Why Capitalism Is Open to Compeition

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Competition

How does competition relate to communism, socialism, capitalism and monarchy?

As for capitalism, it thrives on competition, and is "legitimized by competition" (Kasper). In fact competition is a way of redistributing a society's wealth and helps to prevent concentrations of power in the hands of one company. Competition is absent in communism (the communist committees govern prices and have controls on all regulations) and also in most socialist countries; in fact "Property is theft," Kasper writes on page 4. In monarchies the government imposes "coercive regulations" to protect state interests. Fascist governments are all-controlling and competition is a foreign word in this style of government. People are not free to form new businesses in fascism, communism and in monarchies.

To what extent does capitalism include "crony capitalism" and why?

Cronies sometimes form "competitive truces" (Kasper) to cut deals on prices and that is actually a violation of anti-trust laws. The world's airlines have in the past formed what Kasper called "The International Air Transport Association," which agreed to cooperate with each other by fixing airfares, schedules, and this group of airline owners " ... even such petty details as meal services" (Kasper). When crony capitalists get together to stifle competition, Kasper explains on page 3, they "hide behind" a number of excuses for their illegal behaviors: a) "safeguarding jobs"; b) "ensuring public health and safety"; and c) "protecting national from foreign competition.

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" Crony capitalism (until a fair government shuts it down through anti-trust regulations) gives an unfair advantage to the companies in collusion, and that's why they do it.

What roles are played by competition?

Competition does many things that are positive in an economy. It "obliges" people be alert and -- for example -- to do the research when buying a house. Buyers in industry have a chance to view the whole available field when it comes to purchasing raw goods that will be used in manufacturing. Competition works very well when private property rights " ... are protected and people are free to make contracts under the rule of law" (Kasper, p. 3). When there is honest competition, prices that are competitive "work like radio signals," Kasper writes on page 1. That is, everyone knows what the different competitive prices are, and a person in the market doesn't need to know where the prices came from only that they are out there.

What roles are played by….....

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