Competition is driving force of a rapidly-changing world

From: William Snowden, Butterbowl Gardens, Leeds.

BARRIE Frost’s concept of “fair competition” (Yorkshire Post, June 6) sounds reasonable – in a perfect world. But we live in an imperfect and diverse world.

Economists use concepts of the “perfect world” but only to test their theories. Perfection is illusory.

Hide Ad
Hide Ad

The concept of laissez-faire or free trade between nations, is well established. It is good practice; for the alternative would be some form of protectionism, in which trade barriers and/or import tariffs, were imposed to protect indigenous producers from “unfair” foreign competition.

Such measures tend to provoke adverse reactions, and the imposition of reciprocal barriers to the export of domestic goods to foreign markets – trade wars. Neither sensible or sustainable.

The concept of fair trade is relatively new. It was promoted (by charities like Oxfam, for example) and adopted to allow small producers in poor countries to gain access to mass markets and, moreover, to be paid a fair price, a premium, for their produce. I choose to buy, for example, fair trade bananas.

But, in truth, is competition ever truly “fair”?

Sport provides a useful analogy: when I was young, I was an athlete and all-round sportsman. I took part in competitions. Were they fair? Well, yes, in the sense that the rules and regulations were applicable to all competitors and fairly administered.

Hide Ad
Hide Ad

And yet... some of the competitors had natural advantages; talents and abilities; skills honed by having access to excellent training facilities, and methods of coaching, and dietary advice.

That is why, in any natural competition, there are always winners and losers.

Similar factors affect markets. Countries are not equal, particularly in terms of natural resources, and relative costs of production (fixed and variable). Emerging nations capitalise by investing in new technology, plant, equipment and machinery. This, combined with the lower cost of labour, translates into highly competitive prices for goods and services.

This situation obtained even before the advent of “globalisation”.

Hide Ad
Hide Ad

Some 40 years ago, when I was a sportsman, I was surprised to learn that sportswear supplied by the German company Adidas, was made in South Korea. The Marks & Spencer “St Michael” brand proudly boasted “Made in Britain”. Even M&S had to control costs and be competitive. Now its products are predominantly made in China, Sri Lanka, Indonesia... not fair, perhaps, to British manufacturers, but the harsh, economic reality of a changing world.

The deep coal mining industry did not decline as a consequence of some Machiavellian conspiracy, but because of competition and changing patterns of demand: coal prices and coke-fired boilers, domestic and industrial, were replaced in favour of “clean fuels and energy” – though militancy was a catalyst.

That process continued apace: Drax and Eggborough power stations are to convert coal-fired boilers to burn biomass, which is renewable and “carbon neutral”.

I am a traditionalist. I had milk delivered to my door, until the milk round became unviable because former customers chose to buy cheaper milk from supermarkets.

Hide Ad
Hide Ad

As to Royal Mail, it has been subject to fierce competition – but from texts, emails and social media. How many people write handwritten letters and send them through the post? I do (as the long-suffering Yorkshire Post letters editor and typist may testify!), but I am an anachronism; a romantic!

We live in a rapidly-changing world, Mr Frost; we can’t stop what is to come. We may only try to alleviate the unfortunate consequences of change, and seek to compensate those who are, perhaps, unfairly affected by fierce processes of competition.