Toward a Concrete Concept of Effective Competition

In presenting a concept of effective competition—that is, of a socially desirable state of affairs in an industry or a market—a writer should be specific about the issues, definite about his own views, explicit about necessary versus sufficient conditions, realistic about whether desirable conditions are attainable, discriminating in judging between a condition and its effects, comprehensive in listing market deficiencies, and stringent in describing his ideal. By this author's standards, a market is effectively competitive if and only if it is free of 25 flaws: unsatisfactory products, underuse or overuse, inefficient exchange, inefficient production, bad externalities, spoliation, exploitation, unfair tactics, wasteful advertising, irrationality, undue profits or losses, inadequate research, predation, pre-emption, tying arrangements, resale price maintenance, refusals to deal, undesirable discrimination, misallocation of risk, undesirable mergers, undesirable entry, misinformation, inefficient rules of trading, and misregulation.