The natural effect of unfettered market competition is socialism. For a short time the innovator receives a large profit, as a reward for being first to the market. Then, as competitors adopt the innovation, competition drives these profits down to zero and the price gravitates toward the new, lower cost of production made possible by this innovation (that price including, of course, the cost of the producer’s maintenance and the amortization of her capital outlays). So in a free market, the cost savings in labor required to produce any given commodity would quickly be socialized in the form of reduced labor cost to purchase it.
Only when the state enforces artificial scarcities, artificial property rights, and barriers to competition, is it possible for a capitalist to appropriate some part of the cost savings as a permanent rent. The capitalist, under these conditions, is enabled to engage in monopoly pricing. That is, rather than being forced by competition to price her goods at the actual cost of production (including her own livelihood), she can target the price to the consumer’s ability to pay.
And we free marketers are also information communists. We want the benefits of knowledge and technique to be fully socialized. The largest single share of profit under the current model of corporate capitalism is embedded rents on the artificial scarcity of knowledge and technique.
In a society where waste and planned obsolescence were no longer subsidized, and there were no barriers to competition socializing the full benefits of technological progress, we could probably enjoy our present quality of life with a fifteen-hour work week. And in a society where the dominant mode of production was craft production with cheap, general-purpose CNC machine tools .. the division of labor and the dichotomy between mental and physical labor would be far less pronounced.
Taken together, these two outcomes of free market competition in socializing progress would result in a society resembling .. much as Marx’s vision of a communist society of abundance in which one may “do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic.”