2. Why is competition essential to capitalism? Why might capitalists seek to establish monopolies? What is imperialism? Is the U.S. an empire, and imperialistic power, militaristic, or hegemonic?
Competition is what drives innovation. Without competition, producers will not be incentivized to innovate beyond what they've already produced. With competition, companies are forced to experiment with new ideas and technologies to gain an advantage. This can lead to the creation of new products, services, and business models that might not have been developed otherwise. Also, competition leads to lower prices, and tighter margins for companies. As a result, this forces companies to constantly seek ways to improve their efficiency and reduce costs. This can lead to the development of new manufacturing techniques, supply chain management systems, etc.
Being a monopoly in any given sector allows a company to dominant its sector by having greater control of the market. Depending on the sector, by becoming a monopoly, you get to control major resource necessary to produce a product (as was the case in the pre-World War II aluminum industry). It gives the company technological capabilities that allow a single firm to produce at reasonable prices all the output of a particular commodity or service (think of Google or Microsoft buying out smaller companies to reduce competition or remain ahead of the curve). Finally, this position allows for exclusive control over a patent on a product or on the processes used to produce the product.
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