“Competition is not only the basis of protection to the consumer, but is the incentive to progress.” – Herbert Hoover
Adam Smith (1723-1790), the father of modern economics, believed that competition in capitalism would benefit society by lowering prices, improving goods and services, and keeping everyone honest.
As a theory, it works nicely. In general practice, however, business competition isn’t necessarily focused on what’s best for society and consumers.
In recent times, bailout money, pollution, cooking the books and untrue advertising shows that some companies favor profit over societal values.
We’ve all heard stories of competition in business going way beyond what Adam Smith ever envisioned as fair and equitable, becoming self-destructive cannibalization of the organization. Think Enron and the auto industry bailouts.
Our current paradigm of capitalist competition is steeped in a world-view of scarcity of resources where the objective is not necessarily to better society at large, but to eliminate your rival. In this model, limited rewards trump ethical behavior and the rules of engagement are skewed toward selfish self-interest rather than a focus on everyone involved, including customers and society.
Let’s consider some approaches to doing business.
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