A Competitive Marketplace is good for everyone because it drives down prices. In a Competitive Marketplace, businesses compete against each other to get the consumers’ business. The businesses that are the most successful are the ones that offer the best products or services at the lowest prices.
The Power of Competition
When businesses compete against each other, it forces them to keep their prices low to attract and keep customers.
Through Impact Consumerism, we can promote competition among companies to do more to help make society better.
This benefits consumers because they can purchase goods and services at lower prices. In addition, a competitive marketplace provides consumers with more choices. When there are more choices, consumers can find the product or service that best meets their needs. So, whether you’re a business owner or a consumer, you should be happy when there is competition in the marketplace!
What Inhibits a Competitive Marketplace?
In a perfect system, the market would ensure competition. But in the real world, there are always things that can get in the way of a truly competitive marketplace.
Complicated Causes of a Complicated World
Corporate Personhood
Incentives
Nobody leaves money on the table
Rent Seeking
Rising Inequality – Enough is Enough
The Financial System is Corrupt
We Only Do Things That Make Money
Government Intervention
One thing that can inhibit competition is government intervention. For example, if the government sets price controls, it can prevent businesses from lowering prices to attract customers.
Political Corruption and Rent Seeking
Lobbyists and special interest groups can also impact the level of competition in a marketplace. If these groups can influence government policy, they can create an environment that is favorable to their interests and not necessarily good for consumers or businesses. There is too much money in government, making it difficult for the government to act in our best interest.
Political Favoritism
In some cases, the government may give special favors or subsidies to certain businesses. This can create an uneven playing field and make it difficult for other businesses to compete. This can lead to the government picking winners and losers by tipping the scales to whoever has contributed the most in donations.
Monopolies
Another thing that can inhibit competition is when businesses form monopolies or cartels. A monopoly is a market structure in which there is only one seller. When there is only one seller, that business has complete control over the price of the good or service.
Oligopolies
An oligopoly is a market structure in which there are only a few sellers. When there are only a few sellers, they can collude and agree to charge high prices. This lack of competition can be bad for consumers because it results in higher prices.
How can we ensure the market is competitive?
With powerful forces acting against a free market, we must have policies in place to ensure that the marketplace is as competitive as possible.
Demand Transparency: We Can’t Make Progress if We Don’t Know What’s Going On
ESG Claims Need Transparency: Lobbying Disclosure is the First Step
Impact Consumerism
Legal Reform
Promoting the Common Good
Reform the Finance Industry
Reform the FIRE Sector
The Humanity Index
Demand Transparency
A free market cannot function without information. Demand that the businesses you support are transparent about their business practices. This includes information about their environmental impact, race and gender issues, employees’ wages, and corporate donations—demand corporate transparency.
Hold Business Accountable
Demand Answers from Business
In recent years businesses have taken to acting as if they care about society. Certainly, there are good and decent business leaders, but often these are the exception. “Greenwashing” is rampant among businesses. This is when a business rebrands itself as sustainable or ethical, but its actions don’t back up these claims.
Make sure businesses put their money where their mouth is.
It’s easy to run a commercial. Making a positive difference is much harder. We need to be critical of businesses and demand that they change their practices. That they are helping and not harming society. We can do this by using our power as consumers to vote with our wallets and by investing in companies that are aligned with the common good.
Public Shaming
With social media, you can ask businesses hard questions they’ve avoided for too long. If a business is being unethical, call them out on it. Put pressure on them to change their ways. #askbusiness
Impact Consumerism
Impact Consumerism is a movement that seeks to harness the power of the free market to effect social change. The basic idea is that businesses and consumers can work together to create positive change in the world.
By supporting companies and products that have a positive social or environmental impact, we can do great things. Impact Consumerism is not about charity or philanthropy; it is about using the power of the marketplace to align corporate and societal incentives to drive real, sustainable change. For example, a company might produce environmentally-friendly cleaning products, or provide financial services that help low-income families access credit.
Impact Consumerism is about using the power in your wallet to promote positive change.
It is up to us as consumers to demand that businesses start putting people before profits.
#demandMoreforYourDollar
Support Small Businesses
We need to create a level playing field so that small businesses can compete fairly. We as consumers can support small businesses.
The government should make sure small businesses have the resources they need. The government can help to do this by regulating unfair and monopolistic business practices and providing resources to small businesses.
#StarveConglomerates
You can fight conglomerates and monopolies by doing your best to always support the little guy. Buy from small businesses, local farmers, and independent artists. You might have to pay a little bit more, but it’s worth it to keep money in the hands of those who need it the most.
Boycotts
Another way to ensure competition is by using boycotts. If we don’t like the way a business is treating its employees, the environment, or some other issue, we can vote with our wallets and take our business somewhere else. In the cancel culture era, there are constant freakouts, some more warranted than others.
By not giving businesses that are harming society your money, you can send a powerful message.
Regulation
If the government ever gets its act together and does something, the government can help to level the playing field by regulating businesses. Sometimes businesses need to be forced to compete fairly. By ensuring that there are rules in place, we can create a level playing field and prevent businesses from getting an unfair advantage.
Anti-trust laws are designed to break up monopolies and oligopolies and create a more competitive marketplace. The government can also set standards for products and services, which can help to ensure that businesses are providing a certain level of quality.
Contact your elected representative and ask them what they are doing to ensure we have a fair ad competitive marketplace.
Enforce Competition Laws
It’s important that the government enforces competition laws and punishes businesses that violate them. Otherwise, businesses will continue to engage in unethical and illegal behavior.
Deregulation
But while the government can be a force for good, too often it leans too far toward over-regulation and needless bureaucracy. One way to promote competition is by deregulation. This means removing government regulations that prevent businesses from competing freely. For example, if the government imposes price controls, it can stop businesses from lowering prices to attract customers.
Open Entry and Exit
Another important policy is to ensure that there are no barriers to entry or exit for new businesses. Too often, entrenched businesses make it all but impossible for new entrants to challenge their position. Particularly the largest companies that spend the most on lobbying are in a position to dictate the rules of the marketplace. It’s vital that businesses can enter and exit the market freely so that they can respond to changes in consumer demand.
Free Markets Can Help Us Achieve So Much
A Productive Private Sector: Aligning the Free Market with the Common Good
More Accountability
It’s Up to Us to Demand an Open and Competitive Marketplace
The government can help to create a more competitive marketplace by taking these actions. But ultimately, it is up to us as consumers to demand more from businesses. We need to vote with our wallets and support businesses that are ethical and sustainable.
A Competitive Marketplace is good for everyone because it drives down prices and provides consumers with more choices. When companies get too big or politically powerful, they can distort the market.
We’ve got to be ever-vigilant and demand real answers to tough questions if we’ve going to have a marketplace that’s aligned with the common good.
