Excessive compensations by their very nature arouse covetousness.

Frédéric Bastiat
Economic Harmonies

In this third part, Frédéric Bastiat looks into the particular case of innovation. Indeed, it allows the inventor of a new process to benefit fully from his competitive advantage during a certain amount of time. This advantage that places him in a position of monopoly allows to generate a “superprofit” (which is the reason why capitalist countries are more innovative that socialist countries – self-interest favours innovation) but as is mentioned in today’s quote, this “superprofit”  bears the seeds of its own end. 

Covetousness is aroused that will allow the competition to eliminate the surprofit in the end (be it through copying the process and reduce the market price or in finding a competing substitute).

Other quotes from Competition:
Introduction – Part 1 – Part 2 – Part 3 – Part 4 – Part 5 – Part 6 – Conclusion

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