What Are The Advantages And Disadvantages Of Pure Competition?


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Rosie Normanton answered
One advantage of pure competition is that everyone has a chance to play the game; in other words, capitalism is rampant, and it's every person for his or herself. Businesses may sprout up at any time and then challenge the biggest conglomerates in the world. With pure competition, the government stays out of business affairs and lets them run their own course, so entrepreneurs aren't shackled by red tape, unfair taxation, and endless rules and regulations.

  • Disadvantages

One disadvantage of pure competition is that large, already established companies, such as multinationals, swim the oceans of commerce like great white sharks, gobbling up smaller companies as though they were goldfish. It's hard to compete against millions or billions of dollars in corporate clout. In fact, big companies may often go too far in their quest to destroy smaller competitors - when this occurs (as it once did with Microsoft), a conglomerate may be charged with running a monopoly. However, money talks, and multi-billion dollar corporations tend to skate off without much punishment for their white-collar crimes, as they are armed with a battalion of brilliant lawyers.

  • Pros and Cons

There is no perfect system for running commerce in a country of continent - whether a government enforces pure capitalism (pure competition), socialism, or communism, there will always be flaws in the system. In the case of communism, a look at Russia's tortured history is all that's needed to see how that sort of "sharing" concept, which supposedly erases greed and competition, can be abused and twisted.

Human beings aren't angels, so any system that denies them the chance to compete, make money, and achieve their goals is basically doomed to failure. However, socialism, which features plenty of government control over commerce, is effective in Scandinavian countries. Pure competition is a cutthroat state, in which the strong rise and the weak fall.

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