The essence and forms of manifestation of the socio-economic law of competition

What drives the development of large-scale industry of the capitalist economy? What makes it necessary to constantly revolutionize the division of labor and thereby radically change its content? What, finally, serves as a catalyst for the interaction of the laws of division and change of labor? What is the source of the constant emergence and resolution of contradictions between them in the course of the development of scientific and technological progress?

Such a catalyst and a life-giving source of the emergence and resolution of contradictions is the competition between buyers and sellers, dictated by the ratio of demand to supply and demand. Sellers are fighting among themselves for the market. Each of them wants to sell, sell as much as possible, sell one, eliminating the rest of the sellers. Therefore, there is competition between sellers, which lowers the price of the goods they offer.

But there is also competition between buyers, which, in turn, increases the prices of the goods offered. Finally, there is competition between buyers and sellers; some want to buy as cheaply as possible, others may want to sell at a higher price. The result of the competition between buyers and sellers depends on what the ratio of competing parties is, that is, whether it is stronger in the camp of buyers or in the camp of sellers. Industry brings two armies to the battlefield against each other; in the ranks of each of them, in turn, there is an internecine struggle. Victory over the enemy is won by the army in the ranks of which there is less fighting. Suppose there are 100 bales of cotton on the market, while buyers need 1,000 such bales. In this case, demand is ten times higher than supply. Competition between buyers will be very strong: each of them will try to snatch at least one quipu, and if possible, grab everything. In the history of trade, there were such periods of cotton shortages, when several capitalists, having concluded an alliance among themselves, tried to buy not a hundred bales, but the entire stock of cotton available on the globe. So, in the case we have given, each buyer will try to eliminate the other, offering a relatively higher price for a bale of cotton. Seeing the fierce internecine struggle in the ranks of the enemy army and being confident in the sale of their 100 bales, cotton sellers will be wary of entering into a fight among themselves at the moment when their opponents compete in inflating prices. As one person, they confront buyers, and their claims would have no limit if the offers of even the most persistent buyers did not have certain boundaries.

So, if the supply of a product is less than the demand for this product, then competition in the ranks of its sellers is weak or does not take place at all. To the very extent that competition between sellers weakens, competition between buyers increases. The result is a more or less significant increase in the prices of goods.

As you know, more often there is a reverse case with the opposite result: a significant excess of supply over demand, fierce competition between sellers, a lack of buyers, the sale of goods for a pittance.

So, a change in the ratio between supply and demand causes an increase or a fall in prices. What will be the consequences of an increase in the price of goods? A mass of capital will rush into a thriving industry, and this influx of capital into a more profitable branch of industry will continue until the profits in this industry fall to the usual level or, rather, until, due to overproduction, the price of its products falls below the costs of production.

And vice versa. If the price of a commodity falls below the costs of its production, then capital will flow out of the production of this product (except in the case when this branch of industry no longer meets the requirements of the time and therefore must disappear).

We see that capital is continuously pouring and flowing from one branch of production to another. A high price causes a strong tide, and a low price causes a strong outflow of capital. Fluctuations in supply and demand each time bring the price of goods to the level of production costs. And the cumulative movement of this disorder is its order. In the course of this industrial anarchy in this cycle, competition compensates for one extreme with the other. Of course, compensation of this kind occurs within entire industries and therefore affects large social groups of industrialists.

If the productive capital of bourgeois society grows, there is a multilateral accumulation of labor. The number of capitalists and the size of their capital are increasing. The multiplication of capital increases competition among capitalists. The increase in the size of capital makes it possible to bring to the field of industrial battle powerful armies of workers, armed with more grandiose instruments of struggle.

One capitalist can drive another off the battlefield and take possession of his capital only if he sells cheaper. In order to be able to sell cheaper without going broke, he must produce cheaper, i.e. increase the productive power of labor as much as possible. The latter is increased primarily through a greater division of labor, through the comprehensive application and constant improvement of machines. The larger the army of workers within which labor is divided, the grander the scale in which machines are used, the relatively faster the costs of production are reduced, the more productive labor becomes. Therefore, a rivalry arises between capitalists – they seek to increase the division of labor and the number of machines and use them on the largest possible scale.

But what will the capitalist do if, through greater division of labor and the use of new machines, he is able to produce more products with the same amount of labor than his competitors? The more powerful and more expensive means of production that he brought to life give him the opportunity to sell goods cheaper, but at the same time they force him to sell more goods, conquering a larger market for them. By knocking down prices, it displaces its competitors from the market or, at least, wins back part of their sales from them. However, the privilege of our capitalist is short-lived: other rival capitalists introduce the same machines, the same division of labor, and these innovations spread until the prices of the goods produced fall not only below the old ones, but also below the new costs of production.

Thus, the capitalists find themselves in the same position in relation to each other as they were before the introduction of the new means of production, and if, thanks to these means of production, they could deliver twice the quantity of products at the previous price, now they are forced to sell twice the quantity of the product for a price lower than the previous one. At the level of these new production costs, the same game starts over. A greater division of labor is being reintroduced, the number of machines is increasing again, and the scale of use of this division of labor and these machines is increasing. And competition again generates opposition to this result. We see how the mode of production is continuously transformed, revolutionized, how the division of labor inevitably entails an even greater division of labor, the use of machines – an even wider application of machines, production on a large scale – production on an even larger scale.

So, competition acts as an objective law that influences through the relations of property subjects on the interaction of the laws of division and change of labor. “This is a law that again and again knocks bourgeois production out of its former rut and forces capital to strain the productive forces of labor, because it strained them before, a law that does not give capital a moment of rest and constantly whispers to it: Forward! Forward! This is precisely the very law of competition, which, within the framework of periodic fluctuations in trade, inevitably equalizes the price of goods according to its production costs” (Marx K., Engels F. Soc. 2nd ed. Vol. 6. p. 454).

Whatever powerful means of production the capitalist uses, competition leads them to universal application, and from the moment their application becomes universal, the only consequence of the greater productivity of his capital is that for the same price he must now deliver 10, 20, 100 times more products than before. But since by increasing the quantity of the product sold, he has to compensate for the decline in the selling price and reimburse the costs of production (since this mass sale has now become a matter of life not only for him, but also for his rivals), the old struggle flares up with the greater ferocity the more productive the already invented means of production. The division of labor and the application of machines will again develop on an incomparably larger scale.

Whatever the power of the means of production used, competition seeks to rob capital of the golden fruits of that power, reducing the price of a commodity to the level of the cost of production. While competition constantly pursues the capitalist with its law of the costs of production and any weapon forged by him against his rivals directs against himself, the capitalist constantly tries to outsmart competition, tirelessly introducing instead of the old machines and the old division of labor new, more expensive, but cheaper machines and a new division of labor, and does not wait for the dock as a result of competition to become obsolete.

The arena of the law of competition is all social production, the source of self-development is the constant emergence and resolution of the contradiction between the need for maximum self-realization of a person in the name of survival and the resistance of the social environment to this natural manifestation. In the course of the unfolding of scientific and technological progress, the contradiction is resolved in order to arise again and be resolved at a new stage of social development.

Types of competition are becoming more complicated, becoming more diverse and variable, taking on an increasingly indirect character. Along with the competition of small and medium-sized producers, competition is conducted between monopolies in one branch of the economy, between monopolies of related industries, within monopolies, between monopolized and non-monopolized enterprises, etc. Competition at the present stage is included in all spheres of economic relations. At the same time, despite the diversity and complexity of the types of competition, its results are strictly determined by the ratio of opportunities and abilities of certain subjects of competition.

The main forms of manifestation of the law of competition reflect various types of interaction of the laws of division and change of labor through the relations of property subjects. They are expressed in four classical models: perfect (pure) competition, monopolistic competition, oligopolistic competition, and pure monopoly. Perfect competition gives rise to the most organic interaction of the laws of division and change of labor, not restrained by external constraints: there is no control over the price, demand is very elastic, non-price methods are not practiced, obstacles to business organization are eliminated. Competition associated with a marked restriction on free enterprise is called imperfect; in this model, there are strict barriers to the penetration of new entrepreneurs into the markets, there are no close substitutes for products manufactured by privileged manufacturers.

Monopolistic competition combines the features of perfect and imperfect models, is a common type and is characterized by: a narrow range of price controls, elastic demand, the use of non-price methods of competition, insignificant entry barriers to the industry. Goods and services produced under this model often belong to the same industry and represent the same market, but are not absolute substitutes.

Oligopolistic competition presupposes: the existence of several large firms in the market, whose products can be both heterogeneous and homogeneous; entry of new firms into the industry is difficult; highly developed non-price competition; there is an interdependence of firms in making decisions about the range of prices.

The opposite of competition is monopoly. In this model, one company is the only seller of these products that do not have close substitutes; price controls are significant; the demand is inelastic; entry into the industry for other firms is blocked. Due to the absence of the catalyzing influence of competition through the relations of property subjects, the natural relationships between the laws of division and change of labor are blocked.

The model of perfect (pure) competition, being a simplified image of economic reality, allows us to identify the most important patterns of functioning of the market mechanism in its purest form. It was the model of perfect competition that was the epistemological basis for the construction and formulation of the socio-economic law of competition.

The forms of manifestation of the objective law of competition and the results of competition depend on the competitiveness of certain subjects of economic activity. Those who are more competitive are the winners in the competition. Competitiveness is manifested, thus, in the interaction of competing parties, the result of which is the victory of one and the defeat of another competitor in the labor market, goods and services, capital, securities, etc.

At the present stage of transformation of economic relations in the post-Soviet state, the processes of competitive interaction of individuals of social groups in the labor market are of particular interest. The competitiveness of a labor force subject in the labor market determines its ability to withstand competition from real or potential applicants for his workplace or to claim another, more prestigious one; of course, the ability to show the necessary level of competitiveness for different people in different situations is not the same. Competitiveness may vary depending on the situation on the labor market (favorable or unfavorable for the employee); dominance of certain structural components (gender, age, education, qualifications, marital status, state of health, psychological characteristics, etc.); the employee’s well-being based on the correlation of his objective position in the labor market and subjective self-assessment.

The first group of factors of competitiveness includes the so-called situational cumulative factors, i.e. factors that tend to accumulate over time, situational competitiveness is determined by the economic situation, the formation of market relations and is associated with the real demand and supply of labor in the labor market. The long-term balance of labor resources by spheres of activity, sectors of the national economy and forms of employment makes it possible to analyze the economic situation on the labor market and, consequently, the situational competitiveness of socio-demographic and professional-qualification groups of the economically active population.

The crisis state of the Belarusian economy was manifested primarily in a long drop in production, since 1990, in terms of the main macroeconomic indicators. The decrease in the scale of production from 1990 to 1995 is due to a decrease in industrial output by 1.7 times, agricultural products – and 1.35 times, retail trade turnover – by 2.6 times, the number of people employed in the national economy – by 1.2 times (National Economy of the Republic of Belarus in 1995. Ministry of Statistics of the Republic of Belarus. Mn., 1996. p. 216).

The slow development of the economy hinders institutional and structural transformations in society, exacerbates the problem of feminization of poverty with the general impoverishment of the population of the Republic of Belarus – this is a decrease in the competitiveness of women with a general low demand for professional, skilled labor. Thus, an analysis of the state of employment of women in the republic showed that, in comparison with men, the share of women in the branches of material production is decreasing, and in non-productive industries it is increasing. Along with the steady trend of reducing women’s employment in material production, there is an equally stable trend of increasing women’s employment in the non-productive sphere (by 1.5 times). In health care and social security, education, housing and communal services, lending and insurance, management and public associations, women’s employment increased by 1.5 times, and in the field of science and scientific education it decreased by half.

Changes in the employment patterns of women and men partly reflect general changes in the economy, namely a decrease in the share of people employed in material production and an increase in non-productive industries. But that’s only partially. To a much greater extent, changes in the employment patterns of women and men reflect the development of the feminization of poverty, which is associated with a decrease in women’s competitiveness. A significant increase in the proportion of women in non-productive sectors, in particular education, is a fairly accurate indicator of the decline in their social prestige and, accordingly, the decline in wages. Thus, the situational competitiveness of women is determined by a decrease in their share in relatively highly paid branches of material production and an increase in non-productive industries that are low-paid and losing their social prestige.

The second group of factors consists of such characteristics as gender, age, education, qualifications, marital status, state of health, psychological characteristics of the employee’s personality. However, these factors affect competitiveness not directly, but indirectly – through labor mobility, defined as a change in the professional or career status occupied by an individual or socio-demographic group in the social organization of labor and, accordingly, the social structure of society.

Labor mobility as the ability of an employee to change in the system of social positions and as an objective possibility of these changes, generated by the number and permeability of stratification channels in the labor market, is determined by the rate of change in the qualitative characteristics of the employee, which set the pace of his labor mobility to the extent that it is possible with a given social structure of society.

Thus, a comparison of the educational level of men and women employed in the national economy of the republic shows that women with higher education are 1.4 times more numerous than men; with the average special – 1.9 times more; with average and incomplete average – 1.2 times less than men. However, having a significantly higher level of education than men, women realize it in the least paid professional groups, where their share is constantly increasing. This is a professional group of accountants, where the proportion of women exceeds the proportion of men by 60 times; medical personnel, where the proportion of women exceeds the proportion of men by 10 times; a group of teachers where the proportion of women is greater than that of men,
5 times; workers of culture and art, where there are more women than men, 3 times (Statistical Yearbook of the Republic of Belarus – 2000. Mn., 2000. p. 70).

It would seem that the level of education should serve as a guarantor of high competitiveness (as in all civilized states), but this does not happen. The decline in the prestige of industries where women can realize their high educational status entails a decrease in their competitiveness compared to men and the feminization of low-paid, professional groups in the labor market.

The criterion for the allocation of the third factors is the correlation of the objective (role in the social organization of labor) and subjective positions of the individual (social group) in assessing their competitiveness. In the first case, this is an indicator of the stability of the employee’s position in the field of employment, in the second – the key to the prospects for his successful economic activity. The subjective position of an employee can be defined as I-competitiveness in contrast to the actual competitiveness, which determines the position of the employee in the labor market. The correlation of these positions, their mutual influence and interaction reflects the real movement of the individual (group) in the direction of increasing or decreasing competitiveness.

Competitiveness itself is determined by the state of supply and demand of labor in the labor market. The higher the demand for certain jobs in the absence of adequate supply, the higher the level of competitiveness of these jobs and the higher the competitiveness of workers who have them. Thus, the feminization of poverty, with a significant decline in the standard of living of the entire population of the republic, caused a massive decrease in the objective position of women in the labor market. Their competition has shifted to those low-paid (although socially significant) areas of activity where they can realize their high educational potential. Their competitiveness has decreased and continues to decline in comparison with men against the background of a general decline in the standard of living of the population of the Republic of Belarus.

If the subject of labor is a branch of the national economy, they talk about the flexibility (flexibility) of its behavior as the ability to adapt to the constant changes in the market and technological environment of the global economy of the XX century. Capital-intensive industries solve personnel problems through internal mobility, and labor-intensive ones rely on external mobility, labor market opportunities. The competitiveness of industries is determined both by their susceptibility to technical and technological innovations and by successful personnel policy.