Related: auction, bid, border, exclude, monopoly, rival http://en.wikipedia.org/wiki/Perfect_competition "Perfect competition is an economic model that describes a hypothetical market form in which no producer or consumer has the market power to influence prices. According to the standard economical definition of efficiency (Pareto efficiency), perfect competition would lead to a completely efficient outcome. The analysis of perfectly competitive markets provides the foundation of the theory of supply and demand. Perfect competition is a market equilibrium in which all resources are allocated and used efficiently, and collective social welfare is maximized.[1]" Workers compete for wages. Consumers compete for product. Capitalists compete for profit. Consumers compete to rent or buy Capital and Land. A physical resource can be shared among a finite number of people. As the number of users attempting to utilize the physical resource increases, the ability to fullfill those requests decreases. This is a scheduling (time allocation or time sharing) problem. An auction allows potential users to to bid anyone wanting to rent it are bidding against each other, then more time slots will be filled. People that want to rent close to 'cost', and are willing to lose some sleep will rent at 2am, while other people will be willing to "fight it out" for a slot at 12 noon in a bid war. As the deuling bidders raise their own price for that time slot, they are *proving* that the current number of machines cannot fill peak demand, and - since that "price above cost" will be invested for the winning bidder toward buying ANOTHER machine, the 'system' should be self-stablizing. user competition is resolved by "auctioning" the good. user competition is resolved by increasing production. Competition between sellers of product Competition between sellers of labor power workers are not required to compete Competition is maximal when sources are free. Compete.org >>The Council on Competitiveness is the only group of corporate CEOs, university presidents and labor leaders committed to the future prosperity of all Americans and enhanced U.S. competitiveness in the global economy through the creation of high-value economic activity in the United States. From the Progress.org "Economic Justice Discussion Room" Subject: Only OWNers compete directly, Workers suffer Usury Posted By: Patrick Anderson Date: Thursday 7 September 2006, at 1:32 p.m. In Response To: Re: What real competition is. (Magrathea) >> Wages are determined by a mixture of things, >> but when Owners are not the very Consumers >> of the Pins, they will shut down (and >> usually destroy) the Factory if the wages in >> the area become "too high" to >> extract profit. > Well, like anyone else, he prefers cheap > services I'm not trying to protect Workers nearly as much as I'm trying to protect Consumers, but they are both currently exploited by OWNers. If Consumers were voting joint OWNers of the Sources, there could never be much Profit (exploitation) because, since the Factory is available for *any* qualified Worker to compete for positions they will be paid directly by the Consumer, there is no "middle man" to take a slice of the pie. > Look on the 'bright side', tho, he has just > raised wages marginaly elsewhere If Consumers OWNed the Sources, we do not need to protect the act of Working or "prop up" or even be the least bit concerned about Wages. It is CONSUMPTION we must assure, not the lack of leisure. >>> Imagine if these pin making owners colluded and >>> artificialy raised the price of pins way >>> beyond what was needed to actually create >>> the pins. >> That is the very DEFINITION of "profit". Any business not making a "profit" in this manner is considered a failure in our current system. > That simply isn't true Oops. You're right. That would be Monopoly. I was answering just part of the question> "artificialy raised the price". Profit is an artificially raised price, and can be held quite high when "ramp up" costs prohibit competition. Why would you say it is that we pay Exxon so much Profit? Why don't we, the Consumers, just OWN the oil rigs ourselves and pay the Workers the same as they currently receive? It would save us *so much* money. I say the reason is that we (the Consumers) have not found a good way to organize such a thing. Profit is defined as all value extracted after all Costs and Wages have been paid. Consumers pay part of Profit as: Prices above Costs + Wages. Workers pay part of Profit as: Wages below Consumer_Price - Costs. > Profit does not rely on cullusion between > suppliers Right, sorry, that would be Monopoly. But Profit in Capitalism DOES rely upon competition being only between OWNers, never directly between Workers. This is 'enforced' by the fact that a Worker does not have "at cost" access to the Sources of production (such as a factory) unless he OWNs it, and by that time he simply becomes another Usury extracting OWNer - he has only changed roles. If the Worker had "at cost" access to the same tools he currently uses in the factory (without having to OWN the entire factory), then, when a potential Consumer is willing to pay for the item, the Worker receives exactly: Consumer_Price - Real_Costs. Remember, the Worker currently receives: Consumer_Price - Real_Costs - Owner_Profit. When new Consumers become voting OWNers of the Sources of production whenever they BUY the Outputs of that production (say the Pins), and any qualified worker is entitled to compete for positions in the factory by periodically bidding to RENT the very machines he was before being paid a Wage to operate. If renting feels too complicated, (and for many workers it will be useful to just stay on a Wage from a Manager that would rent the machines, and take whatever amount the Workers will temporarily bear) you can always work under an umbrella of Management. The important point is that almost all Workers will eventually begin to bid for the machines directly, while possibly hiring their Managers back at a much reduced Wage. Workers will eventually become independent artisans in whatever field they choose without ever the need of a boss. > As i just demonstrated, if suppliers do attempt > to gang up on consumers and raise prices > other suppliers are implicitly invited to > undercut them profitably. Yes, OWNers compete with OWNers, but Workers may compete only by suffering an extraction of Profit, or by OWNing an entire Factory - and at that point the problem simply changes hands - to the new set of OWNers that eventually hire new, NON-OWNing Workers that they begin extracting Profit from. Workers who use expensive capital generally cannot compete directly with each other. OWNers compete with OWNers. > Most profits from > production are made without any collusion > because a cartell of that nature is very > unstable (unless it is enforced by > government or such) Yes, but competition is only between the few OWNers, not between all qualified Workers. > It costs you x amount to make a pin It costs > 'PinsRus' Y amount to make a pin If it costs > a hypothetical second company 'PINSPINSPINS' > even less than pinsRus to make the same > quality pins then this company can both > undercut pinsRus, take your custom and make > money from the transaction. It is in their > interests to undercut pinsRus (if they can) > As illustrated above profit (in production) > comes from differentials in productive > effectiveness (eficiency) and rewards more > efficient producer / supplier s with a bonus > related to his increased efficiency in > suplying human wants >> Their (Monopoly) power is as stable as the >> "ramp up" costs of starting yet another >> Pin Factory, or the costs of "buying out" >> the competing OWNers. > Which is no power at all It is power, otherwise Profit would always be 0, else why would we suffer it? It is because it is not 0 cost to start a business, especially one that is a 'Factory'. There are "ramp up" costs that allow the OWNers exact Profit from the Consumers, especially when the Consumers are financially insolvent (as most Working-Class are), and are unable to organize with each other (which is what I'm trying to figure out how to make happen). > Are you going to buy out anyone who starts a > pin bussiness? Not neccessarily "buy out", more likely Consumers of such pins would begin to build their OWN factory, though buying an otherwise failing factory could be a great option in the future, as this Mode of Production decimates the current system by the fact that it will simply outperform it. > If so, i have a marvelous way to make money out > of you What do you mean? > That's true..but, in your scenario, if > consumers own the pins why are they buying > them? Well, there are real Costs in making Pins. The investment in Land and Tools, installation and maintenance, power, input material (steel ingots for instance), etc. The Workers will also need to be paid. There are many ways this might occur. The Worker may be receiving a Wage from a Manager that deals with many things, including adjusting Prices according to Consumer demand. In other cases (increasing with time) the Workers will be renting the machines directly while possibly paying a Wage to a Manager. At that point 'Wage' (essentially Worker_Profit) would be> Consumer_Price - Real_Costs - Manager_Wage. So the Consumers will BUY pins from themselves only until all Costs can be reduced to 0, and until Workers are willing to do whatever has not been automated for 0 compensation. Since there will probably always be some Real_Costs, and since Workers will never work for 0, the Consumers must always pay for Pins, even though they own the Sources (Factory, energy, input materials) of those Pins. Occasionally the Consumer may want to bid to rent a machine for their own purposes (if the qualify); in that case the payment for the Work is: Real_Costs + Machine_Demand, where Machine_Demand is that amount that other Workers are Overbidding beyond the Real_Costs for the OWNers to offer that machine for use. Funds gathered from Overbidding should probably be used to buy more Sources of that type, as it is an indication that demand is high. > They would > But as they already own the pins, why would > there be any price at all? Because there are real costs involved in making pins, including Worker compensation. > Why not reduce pin prices to zero and give > themselves a freebie? In some cases this will be true for Consumers that OWN a large % of a 'generative' Source such as an apple tree, because the Workers can easily be paid for less than the output. But also remember that part of the output of any production will probably also be used to pay some sort of LVT for the fact that your apple tree is sitting on community land. > who are they paying for the pins?..surely the > people they pay for the pins, effectively > own the pins? Again, there are real costs. >> If, within such >> an arrangement, some Workers tried to >> increase prices beyond what someone else >> would be willing to do the work for, those >> colluding Workers would quickly be "out >> bid" by other Workers that agreed to do >> the work for less. > That's precisely what happens now But the competition only occurs DIRECTLY between OWNers. Workers cannot compete DIRECTLY with each other unless they want to suffer having Profit extracted from them, or unless they become OWNers themselves.