2. Economic Competition

Research upon competition in economics falls under two heads: (a) the
natural history of competition, and (b) the history of theories of
competition.

a) Competition on the economic level, i.e., of struggle for
livelihood, had its origins in the market place. Sir Henry Maine, on the
basis of his study of village communities, states in effect that the
beginnings of economic behavior are first to be seen in neutral meeting
places of strangers and foes.

In order to understand what a market originally was, you must
try to picture to yourselves a territory occupied by
village-communities, self-acting and as yet autonomous, each
cultivating its arable land in the middle of its waste, and
each, I fear I must add, at perpetual war with its neighbour.
But at several points, points probably where the domains of two
or three villages converged, there appear to have been spaces
of what we should now call neutral ground. These were the
Markets. They were probably the only places at which the
members of the different primitive groups met for any purpose
except warfare, and the persons who came to them were doubtless
at first persons especially empowered to exchange the produce
and manufactures of one little village-community for those of
another. But, besides the notion of neutrality, another idea
was anciently associated with markets. This was the idea of
sharp practice and hard bargaining.

What is the real origin of the feeling that it is not
creditable to drive a hard bargain with a near relative or
friend? It can hardly be that there is any rule of morality to
forbid it. The feeling seems to me to bear the traces of the
old notion that men united in natural groups do not deal with
one another on principles of trade. The only natural group in
which men are now joined is the family; and the only bond of
union resembling that of the family is that which men create
for themselves by friendship.

The general proposition which is the basis of Political
Economy, made its first approach to truth under the only
circumstances which admitted of men meeting at arm's length,
not as members of the same group, but as strangers. Gradually
the assumption of the right to get the best price has
penetrated into the interior of these groups, but it is never