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Cooking the Books 1:

The waste of competition

Supporters of capitalism praise competition to the skies, seeing it as a means of keeping prices down and of ensuring that “consumers” get what they want.

Socialists, on the other hand, have always seen economic competition as being (besides the cause of modern wars) an inefficient and wasteful way of distributing what people need and want. For a start, it involves an unnecessary multiplication of productive units and distribution outlets with all the extra resources this uses up. Then there are the resources used up in marketing and advertising, which is aimed merely at persuading people to buy from one firm or shop as opposed to another and which adds absolutely nothing to the amount of wealth in existence.

No wonder Marx commented on capitalism’s “way of distributing products through trade, and its manner of competition” being “very wasteful of material resources” (Volume III of Capital, chapter 5 on “Economy in the use of constant capital”).

So it was rather surprising to hear the head of a profit-seeking capitalist enterprise, Charles Allen, chief executive of ITV plc, echo this socialist criticism of capitalism in the evidence he gave on 7 June to a House of Lords committee looking into the renewal of the BBC’s charter. Asked by the Bishop of Manchester (yes, it’s part of the “democratic deficit” in Britain that bishops of the Church of England are automatically members of parliament) about possible co-operation with the BBC in the North-West, Allen replied that he was all in favour of the BBC, ITV and others sharing the same programme-making studios, adding:

“A lot of money is wasted through duplication: we have our own studios; they have their own studios; we have our own transmission; they have their own transmission; we have our own infrastructure; they have their own infrastructure. What I am really keen to do is actually get the money on the screen rather than wasted in infrastructure” (www.parliament.the-stationery-office.co.uk/pa/ld/lduncorr/bbc0706.pdf).

Wasted in infrastructure! True, but this applies across the board to all manufacturing industry, services, shops and supermarkets. There’s wasteful duplication (triplication, and more) there too.

What Allen apparently wants in broadcasting is the same sham competition as exists in the supply of electricity, gas and telephones. There’s only one infrastructure here too only one national electricity grid, for example with competition limited to firms wasting resources on trying to steal customers from each other.

In socialism resources can be saved to produce needed and useful things by only having one type of distribution outlet in neighbourhoods and only one factory producing computers, cars, washing machines, etc in any one region. Then, we really could concentrate resources on producing best-quality useful things rather than wasting them on duplicated infrastructures.