Competition and Monopoly in Classical Economics in Contrast to Neoclassical Economics

The founders of the discipline did not reason about competition within an intellectual matrix comparable to that which dominates the mind grounded in neoclassical method. The classicists saw the market as an incessant discovery process by which consumer preferences and the least-cost methods of satisfying those preferences were revealed. The entrepreneur was indispensable to this process, for he possessed a comparative advantage in gathering and weighing dispersed and often conflicting signals. That is, the entrepreneur existed because judgments had to be made, as contrasted with the neoclassical vision, in which the only acceptable behaviour of firms is to mechanically reallocate capital in response to a new set of perfect-information emissions—provided like manna from heaven, indiscriminately and simultaneously—to the roboticked helmsmen of each firm. In classical economics, to summarize, competition was the process of action and reaction by which firms learned what to produce and how to produce; the relative absence of these adaptive forces was associated with the complacency induced by the privilege of monopoly. 

—Frank M. Machovec, Perfect Competition and the Transformation of Economics, Foundations of the Market Economy (London: Taylor and Francis e-Library, 2003), 15-16.