Wednesday, December 01, 2010

Competition Brings About Economic Growth

In an article, “Greater competition in mobile providers accelerates business growth in Solomon Islands” the World Bank writes, (bold highlights mine)

The introduction of a new mobile phone provider earlier this year has significantly reduced call costs in Solomon Islands.

More people now have access to cheaper telecommunications services, resulting in business growth due to better access to market information.

The multilateral 'government' institution admits that competition is the essence of business and or economic growth.

As Friedrich A. Hayek wrote in The Meaning of Competition

Competition is essentially a process of the formation of opinion: by spreading information, it creates that unity and coherence of the economic system which we presuppose when we think of it as one market. It creates the views people have about what is best and cheapest, and it is because of it that people know at least as much about possibilities and opportunities as they in fact do. It is thus a process which involves a continuous change in the data and whose significance must therefore be completely missed by any theory which treats these data as constant

In a competitive society, everybody’s opinion counts because they are expressed through the markets. And competition brings out the best in men, mostly for the benefit of society.

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