Competition as a Basic Element of the Social Market Economy

Extract

Competition is a value in itself. It is not directed towards specific objectives.

Market economy can be fitted into the categories of the theory of decision-making. Decision-makers are individuals, not a collective entity like the state. The objects of decision-making are arbitrary and therefore necessarily unknown. Legally speaking, the participants are making use of their personal autonomy. The procedure of decision-making is the contract, the voluntary reaching of an agreement with another party. The order achieved through such a process cannot be directed towards specific objectives. The methodological reason for this is: freedom would be abolished if one attempted to define its content in advance. Market organisation through competition is the spontaneous order that results when people coordinate their actions by way of mutual adjustment in transmitting and receiving information. Only statements about the general structures of such a system (pattern predictions) are possible. Such a systemt results in mutual advantages for the individuals involved, and in economic overall advantages, as a generic term for growth, inducement and unfolding of technological progress and efficient allocation. This general social task that is achieved by the exercise of individual freedom remains recognisable, even though it may be difficult to discern in the individual case.