Competition Is The Cornerstone Of Capitalism - 1499 Words

Competition is the cornerstone of capitalism. It creates rivalry among businesses to produce quality goods and services at competitive prices. This gives consumers a better sense of variety when making purchases. Competition in its purest form creates small buyers and sellers none of which are too large to negatively affect the market as a whole. Competitive markets can be dated back to ancient times when merchants competed in foreign trade. In the 19th century economists considered competition as a natural phenomenon in which growth of an operation was fueled by supply and demand in a free market economy. They also believed that supply and demand worked better in a laissez faire type environment. This was possible through freedom to trade, transparent knowledge of market conditions, no government restrictions on trade, and access to buyers and sellers. These conditions prevented any buyer or seller to significantly affect the market price of a single commodity. After the mid 1800â⠂¬â„¢s, limitations to compete became evident during the industrial revolution. Corporations achieved manufacturing capabilities that would surpass their competitors and would allow them to fix prices and squeeze out their rivals. Eventually some businesses became so large that they controlled enough market share to deceptively manipulate prices in their industry. This activity created an atmosphere for President Theodore Roosevelt to launch his famous trust busting campaigns. The era of antitrustShow MoreRelatedCommunism, Capitalism, and Socialism Essay652 Words   |  3 PagesThree different types of economic systems used by governments are Communism, Capitalism, and Socialism. Each type of system is unique in different ways. Each has distinct aspects that make it what it is. In communism, the government runs everything and there are no social classes. The government in capitalism doesn’t interfere with any businesses and lets the citizens own and operate them. 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