Our American economic system is based on competition.
Many years ago, Charles Schwab was the CEO of Bethlehem Steel. The production at one of the mills was way down. The mill manager was exasperated. He had even threatened to fire employees if production didn’t increase.
Schwab asked for a piece of chalk. He asked a worker how many heats his shift made that day.
“Six.”
Schwab wrote a big “6” on the floor.
When the next shift arrived, they asked what the number 6 was about.
“The big boss was in here today. He asked us how many heats we made and we told him six.”
When the day shift arrived the next morning, “6” was rubbed out and replaced with “7”.
When the night shift arrived, “7” was replaced with “10”.
Soon, the mill was turning out more work than any other mill in the plant.
“The way to get things done,” said Schwab, “is to stimulate competition. I do not mean in a sordid, money-getting way, but in the desire to excel.”
(This story was shared by Dale Carnegie in How To Win Friends & Influence People.)
Businesses help our economy improve by introducing products and services that outperform their competitors and please more customers.
Government policies like tariffs, that “protect” our economy can do our consumers (you and me) a disservice by discouraging competition. History has shown that the response of American companies to tariffs is to raise their own prices.
Big companies can also take actions to reduce competition. That’s why anti-trust laws were enacted to regulate them. Those laws aren’t consistently enforced due to the influence of oligarchies on governments.
If competition was discouraged, we would still be living by candle light at night and using horses as our main transportation. We wouldn’t enjoy the benefits of having an infinite library and infinite entertainment in the palm of our hands with smart phones without healthy competition.