Текст для экономистов

     Competition and Productivity 

     Making these adjustments as the prices for a firms' inputs change is an important part of what it means to produce efficiently, and to compete with other firms making similar products. Companies that don't hold their production costs down may try to charge a higher price for their products; but that just won't work if other firms can make the same quality products at a lower cost, and sell them at a lower price.

     Consumers benefit from this competition among firms because they get better products at lower prices. And if most goods and services they buy are made in markets characterized by a high degree of competition, their budgets will go further and allow them to buy more products with the income they receive.

Even in competitive markets, however, not all firms will choose to use exactly the same materials or production methods. In many cases, that will reflect the different kinds of bicycles or other products they choose to make. For example, firms making a very basic bike for young children to ride, or for adults who use the bikes as daily transportation to and from work, will very likely want to make a large number of identical bicycles, and put them together using standardized materials and assembly line methods that                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      keep production costs and prices very low. On the other hand, companies specializing in customized racing bikes are likely to use more labor, special design tools and more expensive metals, but use fewer stamping machines and assembly lines making identical parts. Not surprisingly, prices for the customized bikes will usually be higher than prices for the bikes that are mass produced in large factories.

     Ideally, of course, everyone would like to have all of the things they buy face sharp competition — thereby holding those prices down — but face little or no competition from others in what they do to earn their own income — so that their wages will remain high. More generally, everyone seems to favor the idea of high wages and low production costs (including labor costs, which are most firms' largest expense), because that seems to imply that everyone will be able to afford to buy more goods and services. But no economic system can provide high wages and low prices at the same time, because workers' wages represent a company's labor cost in making and selling the goods and services it produces. In other words, as long as other costs and demand remain unchanged, raising everyone's wages simply raises production costs and product prices.

     Over time, however, there are ways for workers and firms to resolve this dilemma — that is, to earn higher wages and profits without driving up the prices consumers pay for products, and thereby risk losing their jobs or sales to competitors. The answer is to increase productivity, the level of output that an industry or company achieves from each worker or each unit of input into its products and services. To increase productivity, workers and firms must develop new products for the marketplace, or produce goods and services more efficiently than the competition, at a lower cost or with better quality. In short, their products must be newer, better or cheaper.

     Higher production levels justify higher wages and living standards. Higher productivity means higher output per worker, which translates into greater prosperity that can be shared through higher wages and a better standard of living. Cutting costs and working more efficiently are ways of increasing productivity; but in modern technology-based economies, research and innovation are critical to the sustained productivity and growth of a nation's and the world's economy. Advances in computers, telecommunications and biogenetics are the result of scientific research, experimentation and testing. These advances occur continuously in market economies as companies seek to develop new products and services, or to produce existing ones more efficiently. The result: new jobs, expanding opportunity and greater prosperity for all. This, too, is the same way all workers and businesses in a country can improve their competitive position in the world economy, to raise the material living standards in their nation over time.

     International trade can make an important contribution to productivity and prosperity as well. Think for a moment of Robert and Maria shopping for oranges. Robert is a machinist, skilled and experienced in w^rhat he does. Suppose that instead of working full-time as a machinist, Robert had to devote some of his time to growing oranges — and the orchard owner, who has grown oranges and other tree crops for years, had to spend time making machine tools. Neither would be as productive and efficient in his secondary job as in his primary work. The result would be predictable: fewer oranges and lower-quality machine tools for everyone. Just as two people are both made better off when they buy and sell from each other and specialize in the production of the things they do best and most efficiently, so too are regions and nations better off when they can specialize and trade freely with each other. When nations trade in the goods and services they make well and at low cost, the benefits accrue to the people in all the countries involved.

     The most popular arguments calling for policies that limit free trade — usually taxes on imported goods or limits on their amounts — claim that protecting jobs in some industries is good for a country because the workers and owners in those industries will earn higher wages and profits, and spend most of that money in their own country. This claim has an element of truth, but it is only part of the story. Protecting some producers and workers also means that prices for the goods and services they make will be higher. This is bad news for consumers, for other producers who use those products as inputs, and for firms that find their sales falling because some of their customers paid more for the protected products.