Articles by 陈立才

Qualitative Change: The New Replaces the Old, the High Replaces the Low, the Strong Replaces the Weak

A philosophical question: Why do enterprises exist? Nobel laureate Coase answered in 'The Nature of the Firm': 'Enterprises exist because they reduce social transaction costs.' Enterprises thrive on high efficiency and perish on low efficiency. With the same product/service, the enterprise that can deliver it to customers at a lower price wins in market competition; at the same price, the one offering better quality wins. To survive and develop, operators relentlessly pursue higher efficiency and lower costs, reorganizing production factors so that more efficient new combinations replace less efficient old ones. This is the law of competitive survival: the new replaces the old, the high replaces the low, and the strong replaces the weak.