The Social Structure of Competition

A player brings capital to the competitive arena and walks away with profit determined by the rate of return where the capital was invested. The market production equation predicts profit: invested capital, multiplied by the going rate of return, equals the profit to be expected from the investment. You invest a million dollars. The going rate of return is 10 percent. The profit is one hundred thousand dollars. Investments create an ability to produce a competitive product. For example, capital is invested to build and operate a factory. Rate of return is an opportunity to profit from the investment. The rate of return is keyed to the social structure of the competitive arena and is the focus here. Each player…