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I think we might be mixing up our micros and macros. Seems like some people will enjoy competition and outdoing each other no matter the extrinsic (or lack thereof) rewards. That's how it is now, anyway.
Competition, sure. Sports, competitive cooperation, and other methods can be had. Market competition would not exist.
I could be saying the same thing you're saying though, so correct me if I'm misunderstanding please.
I don't think we're disagreeing, but I'm thinking of like a somewhat friendly rivalry between, like, two teams of tool makers to outdo each other in design or production efficiencies. Like the kind of stuff that people get up to at work or play, naturally.
I'm no economist, but that doesn't sound like market competition to me. At least there is no driving force behind it, other than human nature, or maybe like an ad hoc competition for kudos or esteem.