Economic ‘power’

“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 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 antitrust law. “Market power” is just one of those misleading terms. In antitrust 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 they are just as disposable as their diapers.

Much is made of Wal-Mart having 3,000 stores in the United States and 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 there are probably millions of people — especially in the younger generation — who don’t even know they exist.

An antitrust 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 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.” Tradeoffs 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 somebody always gets hurt in a courtroom. Somebody always gets hurt in a growing economy. You can’t keep on doing things the old way and still get the benefits of the new way.

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