What is in a name? Sometimes a lot. When an extra financial burden is imposed on business, cries go out that it will make the country or region concerned “uncompetitive”. The cries may be justified or not. Usually, the issue is a matter of opinion. These burdens may be imposed for a variety of reasons: to acquire revenue for the state; a response to union pressure; or to achieve certain policy objectives. Complaints are often justified, partially or in total.
What, then, is the case against talking about competitiveness? If a company can make a better or cheaper mousetrap than its rivals, it can be truly said to be more competitive. If a gardener offers better or similar services at a lower cost than the existing occupant, he or she can also said to be more competitive. This does not mean we should dismiss the existing gardener. We may have a sentimental attachment to a long-serving occupant, who may be induced to perform better under the competitive threat (an “ought” does not follow from an “is”, of course) but at least we know what we are talking about.
Can a country or region be “uncompetitive”? If California imposes extra financial burdens on its industries, it is becoming less competitive in relation to, say, Texas. If average cost levels in peripheral euro members rise faster than in the German heartlands, these countries may also said to be less competitive. By the same token Germany may be said to be “supercompetitive”. German citizens may like it that way. But the Mediterranean members of the euro have either to become more competitive or resign themselves to high unemployment unless the German taxpayer comes to their aid.