[PEN-L:6705] Re: Competitiveness

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Tavis Barr wrote:
>
> On Mon, 14 Oct 1996, Michael Perelman wrote:
>
> > I do not have a precise definition of competitiveness.  I do have an
> > understanding about what it means.  Most industries have low marginal
> > and high fixed costs.  Under competitive conditions, they would lose
> > money.  Profits, in effect, are a sign of weak competition.
> >
> > Is that the sort of answer that you wanted?
>
> I guess so.  It just begs a lot of questions.  Essentially it defines
> low-profit periods as high-competition periods and vice versa.  Okay,
> but what has created this competition?  Is it because capitals are
> finding that new markets don't exist so they go after existing ones?  I believe that competition [low profit periods] will "naturally" [within the unnatural context of capitalism] will naturally happen unless collusion or the state prevent it from happening, although serendipitious events [a new gold discovery, new technology, etc.] can temporarily stave off the inevitable.

I regard Keynesian type demand management as a method of limiting
competition.  I can amplify on that notion if you want.

Is
> it, conversely, because firms are expanding their horizons to different
> countries?  Is it because accumulation, and the need to invest
> accumulated assets, has made new firms willing to enter at a lower profit
> rate?  And, given any of these explanations, what is one to make of the
> current profit boom?  And is any of these hypotheses in contradiction to
> a pattern of increasing concentration?  Enquiring minds wanna know.
>
> May the last bureaucrat be hung by the entrails of the last capitalist,
> Tavis

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 916-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx