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Thomas Sowell: Is Wal-Mart Good for America?
Capitalism Magazine ^
| December 9, 2003
| Thomas Sowell
Posted on 12/09/2003 1:51:27 PM PST by presidio9
"Is Wal-Mart Good for America?"
That is the headline on a New York Times story about the country's largest retailer. The very idea that third parties should be deciding whether a particular business is good for the whole country shows incredible chutzpa.
The people who shop at Wal-Mart can decide whether that is good for them or not. But the intelligentsia are worried about something called Wal-Mart's "market power."
Apparently this giant chain sells 30 percent of all the disposable diapers in the country and the Times reporter refers to the prospect of "Wal-Mart amassing even more market power."
Just what "power" does a sales percentage represent? Not one of the people who bought their disposable diapers at Wal-Mart was forced to do so. I can't remember ever having bought anything from Wal-Mart and there is not the slightest thing that they can do to make me.
The misleading use of words constitutes a large part of what is called anti-trust law. "Market power" is just one of those misleading terms. In anti-trust lingo, a company that sells 30 percent of the disposable diapers is said to "control" 30 percent of the market for that product. But they control nothing.
Let them jack up their prices and they will find themselves lucky to sell 3 percent of the disposable diapers. They will discover that they are just as disposable as their diapers.
Much is made of the fact that Wal-Mart has 3,000 stores in the United States and is planning to add 1,000 more. At one time, the A & P grocery chain had 15,000 stores but now they have shrunk so drastically that there are probably millions of people -- especially in the younger generation -- who don't even know that they exist.
An anti-trust lawsuit back in the 1940s claimed that A & P "controlled" a large share of the market for groceries. But they controlled nothing. As the society around them changed in the 1950s, A & P began losing millions of dollars a year, being forced to close thousands of stores and become a shadow of its former self.
Let the people who run Wal-Mart start believing the talk about how they "control" the market and, a few years down the road, people will be saying "Wal-Who?"
With Wal-Mart, as with A & P before them, the big bugaboo is that their low prices put competing stores out of business. Could anyone ever have doubted that low-cost stores win customers away from higher-cost stores?
It is one of the painful signs of the immaturity and lack of realism among the intelligentsia that many of them regard this as a "problem" to be "solved." Trade-offs have been with us ever since the late unpleasantness in the Garden of Eden.
How could industries have found all the millions of workers required to create the vast increase in output that raised American standards of living over the past hundred years, except by taking them away from the farms?
Historians have lamented the plight of the hand-loom weavers after power looms began replacing them in England. But how could the poor have been able to afford to buy adequate new clothing unless the price was brought down to their income level by mass production machinery?
Judge Robert Bork once said that somebody always gets hurt in a court room. Somebody always gets hurt in an economy that is growing. You can't keep on doing things the old way and still get the benefits of the new way.
This is not rocket science. But apparently some people just refuse to accept its logical implications. Unfortunately, some of those people are in Congress or in courtrooms practicing anti-trust law. And then there are the intelligentsia, perpetuating the mushy mindset that enables this counterproductive farce to go on.
This refusal to accept the fact that benefits have costs is especially prevalent in discussions of international trade. President Bush's ill-advised tariff on foreign steel was a classic example of trying to "save jobs" in one industry by policies which cost far more jobs in other industries making products with artificially expensive steel. Fortunately, he reversed himself.
Is it still news that there is no free lunch?
TOPICS: Business/Economy; Culture/Society; Editorial; Miscellaneous; News/Current Events; Philosophy
KEYWORDS: globalization; protectionism; thomassowell; trade; walmart
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Note to protectioninsts: Be sure to bring up Chinese "slave laborers" when responding to this article. What does Thomas Sowell know, right?
1
posted on
12/09/2003 1:51:28 PM PST
by
presidio9
To: presidio9
Thanks for posting this. Sowell is a breath of fresh air, isn't he? How I wish he'd take a more public stand...his writing is excellent, but gets to so few people.
2
posted on
12/09/2003 1:55:29 PM PST
by
Recovering_Democrat
(I'm so glad to no longer be associated with the Party of Dependence on Government!)
To: presidio9
The whole "Wal-Mart is going to take over the world" hysteria is just designed to take our minds off of the monopoly power of the Steamship barons, the Railroad Tycoons, General Motors and their Evil Twin, US Steel. Not to mention that penguin-hater, Bill Gates.
To: presidio9
The question should be "Is the New York Times Good for America?"
4
posted on
12/09/2003 2:01:05 PM PST
by
Burkeman1
("If you see ten troubles comin down the road, nine will run into the ditch before they reach you")
To: Recovering_Democrat
Sowell is the brightest critical thinker alive today.
5
posted on
12/09/2003 2:01:46 PM PST
by
presidio9
(Islam is as Islam does)
To: presidio9
Exactly.
I saw a headline on AOL over the weekend about whether or not Wal-Marts low prices were really bad. The answer is of course only for their competitors.
6
posted on
12/09/2003 2:02:05 PM PST
by
JLS
To: Flash Bazbeaux
Don't forget Standard Oil. LOL!
I long for the good old days when we worried about Standard Oil instead of OPEC!
To: Recovering_Democrat
Sowell is oxygen in the fetid swamp of political smugness.
Bravo Thomas Sowell!!!
8
posted on
12/09/2003 2:03:33 PM PST
by
WOSG
(The only thing that will defeat us is defeatism itself)
To: presidio9
Sowell ping
9
posted on
12/09/2003 2:04:20 PM PST
by
playball0
(Fortune favors the bold)
To: Burkeman1
Is the New York Times good for America?
oooh, that is great!!!
10
posted on
12/09/2003 2:04:21 PM PST
by
WOSG
(The only thing that will defeat us is defeatism itself)
To: presidio9
Sowell bump!
11
posted on
12/09/2003 2:05:08 PM PST
by
Pan_Yans Wife
("Your joy is your sorrow unmasked." --- GIBRAN)
To: presidio9
Historians have lamented the plight of the hand-loom weavers after power looms began replacing them in England. But how could the poor have been able to afford to buy adequate new clothing unless the price was brought down to their income level by mass production machinery?What is happening today is not that an efficient process is replacing an in-efficient one, it is that the already efficient process is being sent to a country where the labor and regulatory costs are a fraction of the U.S.'s.
Our Hand-Loom Weavers are being replaced by a Chinese/Indian/Philipino equivalent.
12
posted on
12/09/2003 2:05:11 PM PST
by
AreaMan
To: presidio9
>>>>>>>>Trade-offs have been with us ever since the late unpleasantness in the Garden of Eden.
Man I love that quote.
/s However, if you're a Chinese slave laborer, you'll never get the benefits of those trade-offs. They'll just import American jobs and they won't even give you one for Christmas because they're Godless Commie Heathens who thing Christmas is just another day to make slave laborers freeze in the salt mines.
That way they can sell Chinese salt at cheaper-than-fair prices and make sure that its their salt, not good, old-fashioned, hard-earned American salt that gives us all arteriosclerosis when we dump to much of it on our freedom fries.
And if you're a free traitor and you buy godless Chinese salt, you deserve arteriosclerosis. When the neighbor's husband loses his job with the salt-mining union and blows his brains all over the wall paper, it's YOUR fault, because you bought salt at Walmart. s/
Now you no longer need to read the replies you will no doubt receive to this posting.
13
posted on
12/09/2003 2:05:51 PM PST
by
.cnI redruM
(I am not going to talk about Al Gore's sense of loyalty this morning. - J. Lieberman)
To: presidio9
Oh, it's not just the slave laborers. Didn't you hear that Bill and Hillary Clinton were hiding tens of thousands of Chinesse soldiers in trailer trucks behind the Walmarts in every major city? Just as soon as the effects of the computer crashes resulting from Y2K bring us to our knees, Bill and Hillary will unleash those Chiness soldiers on the US to enslave us under the control of the UN. I also understand the Walmart made a huge profit selling SPAM and bottled watter in 1999.
To: presidio9
What does Thomas Sowell know, right?He certainly avoids discussing whether We the People or Walmart is better represented in Congress.
To: presidio9
I thought about Chinese slaves, as well. We are living well thanks to them.
On a deeper level though, regulation and taxation of business in the United States is what drove us into the use of slave labor. In the cold war, no one did business with Russia. Dealing with Communists was immoral. Today, faced with a declining standard of living thanks to government intervention in the economy, we have done away with that moral imperative.
To: presidio9
You can't keep on doing things the old way and still get the benefits of the new way.
That's the truth. I'm surprised that Mr Sowell doesn't also echo Dilbert's boss and say "Work smarter, not harder" to those that lost their jobs to a communist country, or a socialist funded airplane company.
17
posted on
12/09/2003 2:10:17 PM PST
by
lelio
To: CobaltBlue
And don't forget GE and Medtronic for the Medical industry!
To: Willie Green
He certainly avoids discussing whether We the People or Walmart is better represented in Congress. Can you name the senior Senator of Walmart?
19
posted on
12/09/2003 2:11:02 PM PST
by
presidio9
(Islam is as Islam does)
To: AreaMan
Our Hand-Loom Weavers are being replaced by a Chinese/Indian/Philipino equivalent. Good. That way our educated, productive workers can do something more beneficial to the economy.
I know it sounds counter-intuitive, but it really is good for us to export those jobs. Both sides come out ahead, us and them, in the aggregate (though some individuals are obviously harmed). Read a treatise on Ricardo's Theory of Comparative Advantage for more details.
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