A new era of competition has emerged since the 1970s, especially in connection with the globalization of economic processes. Competition is no longer describing a mode of functioning of a particular market configuration (a competitive market) as distinct from oligopolistic and monopolistic markets. To be competitive has ceased to be a means. Competitiveness has acquired the status of a universal credo and ideology. For capital competitiveness has become the short and middle term primary goal whilst profitability remains the long term goal and the reason for the existence any enterprise. For government, the competitiveness of the country is now the primary concern, with the view to attract and retain capital within its territory, in order to secure a maximum level of employment, access for local capital to global technology, and revenue needed to maintain a minimum of social peace. The competitiveness imperative between commercial enterprises and between nations has also permeated and now directs the behaviour of board members of universities and colleges, education ministries, trade unions, national parliaments, mass media, and urban planners.
Unrestrained and taken to excess as it tends to be, the ideology of competition overrules other approaches to organizing economic, political and social life. It imposes its logic upon other human, social and environmental dimensions, often pretending that it needs to ignore them as of secondary consideration. It obscures recognition that it is not the only value that can operate in the service of individual countries.
As the relative economic size of the USA and its pre-eminence in certain lines of production diminished, the relative size of other major market economies grew and their trade policies assumed greater global significance. The progressive reduction of technological gaps and disparities in patterns of consumption and production accompanied the reduction of disparities in income caused competition among them in world markets and home to become more intense.
There is a new and pervasive competitive climate for business in Europe, responding to American and Japanese rivals. This has resulted in mergers and strategic alliances to help create giant companies, which can hold larger market shares and reap economies of scale. The rate of mergers and acquisitions has more than doubled between 1987 and 1989.
Overriding competition fails to address the major challenges of: socio-economic inequalities within nations and between nations, and the marginalization of large parts of the world; exploitation of, and damage to, the global life support systems of the natural environment; concentration of power in largely unaccountable economic units, notably transnational corporations.
Hyper competitiveness has made the economically strong and rich countries stronger and richer by favouring economic integration at the global level amongst the most developed countries. The exceptions, namely the industrialized countries of Southeast Asia, are not due to competitiveness but rather to providing new sites favourable to the investment and growth of multinational corporations.
Having failed industrially, the USA and the UK are now trying to undercut the welfare compromises of their more successful neighbours through the North American Free Trade Area, in the US case, and through resistance to the EEC/EU social chapter in the case of the UK. They are also using their military and armaments strength as an export earner.
Competition for the efficient exploitation of natural resources and the generation of new means to satisfy individual and collective needs at lower costs and higher quality has contributed greatly to the improvement of both material and non-material levels of wealth and the development of a better quality of life. As one of the driving forces for technological innovation and growth in productivity, competition has stimulated new levels of human aspiration and made high records of achievement possible.
Strengthening competition is a key element in ensuring the success of deregulatory economic reforms adopted worldwide in recent years. Productive resources are thereby allocated in an efficient and flexible manner through the decentralized decisions of market operators rather than by government direction or through rent-seeking activity. Through competition consumer dissatisfaction serves as a market sanction for poor performance. For this purpose, market forces need to be supported by appropriate rules of competition.