First, competion is a false ideal: a golden idol. It does not guarantee prosperity or even fair reward for the industrious. Under a capitalist system, it rewards those who exploit other people or materials successfully, chiefly by buying the materials and hiring labour for less than they are worth. Capitalism does not require the capitalist to work or even to deserve his rewards, but merely to inject sufficient intial capital to generate his profits. Such capital may even be borrowed.

Competition may cause prices to fall while one business tries to drive another out of the market, because they cannot co-exist. But as soon as it does, prices will rise again. Alternatively, competitors will not compete: they will co-exist, and form a cosy little cartel which supplies the market at the highest price they can get away with. Consider medical insurers.

Competition is wasteful in that it causes duplication of effort. It also creates instability. But when the comptetion is over and the result clear, one firm or another goes out of business, the duplication ceases; but jobs are eliminated too. It is naive to say that economic growth is the inevitable result of competition, and the creation of new jobs the natural outcome. At least, in a cartel, the duplication is tolerated.

Secondly, competition is not the sole perogative of capitalism; it exists everywhere humanity does. It existed in hunter-gatherer societies, and in feudal times. It existed in Victorian laissez-faire economies, and in socialist and fascist societies too. It will exist in every other type of economy, too. If competition is all that capitalism has going for it, it has nothing to distinguish it from any of the other economic systems, and has nothing to recommend it either.

Competition is described as the incentive for production of high quality goods, and first rate services. It's amazing to see this trotted out so glibly after recent economic events. We deregulated and allowed our entrepreneurs scope to compete and to create infinite growth. We gave capitalism its head, believing competition would ensure an orderly, self-regulating market. We let corporations evolve into collosuses and corruption followed. Many examples spring to mind, but Enron might say it all just by itself. Capitalism will always fail. So far, however, it has not died.

Communism failed and died in Russia, because it wouldn't/couldn't respond to international competition, and it measured its success in inappropriate ways - mass production with scant regard to real needs. It was replaced by the old guard, now devout capitalists, not communists, and in league with the Mafia. (Think of USA in Kennedy's day.) But communism has not failed everywhere, and is not dead yet. Like capitalism, it will fail periodically, and will be revived in "new" forms.

However, I think there will be a new capitalism. It will go back to some of the old ways, concentrating on what it is good at. It will be subject to regulation of sufficient strength to demand respect and obedience, and it will also be subject to considerable state participation. This will, on balance, be a good thing, because capitalists and politicians will each keep the other under scrutiny.

It's not only the politicians you must fear, but the leaders of industry and commerce (including trade unions, if they get too powerful), and, frankly, only the politicians have the power to call the others to heel.

The sad thing is, we will quickly forget our mistakes and repeat them all over again.