Capital Vol. 1, Marx made the order of discussion very explicit:

"It is not our intention to consider, here, the way in which the laws,
immanent in capitalist production, manifest themselves in the movements of
individual masses of capital, where they assert themselves as coercive laws
of competition, and are brought home to the mind and consciousness of the
individual capitalist as the directing motives of his operations. But this
much is clear; a scientific analysis of competition is not possible, before
we have a conception of the inner nature of capital, just as the apparent
motions of the heavenly bodies are not intelligible to any but him, who is
acquainted with their real motions, motions which are not directly
perceptible by the senses."
http://www.marxists.org/archive/marx/works/1867-c1/ch12.htm

The centrepiece of Marx's analysis of competition in the sphere of
capitalist production is the following:

"The law of the determination of value by labour-time, a law which brings
under its sway the individual capitalist who applies the new method of
production, by compelling him to sell his goods under their social value,
this same law, acting as a coercive law of competition, forces his
competitors to adopt the new method."
http://www.marxists.org/archive/marx/works/1867-c1/ch12.htm

This central idea begins to be developed only in capital Vol. 3, where Marx
argues that:

"The fundamental law of capitalist competition, which political economy had
not hitherto grasped, the law which regulates the general rate of profit and
the so-called prices of production determined by it, rests, as we shall
later see, on this difference between the value and the cost-price of
commodities, and on the resulting possibility of selling a commodity at a
profit under its value."
http://www.marxists.org/archive/marx/works/1894-c3/ch01.htm

But why could the political economists not grasp the "fundamental law of
capitalist competition"? In the Grundrisse passage I mentioned above, Marx
explains why. Free competition was defined by liberals mainly negatively, as
a freedom from external constraints or feudal barriers to business
development (including, but obviously not exclusively, state interference).
As soon however as the political economists had to explain in detail what
the capitalist competition was positively about, they became totally
eclectic and fell from one contradiction into the other, just like Jerry
Levy. In other words, the political economists and the Levyite philosophers
could not get beyond a vulgar concept of free competition.

As a matter of fact, the offical theory of competition remains vulgar,
eclectic and selfcontradictory to this very day, wrapped in a haze of
ideological myth. As Michael Porter notes, when Ronald Reagan instituted a
Commission on Industrial Competitiveness in 1983
http://www.presidency.ucsb.edu/ws/index.php?pid=41529#axzz1JmTApjWK which
tabled its report in 1985, "there was no accepted definition of
competitiveness" (The competitive advantage of nations. NY:Free Press, 1990,
p. xii).

 Jurriaan

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Received on Sun Apr 17 08:16:21 2011