A General Theory of Competition develops a ground-breaking new theory of competition - `resource-advantage theory'. Recent thinking on competition has assumed the premises, structure and implications of the theory of perfect competition. In his long-awaited book Shelby Hunt draws on economics, management, marketing and sociology to articulate resource-advantage theory. The author proceeds to illustrate how and why his theory may be used to explain and predict economic phenomena with great accuracy. This volume is extremely well-referenced, with detailed source notes.
Chapter 9: The Wealth of Nations
The Wealth of Nations
Chapter 7 focused on the nature of productivity and its impact on the wealth of nations. It asked: why are economies premised on privately owned, self-directed firms, competing among each other more productive than those premised on state-owned, state-directed firms cooperating among each other? Resource-advantage theory contributes to explaining the superior productivity of market-based economies over command economies on four grounds: (1) The evolutionary process of R-A competition motivates productivity-enhancing innovation. (2) The process of R-A competition results in prices of capital goods that tend to reflect opportunity costs and, therefore, make economic calculation efficient in allocating scarce, tangible resources. (3) The process of R-A competition results in firms in market-based economies coming to learn how efficient and ...