Why I love Imperfect Competition

Why Embracing Variety in the Market is Essential

In a recent statement, Donald Trump suggested that Americans are too wealthy and that his tariffs could help address this issue. He mentioned that having fewer choices and paying slightly more for goods could be beneficial in the long run:

Somebody said, ‘Oh the shelves are going to be open.’ Well, maybe the children will have two dolls instead of 30 dolls. And maybe the two dolls will cost a couple bucks more than they would normally.

This mindset is not new and has gained traction among Republicans, echoing similar sentiments expressed by Bernie Sanders in the past about Americans having too much of certain products like deodorant and shoes.

The argument for limiting choices and promoting scarcity in the market stems from the idea that perfect competition leads to optimal production efficiency. Under perfect competition, goods are identical, and prices are set at the lowest cost. However, this approach neglects the importance of consumer preferences and variety in the market.

While perfect competition may seem ideal from a cost-efficiency standpoint, it restricts individuality and personal choice. Variety in products reflects diverse consumer preferences and promotes innovation and creativity in the market.

Imperfect competition, characterized by product differentiation, allows for a range of options to cater to different tastes and needs. This type of competition may not adhere to the strict principles of perfect competition, but it fosters a more dynamic and consumer-centric market.

Embracing imperfect competition means embracing diversity and individuality. It enables consumers to express their preferences and encourages businesses to innovate and differentiate their offerings.

Rather than imposing restrictions on choice and variety, market liberalism advocates for a free and diverse market where consumers have the freedom to choose products that align with their preferences.