there is free competition, _i.e._ free competition in productive
enterprise, employers commonly pay their laborers as high a wage as
they feel is justified under the particular circumstances, lest their
workmen abandon them for rival employers. Under similar conditions,
laborers will generally endeavor to render the best possible service,
so that the employer will prefer them to other laborers. This assumes,
of course, that competition is effective, _i.e.,_ that there is
neither an oversupply or an undersupply of either employers or
employees.

Where, again, there is free competition in productive enterprise, the
price of commodities produced by a given concern cannot rise too far,
for consumers will either buy those commodities of rival producers, or
will use substitutes. If, on the other hand, prices drop so low that
producers make little or no profits, they will withdraw from business.

Free and effective competition thus means rivalry in satisfying wants,
that rivalry being engaged in for the sake of private gain.
Competition tends to harmonize the interests of the individual with
the interests of the community, by making the success of the
individual depend primarily upon what he accomplishes for his fellows.

97. VALUE UNDER CONDITIONS OF FREE COMPETITION.--In a competitive
market, as we have seen, value depends upon scarcity and utility. No
one will ordinarily pay for a commodity unless it will satisfy his
wants, i.e. unless it has utility. But even though a commodity has
utility, no one will ordinarily pay for it unless it is so scarce that
he cannot get as much of it as he wishes without paying for it. Air,
for example, has great utility, but it is so abundant that it can
ordinarily be secured without payment. Hence it has no value.