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Classical vs. Neoclassical Conceptions of Competition

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  • Tsoulfidis, Lefteris

Abstract

This article discusses two major conceptions of competition, the classical and the neoclassical. In the classical conception, competition is viewed as a dynamic rivalrous process of firms struggling with each other over the expansion of their market shares at the expense of their competitors. This dynamic view of competition characterizes mainly the works of Smith, Ricardo, J.S. Mill and Marx; a similar view can be also found in the writings of Austrian economists and the business literature. By contrast, the neoclassical conception of competition is derived from the requirements of a theory geared towards static equilibrium and not from any historical observation of the way in which firms actually organize and compete with each other.

Suggested Citation

  • Tsoulfidis, Lefteris, 2011. "Classical vs. Neoclassical Conceptions of Competition," MPRA Paper 43999, University Library of Munich, Germany, revised Oct 2012.
    • Handle: RePEc:pra:mprapa:43999
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    References listed on IDEAS

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    1. Lefteris Tsoulfidis, 2024. "Competing Schools of Economic Thought," Springer Studies in the History of Economic Thought, Springer, edition 2, number 978-3-031-58580-7, December.
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    11. Lefteris Tsoulfidis & Persefoni Tsaliki, 2005. "Marxian Theory of Competition and the Concept of Regulating Capital: Evidence from Greek Manufacturing," Review of Radical Political Economics, Union for Radical Political Economics, vol. 37(1), pages 5-22, March.
    12. G. J. Stigler, 1972. "Perfect Competition, Historically Contemplated," Palgrave Macmillan Books, in: Charles K. Rowley (ed.), Readings in Industrial Economics, chapter 7, pages 105-130, Palgrave Macmillan.
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    Cited by:

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    2. Payam Hanafizadeh & Seyedali Marjaie, 2020. "Trends and turning points of banking: a timespan view," Review of Managerial Science, Springer, vol. 14(6), pages 1183-1219, December.
    3. Richard Itaman & Christina Wolf, 2021. "Industrial Policy and Monopoly Capitalism in Nigeria: Lessons from the Dangote Business Conglomerate," Development and Change, International Institute of Social Studies, vol. 52(6), pages 1473-1502, November.

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    More about this item

    Keywords

    Classical Competition; Regulating Capital; Incremental Rate of Return; Rate of Profit; Perfect Competition;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian

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