Globalisation has become a universal phenomenon and even countries not favouring this earlier are now engulfed by the creed. The liberal approach to economic problems and dissemination of technical know-how and proliferation of technology are expected to boost economic development everywhere and improve the living standards of the people. Material wealth has shown tremendous increase in some countries like India and China, which welcomed globalisation. There is great mobility of personnel between countries all over. In the wake of globalisation the tool of competition, which has been the monopoly of capitalist economies, has spread its tentacles far and wide and shown its teeth in other countries also. It is hoped competition will ensure the lowest cost and better utilisation of resources providing a wide variety of goods and services to people.
While economies have shown progress materially, by way of living standards and life styles, disparities in income have widened. It is true that many millionaires and billionaires are generated. Their life style and consumption habits increase the demand for goods and services. But for producing such goods and services shifting of resources from areas of mass production of necessities intended for the poor, to meet the requirements of the rich and the upper middle class, takes place.
This is seen in the area of housing where costs are soaring sky high making it impossible for the poor even to dream of a shelter above their heads. Costs are rising and for certain sections of the population essential goods become unaffordable. The fierce competition among business firms and their craze for capturing larger market share create the twin problems of resources crunch and high cost economy. This raises the question whether competition is a desirable philosophy in the long run for sustainable economic development.
Is there not need for new concepts and approaches to ensure equitable and sustainable development so that the benefits of growth can be shared by a larger number of people? Can economics dominated by private enterprise and competition be trusted as a reliable tool for global development considering the fact that over two billion people live in abject poverty? While competition is the essence of free enterprise should we allow this to remain in the economic scene forever as a tool of development?
Review of results and impact of competition shows merits and demerits. Competition ensures efficient use of resources because firms are forced to bring marginal resources into the production process to meet consumer needs. This is believed to ensure efficiency of the factors of production. Consumer satisfaction is another benefit assigned to competition, which seeks to satisfy needs by producing a wide variety of goods and services. (To be continued)