The Mackinac Center for Public Policy advances the principles of free markets and limited government. Free markets are characterized by competition.
But what is competition?
If you ask Lawrence W. Reed, he’d say this: Competition is striving for excellence in the service of others for self-benefit.
He shared this definition with a group of Mackinac Center supporters, Northwood University students and others who gathered last fall for his lecture, “Lessons from the Robber Barons: Monopolies and Markets.” The lecture, co-sponsored by the Mackinac Center and Northwood University, was supported by The Charles M. Bauervic Foundation.
Reed was previously a professor of economics at Northwood University and president of the Foundation for Economic Education. He also served as the founding president of the Mackinac Center for Public Policy for 21 years.
To illustrate his definition of competition, Reed explored the life and business of John D. Rockefeller, founder of the Standard Oil Company. Rockefeller found creative ways to produce kerosene more and more cheaply, expanding the company’s share ofthe market to 90% by 1890 — what many would consider a monopoly.
Reed cautioned against judging a market or monopoly by a single snapshot in time. “As long as markets are free, they will be dynamic,” he said.
In the case of Standard Oil, 1890 is when many companies that would become oil giants were just getting started. Long before the Supreme Court rendered a judgment against Rockefeller’s company in 1911, its share of the market had already waned.
How? By competition, of course.
Competition also promotes pro-social behavior. “In a free economy, the best way to provide for yourself is to find a way to please other people,” Reed said.
But when an economy is dominated by political power, the best way to get ahead is to take from others by using the political process.
Students took careful notes during the lecture, hoping to participate in an essay competition sponsored by The Bauervic Foundation. Contest participants will contrast the roles of government and market forces in enabling free and responsible speech, drawing on principles from the lecture.
Free-market approaches empower people to realize their potential and their dreams. Reed’s lecture crystallized this principle with concrete definitions and examples, giving the audience a stronger grasp and a more nuanced understanding of free-market principles.
To learn more about the 2023 Bauervic Essay Competition, please visit mackinac.org/essay. You can also watch the recording of this event on our website.