Sunday, September 7, 2008

Competition v Cooperation

Competition and cooperation are two opposites which exist everywhere. We live in a system which values competition. Our whole economy is based on it; businesses compete for the consumer's business and cut their prices in order to get that business. This is the mechanism which stops prices from rising due to the greed of the seller.

The problem with competition is that it is resource intensive. It requires at least 2 businesses with the same or similar product. It then requires the consumer to go to both sellers, negotiate and finally buy from one of them. The consumer expends a lot of effort. Both sellers expend a lot of effort and one of them does not get the sale and so wastes his effort. Unless there is a significant profit in selling the item it's not worth it. As a result, competition does not work well for small items-which are the vast majority of the transactions occurring every day.

A cooperative system would solve this problem. It would be much more efficient.

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