Competition -- the good, bad, and the ugly

     Competition exists in all aspects of our lives. Sometimes it is not obvious -- which apple looks the best to eat? Do I like the green shirt or the red one? What is my favorite subject in school? Choices involve competition even if the things among which one must choose are not actively competing against each other. In these cases, the choice is usually made by our subconscious acting from our personal histories.
     Competition can be eliminated via monopolies -- either regulated or unregulated. An unregulated monopoly is the only source and it can disperse it's products in any way, and at any price, at any usable quality. A regulated monopoly provides the only source but there are outside agencies that determine the parameters of its ability to sell -- quality, price, availability.
      Even if there are two or more sources for a product, competition can be avoided if the sources make agreements between themselves about conditions of each of their production and distribution. Splitting the market, agreeing on certain lower limits on price, active sharing of research, and so forth can give an appearance of competition while the reality is just that the market is shared to enable all sources to maximize their profits.
     If a product is not wanted, there can be no competition. Of course, most new products start as an unwanted entity in a condition of unregulated monopoly. They now have to persuade people that they want or need the product. This establishes the market and the introducing source can take advantage of their situation to establish their association with the product. Once the market has been established, then competition will appear (unless squashed by the introducing, or largest, company -- suppressing competition legally or illegally).
     Each source for a competing product (and the product can be merchandise, services, political candidates, locations, or any other item from which one must make a choice) wants to persuade the buyer that they have the "best" product.  Advertising and marketing attempt to create a specific positive perception -- which may, or may not, be in agreement with measurable, and verifiable, qualities.
     The grand prize for an advertising/marketing division is to establish a brand such that people will choose according to the brand and only minimally (or not at all) evaluate the qualities of the products. On the scales of evaluation, a positive brand image is a heavy weight on the side of choosing that sources products. This can be reasonable, as brands are established by satisfying people with products on a consistent basis. However, if the brand becomes the only criterion, there is no longer any need of any positive qualities. Eventually, a product that has only brand recognition and is a poor product will lose its brand reputation and effectively have to start over within the market.
     During the phase of true competition (no brand loyalty, no monopolies, required by the consumers) between two or more sources, competition can achieve continuous improvement of the products. One source "wins" and the other examines the reasons and improves their product to the point where they start "winning" and then the OTHER source starts improving their product. Once again, this can apply to many different products -- social and business. So, during this phase, there may be a "lesser evil" or "less bad" but making a choice towards that direction still continuously improves the choices from all sources.

Regulations create level playing fields for businesses

   It seems to be fairly "normal" for businesses to complain about, and fight, every new regulation that is proposed or enacted. This isn't unreasonable as it will be true that a new regulation will require different procedures (and probably additional paperwork). However, that is not the same as saying that regulations are bad for businesses -- but it can be a difficult balancing act within the global economy.

   Regulations are a way to tell businesses what practices are acceptable to the society in which they function. They fall into three general categories (actually, almost anything can be broken up into however many categories as are desired -- I am choosing three). These categories are economics, labor, and environment. There is also a fourth category which involves product regulations -- for the product quality and safety of the consumer but that does not directly apply to this blog.

   Economic regulations involve the way the products of a company become part of the general economy. This will involve taxes. Generally, businesses want to pay fewer taxes and the general population wants them to pay more taxes. It will also involve tariffs -- both import and export. Tariffs are special taxes that are involved with the movement of products and money across country borders. This is a part of the balancing act.

   Let us say that Country A, as part of the standards for their society, requires all businesses to ensure that any water used by the business to be cleaned to drinking standards before being released back to the environment. This requirement (or regulation) adds 5% to the cost of doing business in Country A. Country B does NOT have such a requirement and, thus, businesses can produce the same product for 5% less. This puts businesses in Country A at a price disadvantage. A tariff on products imported from country B gives the businesses a more equal competitive situation. (Note that the tariff does not help the environment in country B.)

   Regulations may also be in the category of labor use. Minimum wage laws (or "living wage" laws whenever they start being enacted) say that people cannot officially be employed without a certain level of pay. Restrictions on number of hours worked per day, or week, directly affect the number of people employed. "Child Labor laws" restrict the age of workers and the number of hours per day that they can work at what ages. Mandatory sick days allowed (paid or unpaid) create a situation where workers are not compelled to work even when sick (this also benefits the general population when the food industry is involved). Vacation days, holidays, and other types of paid, or unpaid, absences help the overall health of the people who work for a business.

   Environmental regulations are basically a matter of how businesses are allowed to affect the environment. Usually a person thinks of manufacturing companies for this. However, the requirement that a business have, and maintain, a parking garage would also be an example of an environmental regulation as it reduces the amount of land that cannot be used for vegetation. Another non-manufacturing law might be a requirement to turn off 70% of the lighting during non-working hours.

   Of course, environmental regulations apply more directly to manufacturing businesses. It is similar to teaching a child to "clean up their own mess". A business would, naturally, prefer other people to take care of their messes. Note that not having environmental regulations does NOT decrease the cost to clean up -- it moves it from the business to the general public. In fact, it probably costs less for the mess to be cleaned up at the site of creation of the mess than after it has dispersed and damaged other parts of the environment.

   It would be completely possible for a business to do everything well on their own initiative. They can treat their people well, be good to the environment, and be a good neighbor within their communities. There are many small businesses that strive hard to do such and other, larger, businesses that recognize that there are inherent benefits (lower turnover of staff, better public image, etc.) to do such. However, businesses that do NOT behave well can have financial advantages over their competitors -- and this does not help society as a whole.

   Regulations provide a framework that is acceptable to the local society that allows businesses to compete without having uneven costs of providing services.