Any economic theory of capitalism must include some concept of competition. Through out the history of economic analysis theories of competition have served as the basis for systematising the fundamental forces at work in the capitalist economy. In particular, theories of price from the classical economists through to the present day have depended critically on the notion of factors seeking their highest reward, moving from areas of low returns to areas of high returns. Perfect competition is a particular theory of competition that arose only at the origin of neoclassical value theory in the late 19th century (Stigler, 1957). The concept of competition used by the classical economists and Marx did not require atomism of independent agents—the essential 'perfection' of perfect competition. With the develop ment of neoclassical price theory perfect competition was modified to imperfect com petition, in order to add realism to the analysis. Although imperfect competition was viewed at the time as being a significant improvement in the neoclassical theory, it did not really stand apart from perfect competition, which was seen as an ideal or 'bench mark', from which capitalist reality deviated to a greater or lesser degree as history unfolded. Many theorists, including one of the founders of imperfect competition herself, now recognise that imperfect competition has failed to rectify the fundamental weaknesses of neoclassical price theory (Robinson, 1933, preface to the 1969 edition). But some explicit remnants of imperfect competition are to be found in the indeterminacy of oligopoly theory and the cost plus or 'degree of monopoly' models of price behaviour. Another remnant of imperfect competition remains, however : the vision of capitalist development implicit in the evolution of neoclassical theory from perfect to imperfect competition. It is only under conditions of perfect competition that competition freely reigns in the neoclassical system. The development of oligopolistic markets which has occurred with the concentration of capital is, within the context of neoclassical theory, proof that capitalism has become less competitive over time. In this essay I shall argue that this perception of capitalist development, which is also espoused by many non neoclassical economists, is false, and that the neoclassical theory of price and the theory