Despite my previous vow of silence on this issue (debating demand-side fundamentalists is pointless), I could not resist to ask - who has even provided an even shred of evidence that competition alone (rather than competitive pressure in an otherwise structured environment, as Perelman aptly argues) produce any of the benefits attributed to it? Proving effects that can be attributed to competition as opposed to other factors, say, hyper-exploitation of foreign labour saturation of the market with cheap foreign goods, requires analytic separation of emprically observed effects, a standard empricial science procedure that seems incomprehensible to an orthodox economist pea-brain.
On the other hand, Perelman's theseis can be documented by a comparative study of economic transition (form close shops to more market oriented) juxtaposing countries introducing gradual reform (e.g. Taiwan in the late 1950s) that still protects domestic industries to those taking the "shock therapy" approach - where national economies were devastated by cut-throat competition.
But since the learned philistines of the orthodox economic creed seem incapable of comparisons other than crude historical metaphors (thank you, Leon Trotsky) - they eagerly pronounce the relationship hypothesized by their "theory" but not empirically proven as the "ultimate truth" while any challenge to that received 'wisdom" lack sufficient documentation. They are just like any other sexist or racist shmuck - white males' have skills and leadership unless proved otherwise, women and people of color otoh - do not, unless proved otherwise.
wojtek
PS. here is an economist joke. A tourist who ventured to the land of canibals noticed a row of bowls on a vendor's display. "What's in those bowls?" he asked. "Human brains" replied the merchant. The tourist looked in horror at the bowls, but then he noticed that one bowl is priced several times of the all remaining bowls. "Why is this one bowl so expensive?" he queried. "Because it contains brains of economists" - explained the merchant. "Why are their brains so valuable to you" wondered the nonplussed tourist, "because they are so smart?" "Nah" shrugged the merchant "do you know how many of them I have to catch to fill that bowl?"
It is the supply-side, stupid!