Perfect competition only exists on a drawing board. It's useful because it closely enough mirrors the real world that it often produces the same effects as semi-perfect competition, but it often fails when looking at labor issues. I think that's probably why labor economists tend to have many radical beliefs.
Most big companies got where they are by doing one or two things really well. Google designed a really popular search engine. Starbucks created a streamlined system for selling gourmet style coffee. They aren't going to lose to Microsoft Bing or Costa Coffee just because one company has a slightly better HR manager. This leaves a lot of room for errors to creep into businesses that are very hard to remove. The nature of the market can change faster than the market can resolve these issues. |
