Do competition and capitalism contradict each other?
They may be enemies after all...
Competition. Considered to be a "good" by-product of capitalism, has it been overlooked? Capitalism is the system whereby goods and services are owned and controlled by private individuals and not the state. It allows the prosperous trade of needs and wants, whilst allowing companies to go from zero to one or from small to monopoly.
The essence of capitalism gives power to individuals but when you analyse the effects of capitalism, does it all sound that good?
A harsh environment
The idea of having a free market means that a variety of companies can exist and they can compete against each other. Although various firms and corporations may have very different target markets, in the end, they are all competing for the same group of the market. Consumers. It is a guarantee that if you have set up a company yourself, you are competing against multiple companies all trying to capture the largest segment of the market.
With few exceptions, competition is a highly evident yet costly endeavour. Everyone seems to be copying each other, every move, every new release and in reality, they forget why they ever started. Competition is dangerous due to the fundamental truth that it deludes you in thinking you actually have to compete.
Companies get worried when they have competitors. Look at the food shelves of supermarkets. You may have over 50 different corporations selling baked beans, several more well-known than others. And what happens to the names which we haven't even heard of? They are pushed to the back, swallowed by the cold darkness and never heard of again.
Okay, perhaps that is an analogy with an exaggerated hyperbole but it still conveys the same strong message. Competition kills, even if you're a huge company for example the tech giants, Google, Apple, Microsoft. The feuding families of several companies have led to money being "wasted" into competing against each other and in terms of the bigger picture, it's just not healthy.
Why Competition is bad?
It is of human nature that competition exists. Survival of the fittest. Evolution. Of course, if you do believe in these two theories. But even from an early age, we are told that we are competing against each other. We compete for the same schools, university placements, job applications. The idea of competition has greatly eaten into our brain.
If you are competing against others, it creates illusions that you are always fighting against each other but in reality, this is not the case. Problems and barriers appear when they aren't even genuine. In order to escape competition, there are two main ways to go about this. The first is to think before you create a company or firm or something you think will be of value. Ask the questions.
Am I doing something others aren't doing? Am I rendering useful needed service? Am I even being honest? Often we skip these questions and it is the consequences which bite at us. You MUST answer these questions to prepare you for the future. The other way to beat competition is to solely think about yourself and your company.
You should not care about what the others do as you will always be chasing the others and not going after the reason why you first started. Many sustainable and successful companies never care about their competitors...the likes of Amazon and Alibaba always put their consumers first. This is what you should always try and emulate.
So what does capitalism have to do with this?
The free market allows companies to compete against each other whether they want to or not and whether they like it or not. A strong and inevitable outcome is the number of losers which fail to continue to the next level and in the end, never make it. And that's where the contradiction lies within.
If capitalism is supposed to promote free market forces, than why does its by-product, competition, prevent these forces to occur. It is certainly an interesting scenario and one which ultimately complements one another. However, many economists still believe that "capitalism is the least worst way to run an economy".