The Discuss Of The Effective Competition Theory And The Construction Of Its Foundational Rack

The economic condition is changing, totally different from that of the time when Clark put forward the concept of "the efficient competition"sixty years ago. The trend of globalization and the rapid development of science & technology not only make the market from one county to the whole world, but also make it possible to provide the replaceable product and competition. So, the theory of the effective competition should be modified with the economic condition. In the different phase of market economy, the emphases of the economic competition will change accordingly. The theory of the effective competition should be studied in the rack of new economic environments and close to the times. So we study the theory itself and its policy advices under the condition of globalization and the rapid development of science & technology. The dialectic method, long-term & short-term analyzing method, the dynamic method and the institutional method are used to analyze the theory of the effective competition. With the guide of the above method, we will draw new conclusion and comprehend the theory intensively. The monopoly from the scope economy and the competition from the market structure the two sides of the effective competition. For a long period of time, the monopoly is regarded as the damage to the free competition and the market economy. Actually, if we analyze monopoly dynamically, we will find out that it has beneficial function as well. We should make it clear that monopoly is neither active nor negative. The relation of monopoly and competition is a pair of contradiction. The competition will be changed into monopoly with its development to some degree. The competition comprises the sprout of monopoly inside. The monopoly comes from free competition and governmental control, which promote to compete drastically one side, and interrupt competition on the other hand. In the market economy, the competition is absolute, but the monopoly is relative. For the short-term, the monopoly works as a backward resistance to the effective competition. But for the long-term, it is just one part of the competition course, as a forward push to the effective competition. On the base of the re-understanding to the monopoly and the analysis of the relation between monopoly and competition, the effective competition shows the following characters: It is a kind of long-term and dynamic competition. It has the trait of uncertainty. It is the combination of efficiency and effect. It is the second-best choice, not the best one. It is under the control of institutional restriction and prompting. The effective competition is a structure to maintain the competition and take the usage of the scale economy as well. At present, the industry organization policy is the main means to harmonize the two. The policy aims at promoting the effective competition. How to assure the policy feasible, effective and stable? We cannot understand the policy itself only. We also should analyze the deep level, and that is institution level. It is the final aim to set a kind of industry organization policy to promote the effective competition. For the long run, what we need is a set of perfect foundation, which plant the effective competition and the policy. The foundation is just the institutional arrange, including external institution (hard restriction) and internal institution (soft restriction). The governmental regulation is a kind of external institution, and the market order is a kind of internal institution. They work together to promote the effective competition. We will grasp the institution as a main line, analyze the effective competition under the rack of governmental regulation and market order. According the above ideas, the sequence to understand and analyze the theory will be changed from micro-view to macro-view. As we know, the economists from developed country analyze the theory under the certain premise, which is the market economy has developed for hundreds years and the market ideas have been deeply inside the people. They think the relative perfect market existing as the precondition. But for the developing countries, they are in the time of transform to the market economy and their market is incomplete. So in these countries, how to construct the foundational rack of the effective competition should be considered first. The foundational rack is built from the relative macro-point of view, which is the combination of the market spontaneous order and the governmental regulation. The faultiness of the market spontaneous order requires the government to guide and regulate. Also, the governmental reasonable regulation roots in the requirement of the market spontaneous order.