Alchian Analytics

In every society, conflicts of interest among the members of that society must be resolved. The process by which that resolution (not elimination!) occurs is known as competition. Since, by definition, there is no way to eliminate competition, the relevant question is what kind of competition shall be used in the resolution of the conflicts of interest. In more dramatic words designed to arouse emotional interest, «What forms of discrimination among the members of that society shall be employed in deciding to what extent each person is able to achieve various levels of his goals? Discrimination, competition, and scarcity are three inseparable concepts.

Economists are, I think, too prone to examine exchange as a coope- rative act whereby the buyer and seller each act in an effort to reach a more desired position. Yet I find it more interesting (now that I understand the cooperative aspect of exchange) to examine the compe- titive, or property aspect of exhange. The act of exchange is a means whereby the buyer is able to compete against other claimants for the goods being obtained from the seller. The kinds of offers, forms of competition and behavior that the members of society can employ in an endeavour to get more of the goods that would otherwise go to other people, is brought more into the focus of attention. More directly, the forms and kinds of property rights sanctioned in a society define or identify the kinds of competition, discrimination or behavior characteristic of that society.

From his Some Economics of Property Rights.