important one, and it
has an important influence in checking business prosperity. Men are far
less apt to engage in an enterprise, if they cannot calculate closely on
prices and profits. But the main point, after all, is the waste which is
due to competition. It is for the interest of the public at large that
the papermakers should devote all the energies which they give to their
business to making the best quality of each grade of paper with the
least possible waste of labor and material.

Take for a third example two railway lines doing business between the
same points. We have fully pointed out the practical working of this
sort of competition in the chapter devoted to railways. It is plain that
the general effect is a fluctuation of rates between wide limits, an
enormous waste of capital and labor, and ultimately, the permanent death
of competition by the consolidation of the two lines.

In comparing now the above three cases, the most noticeable difference
in the conditions is in the _number of competing units_. There were in
the first example three million competitors; in the second, three
hundred; and in the last, but two.

The first difference in the competition which existed is in intensity.
In the case of the producers of corn, competition was so mild that its
very existence was doubted. In the case of the papermakers it was vastly
more intense, so that it caused those engaged in it to take steps to
restrict and finally abolish it. In the case of the railroads it was
still more intense, so that it was not able to survive any length of
time, but had to suffer either a temporary or permanent death very soon.
Let us state, therefore, as the first law of competition, this: _In any
given industry the intensity of competition tends to vary inversely as
the number of competing units._

We also saw that among the producers of corn there was virtually no
waste of energy from competition. Among the paper makers there was a
large waste. And in the case of the railroads, the whole capital
invested in the rival railroad, as well as the expense of operating it,
was probably a total waste. Let us state, then, for a second law of
competition: _In any given industry the waste due to competition tends
to vary directly as the intensity._ As an additional example to prove
the truth of these laws, take the competition which exists between
buyers. In the case of ordinary retail trade the number of buyers is
very great, and the