Breaking the Chain

Harper's Magazine ^ | July 2006 | Barry C. Lynn

[A. Pole]

But what should concern us today even more is a mirror image of monopoly called "monopsony." Monopsony arises when a firm captures the ability to dictate price to its suppliers, because the suppliers have no real choice other than to deal with that buyer.

Monopsony bump

[spookadelic]

Isnt there supposed to be a barf alert on this or something?

[Uncle Miltie]

"most...economists accepted that freedom within the marketplace had to be limited, at least to some degree, by rules designed to ensure general economic and social outcomes"

False.

Economics presumes free and economically maximizing people to cause generally optimal economic and social outcomes WITHOUT rules designed to achieve that.

It is particularly the lack of rules that allows the outcomes.

Any rule-making by the author's socialist compatriots will ONLY INHIBIT OPTIMAL OUTCOMES.

[A. Pole]

Isnt there supposed to be a barf alert on this or something?

No, this is a paleocon post. Tagline is a joke.

[Uncle Miltie]

"Monopsony arises when a firm captures the ability to dictate price to its suppliers, because the suppliers have no real choice other than to deal with that buyer."

Like Medicare?

[chinche]

WE NEED (YET ANOTHER) LAW!!!!!!!!!!!!!

This is a WN(YA)L bump for those forever worried about the world forever changing is ways we cannot forever predict.

Where's old F.A. Hayek to explain things when we need him? Selma will have to do. Picture someone?

[A. Pole]

It is particularly the lack of rules that allows the outcomes.

Well said comrade. Bazaar Akbar!

[spookadelic]

This is the first time I have heard of Monopsony.

I infer from the article that Monopsony is really the study of how to pass laws against Walmart without really saying your against Walmart.

[Uncle Miltie]

New America Foundation - Board of Directors:

Eric A. Benhamou Chairman, 3Com Corporation & Palm Inc.; Chairman and CEO, Benhamou Global Ventures, LLC

James Fallows Board Chairman, New America Foundation; National Correspondent, The Atlantic Monthly

Francis Fukuyama Professor of International Political Economy, Johns Hopkins University

Ted Halstead President & CEO, New America Foundation

Noosheen Hashemi President, HAND Foundation

Laurene Powell Jobs President of the Board, College Track

Kati Marton Author & Journalist

Walter Russell Mead Henry A. Kissinger Senior Fellow for U.S. Foreign Policy, Council on Foreign Relations

Lenny Mendonca Chairmain, McKinsey Global Institute

Steven Rattner Managing Principal, Quadrangle Group, LLC

Eric Schmidt Chairman & CEO, Google, Inc.

Bernard L. Schwartz Retired Chairman & CEO, Loral Space & Communications Ltd.

Anne-Marie Slaughter Dean, Woodrow Wilson School of Public and International Affairs, Princeton University

Laura D'Andrea Tyson Dean, London Business School

Christine Todd Whitman President, Whitman Strategy Group

Daniel Yergin Chairman, Cambridge Energy Research Associates

Fareed Zakaria Editor, Newsweek International

[A. Pole]

I infer from the article that Monopsony is really the study of how to pass laws against Walmart without really saying your against Walmart.

I can say it openly.

[Uncle Miltie]

In systems where oligopolies rule unchecked by the state, competition itself is transformed from a free-for-all into a kind of private-property right, a license to the powerful to fence off entire marketplaces, there to pit supplier against supplier, community against community, and worker against worker, for their own private gain.

Like IBM?

Like GM?

Like ENRON?

Crock of SH*T alert!

[Uncle Miltie]

"Consider raw materials"

Let's not. Raw materials are virtually irrelevant in a knowledge based economy.

[Logophile]

There is an undeniable beauty to laissez-faire theory, with its promise that by struggling against one another, by grasping and elbowing and shouting and shoving, we create efficiency and satisfaction and progress for all.

This sounds like politicians, not the free market.

[GeorgefromGeorgia]

Walmart has 20% of the market. That market share is no threat to dominate the market. Is Walmart engaged in predatory business tactics. If they do, punish them. However, I didn't read anything in this article to indicate such tactics. On the contrary, Walmart has brought lower prices for consumers. Many with modest incomes have benefited tremendously.

The free market should have some limits, but this article doesn't provide any valid arguments for breaking up Walmart.
Microsoft was the last victim to be burnt on the stake by the Clinton administration. What would that have accomplished?

[Verginius Rufus]

Is this the same Barry Lind who is head of the anti-Catholic organization Americans United for Separation of Church and State?

[Mase]

And so today we find ourselves in a world dominated by immense global oligopolies that every day further limit the flexibility of our economy and our personal freedom within it.

Yeah sure, entrepreneurship has died because no one can compete with these behemoths of efficiency. I suppose that's why 80% of all millionaires in this country are first generation rich.

Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces

Is that why Altria's stock is performing so poorly? LOL!

Even in sneakers; Nike and Adidas split a 60-percent share of the global market

This can't be because they just happen to make better shoes than their competitors, could it? No. It's only because the Reagan administration and those evil conservatives who followed eviscerated the anti-trust laws that made our economy work so well during the Carter years. Never mind that I can find shoes from a half dozen other manufacturers in my local Sports Authority.

Most reports blame soaring prices of energy and raw materials, but in a truly free market Kraft could have pushed at least some of these higher costs on to the consumer.

Yeah, in a truly free market companies work to increase costs to consumers rather than reduce them by becoming more efficient.

The problem is that Wal-Mart, like other monopsonists, does not participate in the market so much as use its power to micromanage the market, carefully coordinating the actions of thousands of firms from a position above the market

Wal-Mart's logistics systems revolutionized the industry and forced suppliers to become more efficient. That's one reason consumers have more money in their pockets today and can afford to buy even more goods and services, thereby increasing their standard of living, and to invest in the markets and earn a piece of the pie. Since 1980, the number of working Americans invested in the markets has increased from 25% to almost 60%.

Like this article, I could go on and on and on....

[Mase]

Those greedy Kulaks are at it again.

[Uncle Miltie]

No. Different guy. Barry C. Lynn is this Socialist, Barry W. Lynn is the Atheist.

[jocon307]

"Selma will have to do."

LOL!