Editing Capitalism (section)

=== Market competition ===
{{Main|Competition (economics)}}
In capitalist economics, market competition is the rivalry among sellers trying to achieve such goals as increasing profits, market share and sales volume by varying the elements of the [[marketing mix]]: price, product, distribution and promotion. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favourable terms".<ref>{{cite web |url=http://m-w.com/dictionary/competition |title=Definition of COMPETITION |access-date=24 March 2015 |archive-date=4 July 2008 |archive-url=https://web.archive.org/web/20080704114809/http://m-w.com/dictionary/competition |url-status=dead}}</ref> It was described by [[Adam Smith]] in ''[[The Wealth of Nations]]'' (1776) and later economists as allocating productive [[resource]]s to their most highly valued uses<ref>{{cite encyclopedia |first=George J. |last=Stigler |author-link=George J. Stigler |date=2008 |title=competition |dictionary=[[The New Palgrave Dictionary of Economics]] |edition=2nd |url=http://www.dictionaryofeconomics.com/article?id=pde2008_C000261&q=competition&topicid=&result_number=6 |archive-url=https://web.archive.org/web/20150215032134/http://www.dictionaryofeconomics.com/article?id=pde2008_C000261&q=competition&topicid=&result_number=6 |archive-date=15 February 2015}}</ref> and encouraging [[x-efficiency|efficiency]]. Smith and other [[classical economist]]s before [[Antoine Augustin Cournot|Antoine Augustine Cournot]] were referring to price and non-price rivalry among producers to sell their goods on best terms by bidding of buyers, not necessarily to a large number of sellers nor to a market in final [[Economic equilibrium|equilibrium]].<ref>{{cite encyclopedia |first=Mark |last=Blaug |author-link=Mark Blaug |date=2008 |title=Invisible hand |dictionary=[[The New Palgrave Dictionary of Economics]] |edition=2nd |volume=4 |page=565 |url=http://www.dictionaryofeconomics.com/article?id=pde2008_I000220&edition=current&q=Invisible%20hand&topicid=&result_number=1  |archive-url=https://web.archive.org/web/20130605204024/http://www.dictionaryofeconomics.com/article?id=pde2008_I000220&edition=current&q=Invisible%20hand&topicid=&result_number=1 |archive-date=5 June 2013}}</ref> Competition is widespread throughout the [[market process]]. It is a condition where "buyers tend to compete with other buyers, and sellers tend to compete with other sellers".<ref name=ewot2014 /><!-- p. 102 --> In offering goods for exchange, buyers competitively bid to purchase specific quantities of specific goods which are available, or might be available if sellers were to choose to offer such goods. Similarly, sellers bid against other sellers in offering goods on the market, competing for the attention and exchange resources of buyers. Competition results from [[scarcity]], as it is not possible to satisfy all conceivable human wants, and occurs as people try to meet the criteria being used to determine allocation.<ref name=ewot2014>{{cite book |last1=Heyne |first1=Paul |last2=Boettke |first2=Peter J. |last3=Prychitko |first3=David L. |title=The Economic Way of Thinking |date=2014 |publisher=Pearson |isbn=978-0-13-299129-2 |pages=102–106 |edition=13th}}<!--|access-date=24 December 2014 --></ref>{{rp|105}}

In the works of Adam Smith, the idea of capitalism is made possible through competition which creates growth. Although capitalism had not entered mainstream economics at the time of Smith, it is vital to the construction of his ideal society. One of the foundational blocks of capitalism is competition. Smith believed that a prosperous society is one where "everyone should be free to enter and leave the market and change trades as often as he pleases."<ref name="W.W. Norton">{{cite book |last1=Warsh |first1=David |title=Knowledge and the Wealth of Nations |date=2007 |publisher=[[W.W. Norton]] |page=42}}</ref> He believed that the freedom to act in one's self-interest is essential for the success of a capitalist society. In response to the idea that if all participants focus on their own goals, society's well-being will be water under the bridge, Smith maintains that despite the concerns of intellectuals, "global trends will hardly be altered if they refrain from pursuing their personal ends."<ref>{{cite book |last1=Lippit |first1=Victor |title=Capitalism |date=2005 |publisher=[[Taylor & Francis]] |location=ProQuest |page=2}}</ref> He insisted that the actions of a few participants cannot alter the course of society. Instead, Smith maintained that they should focus on personal progress instead and that this will result in overall growth to the whole.

Competition between participants, "who are all endeavoring to justle one another out of employment, obliges every man to endeavor to execute his work" through competition towards growth.<ref name="W.W. Norton"/>