Importance of Competition within a Market

Throughout history, and even today, the importance of competition within a market has been recognized. Without competition it is impossible for the market to be guided by an invisible hand and the economy will ultimately falter, with both consumers and manufacturers suffering. This can be seen both within the game and within a historical perspective, showing the truth that can shine through. Although it is seen on a more global level within the game, the same types of truths can be applied to a a real life domestic situation. Although there have been points in history where this competition was endangered, governments have realized the problems that would result and have taken steps to prevent the endangerment of a free market without restrictions on competition.

Within the American economy there was a time when large trusts and corporations came to dominate the market and essentially eliminate competition, allowing them to set high prices that had to be paid if a certain good or service was desired. As the robber barrons began to take over they dominated the market in their fields, setting high prices and becoming rich while preventing the poor from affording goods and services that were sometimes necessary to their lives. According to Heilbroner in chapter five of The Making of Economic Society, "a production syste originally characterized by large numbers of small enterprises increasingly gave way to one in which production was concentrated in the hands of a relatively few." (88) Although this initially increased competition because small monopolies in small towns were eliminated by the large scale competition, but as trusts were formed and businesses grew even larger than the government prices remained high and sometimes inaffordable. However, the governent realized the danger that these monstrous trusts could cause both on competition and even on the government of the nation and passed laws such as the Sherman Antitrust Act and the Clayton Antitrust Act to prevent these trusts from continuing in such a monopolistic manner.

This same type of logic can be applied in the game, although it will usually be on more of a global scale than a domestic scale. However, even domestically if too much production is concentrated in one city the people become ill because of the fumes and all of the other cities have insufficient funds and food. If this happens then the other cities will suffer and the people in these cities will suffer and may even starve. In the same way, if one nation holds the entire supply of a certain good, service or idea that another nation wants they can either hold it for themselves and be the sole benficiary or can sell it for a very high price. Therefore, it is good to develop the first ideas and technologies in the game, before competitiors, in order to hold a certain type of advantage. However, these ideas and technologies should not be limited to only one city within a nation or the results could be disastorous.

Competition is essential within any market economy and if it disappears the economy will eventually suffer. Although it may seem like a good option at the time, governments have realized the dangers and passed laws to prevent trusts or monopolies from taking over. This same logic can be applied in order to ensure a successful economy within the game.