Competition as instituted economic process
A challenge to the new economic sociology is that central economic processes
should become the focus of theoretical and empirical sociological analysis.
This chapter makes some steps towards analysing competition in that light,
partly because competition is often assumed to be the market force of all
market forces. The central argument made is both that competition processes
are co-instituted with markets (including end markets), and that market
processes are in turn co-instituted with
There has been increasing interest and debate in recent years on the instituted nature of economic processes in general and the related ideas of the market and the competitive process in particular. This debate lies at the interface between two largely independent disciplines, economics and sociology, and reflects an attempt to bring the two fields of discourse more closely together. This book explores this interface in a number of ways, looking at the competitive process and market relations from a number of different perspectives. It considers the social role of economic institutions in society and examines the various meanings embedded in the word 'markets', as well as developing arguments on the nature of competition as an instituted economic process. The close of the twentieth century saw a virtual canonisation of markets as the best, indeed the only really effective, way to govern an economic system. The market organisation being canonised was simple and pure, along the lines of the standard textbook model in economics. The book discusses the concepts of polysemy , idealism, cognition, materiality and cultural economy. Michael Best provides an account of regional economic adaptation to changed market circumstances. This is the story of the dynamics of capitalism focused on the resurgence of the Route 128 region around Boston following its decline in the mid-1980s in the face of competition from Silicon Valley. The book also addresses the question of how this resurgence was achieved.
capitalism. The contributions
to this volume explore this interface in a number of ways. The purpose of this
Introduction is to place these contributions in the wider context and briefly
to outline the content of the various chapters.
We consider the best place to start to be with the analysis of the nature of
markets by drawing a distinction between the general market system and
particular markets. This inevitably leads us to a discussion of the relation
between markets and competition. The central presence of markets in the
operation of capitalism should require no
whose markets for software were linguistically fragmented. This slow growth of software demand delayed a full-fledged arm’slength market in package software from emerging in the UK despite
considerable national strengths in computing and related sciences.
When a market started to emerge for traded software in the 1980s, niche
market strategies, driven by heterogeneous demand, had an important
impact both on the evolution of firm competences and on the nature of competition and competitive advantage in the UK software sector. While outsourcing of software has been an
material aspects of economic life and in presenting an overly benign view which underestimates the
instrumentality of most economic relations. Finally, I conclude with a reminder
of the political significance of explanations of markets and competition.
The multiple meanings of ‘market’1
If we are to discuss market relations and competition, we need to be clear on
what the former involve. However, such is the variety of uses of the term
‘market’ that it is important to distinguish them if we are not to talk at
crossed purposes. As Maureen Mackintosh observes, these are
concern to understand processes of
evolution in modern capitalism and the mutual penetration of economic and
social processes, for neither markets nor competition are givens, as we
explore below; as instituted relationships, they also evolve.
Several chapters in this collection pick up themes and theses from the
regenerated economic sociology, but generally not in a systematic fashion and
largely without an overt attempt to develop theoretical positions. Other chapters display firmer attachment to the perspectives of evolutionary economics.
Yet others pursue insights
broadcasters, while the fourth
looks at the welfare implications of league collectivity and the exclusivity of
broadcasting rights. The final section draws some conclusions and argues that
the three factors comprising the ‘peculiar economics of football’ require a
dual system of regulation: regulation from below to resolve problems of
corporate governance and misaligned incentives and regulation from above
to prevent distortions of the competition in broadcasting and preserve the
collectivity of the leagues.
Jonathan Michie and Christine Oughton
their money, determines how much of
what is bought by whom. Competition among firms assures that production
is efficient and tailored to what users want.
This chapter’s aim is not to gainsay the present conventional wisdom, but
rather to civilise it, and make it more nuanced and subtle. Market organisation, broadly interpreted, certainly has proved an effective way to govern a
wide range of economic activities, and for a number of these it is hard to
think of an alternative that would do nearly as well.
However, here I want to argue, highlight, that modern societies
types of financial institutions. So banks provided
banking services and building societies provided housing finance
services. As a consequence there was little competition between the
different types of institution. There was also little competition
within a particular financial market as, for example, banks and
building societies operated cartels which set interest rates
almost inevitable, consequence of choosing to start
the analysis of exchange with perfect competition, for competition cannot be
perfect unless every potential buyer has equal and costless access to every
seller, and vice versa. The moment that one provides any structure to these
market relationships competition is no longer perfect. The methodological
necessity of avoiding structure accounts for the extraordinary status of the
‘auctioneer’ as the organiser of the perfect market (for which Walras has
received undeserved blame): the auctioneer has neither preferences