Nature of Competition: How to Join Forces

 

We work together with others (JF for joining forces) for the purpose of saving the costs of obtaining utilities.

 

Family. Then and now, hunting and gathering is more economical in family than by oneself. We through JF can divide labor across jobs, rely on comparative advantage, extract economies of size,  and so on so forth. Needless to say, the sense of belonging to a family is extremely valuable or invaluable in itself. Economically, mentally and biologically, one plus one is greater than two, or 1+ 1> 2. Right, that’s none other than “synergy,” the buzz word of modern times.

 

Company to a company. After family come friends. The aggregate utility of having friends is similar to having a family, with some differences in kind and degree nevertheless. In the past, friends used to make a company. Now, even third parties make a partnership, a company limited, a joint venture and a public corporation. In economics, a partnership to a corporation is called “the firm,” which specializes in production to supply of a certain product.   

 

The community. Witting or unwitting of the Smithean and Ricardian principles, we specialize in creation of utilities on the bases of division of labor, comparative advantage, knowledge synergy, the experience curve effect, the economies of scale and scope, the network effect and the like.  

             On the flipside of specialization is trade. Private trade either above- or under-ground aside, trade is always and everywhere in the market, wide open to anyone with a wherewithal of the community. By construct, the market is communal and public. Therein, the household is renamed as the buyer on the demand side, while the firm the seller on the supplier side.

             Supposedly, the invisible gate keeper is insuperable as well. She checks and rules out cheating, fraud, extortion, bribery, corruption, coercion and all the other vices. Only free wills, virtuous intentions, goods, beneficial services and the legal purchasing force are let in.

             Sometimes we in consumption, too, keep company with families and friends but for being private. Shh, that’s the privacy.

 

The commonwealth. Suppose a ball game. Before all else, we need the rules specific of the particular game so as to be beneficial to the best extent not only to the players and the spectators but also innocent bystanders. The rules might well be purposive in general while not overly binding in details; for instance showing the ways to the benign end without telling which to take when.

             Second, the playground shall be level and friendly to players. Third, the umpire shall be neutral, unbiased, equal, inclusive, but without pride and prejudice. Fourth, there is the ball with which to account for the overall performance per duration of game. Fifth, the atmosphere of the game shall be agreeable to all the parties concerned. Sixth, everything else is up to free wills of all players.

             All things considered, that’s a matter of governance, “public or private.” The first of all the premises is the soft infrastructure. The second is comparable to the hard infrastructure and the third to the rule enforcer. The fourth is the legal tender with which to account for activities, in each market per period and all the economy per annum. The fifth is the policy, monetary or fiscal.

             The sixth is what we providentially have. “Don’t worry, be happy.”

Modern Times (1936) of the General Theory