Alternative Theories of Competition: Challenges to the Orthodoxy

361 Pages·2012·7.34 MB·English

by  Jamee K. Moudud

Alternative Theories of Competition
The history of policymaking has been dominated by two rival assumptions about markets.
Those who have advocated Keynesian-t ype policies have generally based their arguments
on the claim that markets are imperfectly competitive. On the other hand laissez faire
advocates have argued the opposite by claiming that in fact free market policies will elim-
inate “market imperfections” and reinvigorate perfect competition. The goal of this book
is to enter into this important debate by raising critical questions about the nature of
market competition.
Drawing on the insights of the classical political economists, Schumpeter, Hayek, the
Oxford Economists’ Research Group (OERG), and others, the authors in this book chal-
lenge this perfect versus imperfect competition dichotomy in both theoretical and empiri-
cal terms. There are important differences between the theoretical perspectives of several
authors in the broad alternative theoretical tradition defined by this book; nevertheless, a
unifying theme throughout this volume is that competition is conceptualized as a dynamic
disequilibrium process rather than the static equilibrium state of conventional theory. For
almost all the others the growth of firms is consistent with a heightened degree of com-
petitiveness, as both Marx and Schumpeter emphasized, and not a lowered one as in the
conventional “monopoly capital” view.
The empirical literature on profit rate equalization goes back at least fifty years – a
finding generally ignored by the “monopoly capitalism” school and misinterpreted by
neoclassical authors as being consistent with perfect competition. And yet the data
deployed by the authors in the book involve very large firms which cannot possibly be
described as perfectly competitive ones. In short, both the theoretical and empirical chap-
ters attack the perfect versus imperfect competition at its roots. Collectively, the book
suggests that policy debates need to be grounded in a radically different analysis of
competition.
Jamee K. Moudud is Professor of Economics at Sarah Lawrence College, New York,
USA.
Cyrus Bina is Distinguished Research Professor of Economics and Management at the
University of Minnesota, USA.
Patrick L. Mason is Professor of Economics at Florida State University, USA.
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Challenges to the orthodoxy
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Alternative Theories of
Competition
Challenges to the orthodoxy
Edited by Jamee K. Moudud, Cyrus Bina
and Patrick L. Mason
First published 2013
by Routledge
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Simultaneously published in the USA and Canada
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© 2013 Selection and editorial matter, Jamee K. Moudud, Cyrus Bina and
Patrick L. Mason; individual chapters, the contributors
The right of Jamee K. Moudud, Cyrus Bina and Patrick L. Mason to be
identified as the authors of the editorial material, and of the authors for
their individual chapters, has been asserted in accordance with sections 77
and 78 of the Copyright, Designs and Patents Act 1988.
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British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Alternative theories of competition: challenges to the orthodoxy/edited by
Jamee K. Moudud, Cyrus Bina and Patrick L. Mason.
p. cm.
1. Competition. 2. Economic policy. 3. Capital. I. Moudud, Jamee K.
II. Bina, Cyrus, 1946– III. Mason, Patrick L.
HB238.A48 2012
338.6′04801–dc23 2012006039
ISBN: 978-0-415-68687-7 (hbk)
ISBN: 978-0-203-10267-1 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
This book was inspired by the analysis of competition of the
classical political economists, Schumpeter, and the Oxford
Economists’ Research Group, whose contributions jointly
suggest an analysis of the firm that is based on a dynamic
conceptualization of actually existing competition in capitalist
economies. Accordingly, we dedicate this volume to the
scholars who continue to labor in that tradition and who,
thereby, persist in working for an understanding of economics
that is liberated from the false ideals of orthodox economics.

Contents
List of figures xi
List of tables xiii
List of contributors xv
Foreword by John Weeks xviii
Acknowledgments xx
Introduction: the search for an alternative 1
1 The fallacy of competition: markets and the movement of
capital 13
JOHN WEEKS
2 The hidden history of competition and its implications 27
JAMEE K. MOUDUD
3 Synthetic competition, global oil, and the cult of monopoly 55
CYRUS BINA
4 Catallactic competition, business organization, and market
order 86
JACK HIGH
5 Schumpeterian competition 111
J. STANLEY METCALFE
6 The theory of innovative enterprise: methodology, ideology,
and institutions 127
WILLIAM LAzONICK