If there is anything for which capitalism is more strongly denounced than its competition, it is its alleged lack of competition and tendencies toward monopoly. These denunciations stem in large part from a failure properly to understand the meaning of freedom of competition and of monopoly. The terms are usually understood in the light of the anarchic rather than of the rational concept of freedom.

According to the rational concept of freedom, of course, freedom means the absence of the initiation of physical force - in particular, on the part of the government. Viewed in a positive light, freedom is the freedom to do whatever one is otherwise capable of doing, unconstrained by the initiation of physical force.

Applied to the realm of competition, if a man possesses only a few thousand dollars of capital or no capital at all, freedom of competition for him does not mean the ability to enter into competition with General Motors. It does mean the ability to do whatever he is capable of doing with the few thousand dollars of capital he has (or with his abilities unaided by any capital) - without being stopped by the government. It means, for example, that if he can afford to buy a taxicab or a liquor store and judges that that is what is best for him to do, he will not be stopped from doing it by licensing laws. It means that if he is capable of working at a job and can find an employer willing to hire him, he will not be stopped from working by minimum-wage laws or by laws giving coercive powers to labor unions - in both of which cases a part of the supply of labor is forced into unemployment by wages rates being forcibly raised above the market level. And if a man (or a company) does have the capital required to compete with General Motors, and wishes to compete, freedom of competition means for him that he will not be stopped by a tariff or by antitrust laws preventing mergers and the growth of big business. It means, for example, that Toyota and Nissan will not be stopped and that if U.S. Steel, Exxon, Boeing, or IBM want to enter the automobile business, they will not be stopped.

Freedom of competition does not mean that one is automatically able to compete - that one automatically has the necessary knowledge, capital, or whatever else may be required to compete. It means only that insofar as one does have the means of competing, one will not be stopped from exercising those means by the initiation of physical force.