Competition vs. Collusion
By Sah Dong-seok
Deputy Managing Editor
Several months ago, I dropped in at a legal counsel's office in the southeastern inland city of Sangju to have farmland my father-in-law had inherited from his ancestors registered. While having a consultation at the office, I felt disturbed because the clerks there were unkind and stiff, and so I left the office without entrusting the work to them. I visited several other offices but attitudes of the office workers there were similarly cool.
Later I found that most legal counsels in the city in North Gyeongsang Province were bound by a pact under which they were supposed to receive the same fees on a monthly basis irrespective of the number of cases taken. Paradoxically enough, both the legal counsel office and employees were gaining if they didn't receive orders. It looked as if collusion among the legal counsels to keep registration fees high and maximize profits without competition has brought enormous losses to consumers. Ultimately, I gave my order to a counsel not affiliated with the pact but I felt very bitter about losses and economic inefficiency arising from the lack of competition.
As is shown in this case, competition is uncomfortable and collusion is sweet. Everyone dreams of avoiding competition and leading an equal and easy life. Competition is not only severe and inhuman but also requires us to trample others. Therefore, an equal world without competition has been the mankind's long-cherished dream and the birth of socialism putting priority on equality was somewhat inevitable. Socialism, a comfortable and humane ideology rejecting competition, exists on restraint and cooperation, envisioning that people can own as much as they want without greed. Yet the very selfish human nature made the gigantic socialism experiment a total failure.
In acute contrast, capitalism is based on competition. In this society, competition is the driving force of progress and advancement. It goes without saying that without competition, people would be lazy and wouldn't make any effort. Companies grow by producing goods at lower costs and selling them through competition. Collusion enables companies to have short-tem gains but hampers corporate growth and hurts consumer interests in the long run. In this era of borderless unbounded competition, collusion could bring fatal results to a nation's economic growth and development.
For private companies, market competition is a natural phenomenon. Their failure to get favorable responses form the markets prevents them from reaping profits and they can see their existence threatened. In this process, the quality of goods and services improves, the economy makes progress and disposable income rises. On the contrary, governments and state firms, with their virtual monopolies, don't need to risk bankruptcy and are prone to laziness because it's okay if more taxes are collected. With monopolistic profits, their structure is apt to swell, raising the need for constant slimming down, restructuring and privatization.
The most controversial field involving competition is education. Since the introduction of an equalization education policy in the 1970s, South Korea has deprived middle and high school students of the right to choose their schools, allocating them in blocks, except for special cases. The equalization policy had been designed to stem excessive competition but regrettably enough, public education has been crumbling. An increasing number of parents are sending their children, including even those in elementary schools, abroad to study and the proportion of private spending to total education expenses is soaring.
While it's partly true that fiercer competition in school has prompted private education to prosper and public education to collapse, more educators contend that the lack of competition between schools and teachers has left schools desolate and public education falling apart. They claim that should each school teach students English and other subjects effectively and efficiently and the competitiveness of schools revive, parents would depend less on overseas studying and private cram schools.
The latest moves to introduce the nationwide evaluation system for teachers and allow students to choose high schools will lay a groundwork for sharpening the competitiveness of public education. What's important is that schools will offer better education services so that parents won't look for private educational institutions and send their children abroad to schools that could be beyond their ability. The school-choice system should go in such a direction as to encourage each school to differentiate educations programs to meet demand from students and parents.
Competition has two faces. On the one hand, competition engineers progress. On the other, however, competition could destroy human dignity and make the very existence of society hard amid constant conflict if the winner-take-all hypothesis becomes the norm. Therefore, it will be necessary to take policy measures such as the creation of safety nets for the losers who are dropped in the process of competition, in addition to the establishment of a level playing field.
This post first appeared on An GG Ar An, please read the originial post: here