Summary And Conclusions
This report has been about the importance of free competition, and its relationship to globalization and free financial markets, as well as the role of the EU in limiting and promoting competition. As was demonstrated in the first chapter, there is a clear cut theoretical case for free competition as it will both bring the benefits of increased competitive pressure and increased production efficiency. This stands in contrast to anti-trust laws where any benefits from increased competitive pressure will come at the expense of and be counteracted by lower production efficiency. In the second chapter it was demonstrated that globalization implies an extension of the principle of free competition and that it will therefore imply higher production efficiency and/or higher competition, which will boost the economy. In the second chapter, various arguments against globalization was analyzed and refuted. It was shown that while subsidies will always hurt those who pay for it, the gains for those who receive it will are more dubious as it will make them less willing to improve their ways. It was further shown that arguments for subsidizing certain activities because of the benefits they will bring to others overlook how such subsidies will require taxes that will harm other activities beneficial to others. The argument for subsidizing crisis prone companies was refuted by pointing to how while such subsidies may limit the short-term pain, they will stop the necessary restructuring which will boost future growth and increase the risk of similar problems in the future.
The chapter on the EU pointed to how the EU in many cases, most notably regional policy, farm policy and trade policy acts to limit competition and globalization and therefore hurts the economy. EU has on the other hand acted to remove various national barriers to competition, including trade barriers within the EU and corporate subsidies and monopolies. The chapter also contained a lengthy case as to why the introduction of the euro is important in increasing competitive pressure and growth within the EU.
The chapter on the importance of free financial markets explains the role of various forms of financial markets in promoting competition and economic growth, something which needs to be