Competition will steadily decline as a sufficient regulating force in many areas of the economy where it is now dominant, Carl Kaysen, director of the Institute for Advanced Studies at Princeton, said last night.

Kaysen spoke at the first of the two annual Oliver Wendall Holmes Lectures.

In the place of competition, he said, America needs to develop controlling institutions that include social and political goals along with the economic aims of stability, growth, and wealth distribution.

Market Economy

Kaysen spoke of "a class of problems, increasing in importance in terms of special attention," that a market economy will not or cannot regulate successfully. "We will tend to judge the market economy on its inability to solve these problems, rather than on its classical criterion," he said.

Kaysen cited pollution and urban redevelopment as problems of which the market does not take account.

He also pointed to the retraining and relocation of workers made obsolete by modern technology, and said that "entrepreneurs have been encouraged to ignore this problem."

The public's inability to choose between similar products, especially in the fields of prescriptive drugs and auto safety devices, Kaysen said, shows that the economy has grown outside of a simple competitive system that assumes informed consumers.

Kaysen said that he would discuss alternate institutions in his lecture to-night.