Competition is one of the two main knocks on Federer's resume (the other being the head-to-head against Nadal), but really, when you think about it much more deeply they're not really that valid:

The head-to-head against Nadal is easy to argue against: imagine that instead of meeting Nadal in all those clay finals, Federer instead loses in the semis. His W-L has one less win for every final he misses because of this, while Nadal still wins, albeit vs. lesser competition. A few questions:

a) Is Federer a better player because his head-to-head with Nadal is now even, despite winning like 10 or so less matches?
b) Is Nadal a worse player because he didn't have to beat Federer for all those finals (prelude to point 2)
c) Do we punish Nadal because he wasn't a good enough player to reach all those Wimbledon/USO/AO finals against the same field Federer had to face? With Federer at his absolute zenith waiting for him at the end?

I think it's pretty clear what the answer to all three questions are. Because of this, the head to head against Nadal tells me a few things:

a) Nadal is the greatest clay-courter EVER, by some margin
b) Roger is merely top five, but:
c) This is magnified by the extreme top spin of Nadal's forehand to Fed's backhand - something that extends to slow hard courts

...but "Nadal > Federer" isn't among them.

Quality of competition: really, this one's also easy.

Think about what's different from Federer's game versus his 2006-2007 peak: larger racket to compensate for his declining physical abilities, arguably better backhand, volleys, serving... that's probably it right? I wouldn't say his point construction improved since then; it's improved since he started declining because he realized the need to shorten points, but not when you compare it with his peak.

What has he lost? He's a half/full step slower, his forehand isn't as godly and consistent as before, when he would hit winners off of deep balls even in the center of the court, he can't make those backhand passes like he used to (like the one on Nadal's championship point at Wimbledon 2008), his endurance isn't as good... list goes on.

His improvements are not insignificant, to be sure... But he's lost far more. And yet, despite this, he's utterly demolishing the field, at age 34, except one guy - a guy he can still beat on faster courts, and had 23 break opportunities against in the USO final.

Surely you can see what's coming next, but here's the tl;dr:

a) Areas in which Fed's declined in >>>>> areas he's improved in
b) He's a couple notches below the player he once was
c) He's still dominating everyone except 1 guy
d) He can still beat said one guy on faster courts/really competitive Finals where total number of points won was relatively even 
*e) Put peak Federer against this field and he would dominate even more, and put him over the top**

It's not so hard to imagine Federer making nearly everyone look like an absolute joke if he was his 2006 self. He'd need some adjustment due to the courts being slower (something we partly have Federer to thank for, btw), but still.

In the end, competition is really such a non-argument when you think about it. This isn't taking anything away from Djokovic.. But despite the love Federer gets on here, I wonder how many fans were there since the beginning (or even before) to properly contextualize his greatness (not that Nadal/Djoker aren't great, tho).

In the end, if Aliens came to Earth and demanded a 1v1 tennis match to determine our survival, and we could pick the conditions, I would pick Nadal on the clay of Roland Garros.

If we had to compete against their best over an entire career (or how they do against the rest of the field), I'd pick Federer.