Sunday, September 27, 2009

Free market (5) - Cooperation, not competition

We are used to a competitive environment. All suppliers compete hard against each other to get business and expand their market share. Sometimes, the competition is so intense that they try to put their competitors out of business.

It is possible to work in a cooperative environment. Each business serves different groups of customers. They may charge the same price for the service, or it may be differentiated to some extent. Some customers do not mind paying a higher price to get better service or to be served more quickly.

In a market place, there can be several stalls selling similar products. In many places, the stall holders cooperate with each other. If one stall is not able to provide the goods needed by a customer, they will get the goods from a nearby stall and sell it to the customer. Maybe, the two stalls will share the profit margin. This is cooperation.

If we extend the concept of cooperation to neighboring countries, we will get more goodwill and friendship between the people of the countries, as they will benefit together. If one country feels that another country is taking a larger share of the profit, there will be dislike and distrust.

Under a cooperative environment, all parties will survive and progress together. Any opportunity is shared fairly among all the parties. It creates goodwill and friendship. Even if some business fail, they will not blame it on their competitors but on their inability to attract the customers.

We need the educate people on the principles for a cooperative environment.

Tan Kin Lian

2 comments:

hongjun said...

In economics, if there is no competition, there won't be much progress.

Tan Kin Lian said...

Progress can be achieved through cooperation as well, and through other means, such as research and development.

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