Lately, you can hardly glance at a business page without seeing somebody--liberal or "conservative"--whining about Wal-Mart and all its supposed "power." Why, they control the market and are destroying the little guy! They are wielding their incredible power to destroy free choice in America!
Nonsense, says Sowell:
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.One suspects that those who relentlessly sing the praises of small, independent, Mom & Pop stores do everything but actually shop there. When it comes down to it, they like cheap prices and wide selection just as much as the rest of us do.
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.
The answer to the "problem" is not to artificially prop up Mom & Pop stores, or to punish bigger, more efficient operations--it's for Mom & Pop to find something more efficient and productive to do for a living.
In no area is the silly sentimentalism of the Mom & Pop mentality more pervasive than in the propagation of the one enduring myth of Americana: the family farm. When I'm more expensive than anybody wants to pay for me, I'll be unemployed. But when food produced by Mr. Farmer becomes more expensive than anybody wants to pay for it, Willie Nelson holds a benefit concert for him. Explain that to me.
Am I insensitive? No, just realistic--and in favor of progress and economic growth. So is Sowell:
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?Though our modern-day welfare state will keep trying.
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.