When companies compete for their customers

English Mar 8, 2021

Economy Minister Paulo Guedes, at an event, stated that:

We are 200 million fools exploited by two contractors, four banks, an oil producer, and six gas distributors. There is no surprise as to why the Brazilian people remain impoverished. There are few producers, cartelized markets, expensive prices, and, on top of that, a rain of taxes. What is left? There is little left. So, awakening the competitive forces is what we have been doing from the beginning.

And he continued:

We have not yet awakened market forces. We never awaken market forces. Brazil is a giant in chains. Brazil is a country bound on all sides.

The Minister then cited as one of his favorite books on the subject the work Prosperidade through the competition. Written by Ludwig Erhard, the book shows how, through the development of markets and stimulating competition, people achieve productivity and enrichment.

“The state must not decide who should be the victor in the market. Nor should an industrial cartel have this power. Only the consumer can have this power.
Quality and price determine the form and direction of production, and it is only on the basis of these criteria that the choice of winners has to be made.
In this sense, freedom is the right of every citizen, and it can never be abolished by anyone. "

And he continued:

“My efforts, therefore, are aimed at firmly establishing competition as the driving force of the economy, and free prices as regulators. Anyone who wants to go against these principles will be undermining the market economy and destroying the pillars that underpin our economic and social order. ”

The author of the book, Ludwig Erhard, was a German politician affiliated with the CDU and the second Chancellor of the Federal Republic of Germany from 1963 to 1966, being known for being the man responsible for Germany's economic recovery after World War II.

Privacy Laws

The online software industry has grown alarmingly fast with a "free" model where they used their visitors' data as a source of income. Much thanks to the free scenario that guaranteed competition between players in the sector. However, the mass adhesion of these services and the arrival of increasingly faster means of connection, has also resulted in concern for the privacy of consumers, which has generated a race for legislation in the sector, culminating in extremely suffocating laws such as the European GDPR.

Since coming into operation, these laws have not brought great benefits to consumers. Leaks continue to happen frequently and the large companies in the sector, already consolidated, pay negligible fines in comparison to their turnover and continue to operate. On the other hand, these same laws made it impossible for new small competitors to enter. In the end, these laws do not protect consumers, but serve as a shield for the already established bigtechs, indirectly resulting in an oligopoly.

The Rise of the Cryptomarket

There is a Bitcoin revolution, that same revolution extends to digital assets. The metaverse, the internet of value, SoV. There is no doubt that what we are experiencing in the crypto scenario is the next Internet revolution and it is just beginning. Without a doubt there will be booms and busts. Many projects will fail, and some will be worth hundreds of billions.

What has guaranteed this development is the free market. It is even difficult to try to find a scenario more free than this. And it is so clear that even lawmakers have realized that they cannot interfere in this space. In the United States, SEC commissioner Hester Peirce, one of the country's leading securities regulators, has been advocating for more "freedom" for the cryptocurrency industry. And, to the growing decentralized financial space.

Final Score

In a completely free scenario, as soon as competition from the sector increases and innovation is widely adopted, the high profits will disappear, with the end result being that it is the consumers who have gained the full benefit of the innovation. They ended up winning better products / services and paying lower prices.

If the company that made the innovation wants to continue earning an exceptional rate of profit, it will have to introduce other innovations, which will eventually generate the same results. Achieving a high rate of profit over a long period of time requires the introduction of a continuous series of innovations, with consumers getting the full benefit of all of them, from the first to the most recent ones.

Competition, in this way, stimulates creativity and innovation.

However, this competition cannot be described as wild, nor is it the antithesis of cooperation.

In a completely different way than animals in the jungle, who need to compete for a limited supply of animals, through the power of their senses and members, producers in capitalism compete for a limited amount of money that is in the hands of consumers, for which they compete. offering the best and most economical products that their minds are capable of conceiving.

Given that this competition is one that aims to create positive new and additional wealth, there are no real losers in the long run. There are only winners.

Competition between farmers and agricultural equipment manufacturers allows the hungry and the weak to eat and grow healthy; competition between pharmaceutical manufacturers allows patients to recover their health; competition between eyeglass, contact lens and hearing aid manufacturers allows many people who would otherwise not be able to see or hear now.

Those who have been closely monitoring cryptocurrencies for years have seen that they have become increasingly secure, with teams increasingly competent and transparent about their projects and ambitions. Transfer times and costs have been drastically reduced. New smart marketing techniques like airdrops have been adopted and open source has become the industry's final rule.

Although many have lost money, when we look at the bigger picture, we see that the ecosystem as a whole has benefited from the free market. Traditionally cast institutions like the older banks, hopefully, would take hundreds of years to come close to such an advance.


In order to maintain this perfect scenario, it is the duty of all of us, consumers, to become aware of the need to purchase products and services only from companies that defend this idea and summarily boycott all those that oppose and indirectly strengthen the barriers against the advancement of innovations.

The same formula that Ludwig Erhard used to rebuild the post-World War II German economy, is in application in the cryptocurrency market that we know today and portray the need to demand: the end of government protection to cartels and monopolies, the permission of competition real in all sectors of the economy, and the end of trade barriers. We must always be in defense of the free market.


Morel Hernandes

Writer passionate about politics, economics, blockchain and crypto-currencies.