I think some of the angst over the relative meanings of competition and co-operative co-ordination might be addressed usefully by referring to Daniel Klein's recent book, Knowledge and Co-ordination, 2012, OUP, though his argument can be a trifle dense at times.

Klein defines Concatenate Co-ordination as when its elements 'find an order more pleasing or desirable according to some relevant standard", which he suggests is what economists like Simon Newcomb, Friedrich Hayek, and Ronald Coase meant by "co-ordination from the time when the term first found usage in economics in the 1880s until the 1970s" (317), whereas "mutual co-ordination builds from different perspectives of the individuals doing their activities", such as "when we drive on the same side of the road; or use the same word, such as 'apple', to refer to an object; or use the same medium of exchange" according to a situational coincidence of interest.  Mutual co-ordination came to the fore with Thomas Schelling's, The Strategy of Conflict (1960), and now dominates in economics (321).

The competitive economy works by being a concatenate co-ordination through the price mechanism (incidentally a wholly visible process - goodbye "invisible hands"!).  A state-managed economy works relative poorly by central direction through mutual co-ordination, with all its defects - mainly an impossible lack of knowledge of the billions of details compared to a competitive price economy.

Gavin Kennedy
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From: Societies for the History of Economics [[log in to unmask]] On Behalf Of Steve Kates [[log in to unmask]]
Sent: 23 November 2012 01:25
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Subject: Re: [SHOE] Fwd: question

I find Marshall picks up the ambiguity in the use of the term "competition" and notes that there is no really adequate word. He also explains that co-operation is embedded within the meaning of competition as (once) understood by economists. From I,i,4:


"§ 4. It is often said that the modern forms of industrial life are distinguished from the earlier  by being more competitive. But this account is not quite satisfactory. The strict meaning of competition seems to be the racing of one person against another, with special reference to bidding for the sale or purchase of anything. This kind of racing is no doubt both more intense and more widely extended than it used to be: but it is only a secondary, and one might almost say, an accidental consequence from the fundamental characteristics of modern industrial life.

I.I.14

"There is no one term that will express these characteristics adequately. They are, as we shall presently see, a certain independence and habit of choosing one's own course for oneself, a self-reliance; a deliberation and yet a promptness of choice and judgment, and a habit of forecasting the future and of shaping one's course with reference to distant aims. They may and often do cause people to compete with one another; but on the other hand they may tend, and just now indeed they are tending, in the direction of co-operation and combination of all kinds good and evil. But these tendencies towards collective ownership and collective action are quite different from those of earlier times, because they are the result not of custom, not of any passive drifting into association with one's neighbours, but of free choice by each individual of that line of conduct which after careful deliberation seems to him the best suited for attaining his ends, whether they are selfish or unselfish."