Saturday, January 20, 2007

Wal-Mart: The monopoly that isn't

At Professor Stephen Bainbridge's blog entry, Does what "elite professors" think matter? there's a really fine discussion of the power and place of the opinion from the ├╝ber-educated. I'd have enjoyed leaping into the fray, as my parents and most of my friends have advanced degrees, and I was raised, therefore, in ivory-tower-land. Nevertheless, I decided to stay out of it until a commenter, Buddy went off on a Chomsky-ite tangent and said, "To the extent that Wal-Mart is a monopoly it impedes the free market." I had to follow that tangent.

Precisely how is Wal-Mart a monopoly, when, even in my relatively rural district -- in flyover country -- we have within just a half-mile of the Wal-Mart, a Target, a K-Mart, a Sears, a J.C. Penney, a farm-and-tractor supply chain, a home and garden center, two book stores, a video store, and at least two dozen small family-operated businesses, all marketing similar items to those at the eeeeevil monopoly, and they have all been doing well for at least the decade the Wal-Mart has been there? That's a funny-looking monopoly, in my eyes. Of course, if you are willing to use Chomsky's methods to redefine words to suit your immediate want, then, perhaps he has a point. But no.

Yeah, the Mart of Wals is a big-a** discount department store. No, it's no monopoly, and there is very little likelihood it will become one, any time soon.

Wal-Mart has not impeded free market, even out here in the middle of nowhere. Rather, it has allowed (perhaps forced, in a few cases) us to diversify, to find options other than the standard mass-produced uniform products. In that regard, our small-ish towns have been thrust into building newly established, unique communities along the old brick byways. If you can't compete, you drop out of that race and find another niche. We now have a whole lot of fairly successful small businesses doing things which, a decade ago, we'd have had to drive to Chicago, Saint Louis, or some other point distant to get done. They're right here in our back yard. That's progress.

The communities which have suffered are those which have not allowed for lower-priced merchandise for the working classes. If I earn a paycheck every week and have no place convenient at which to buy affordable clothes, shoes, toys for my kids, and so on, I'm going to look for a job closer to an affordable neighborhood. Thus, by barring discount shopping, the town is sending the labor pool shopping in other markets, often even forcing them to move out of the region entirely. While that may look good on paper (hey, you don't have those nasty redneck blue-collar workers living next door with their cars on blocks and their washers on the porch, so your property values might go up), they also wind up losing the region some sales, property, & income taxes.

And, as bonus for the first-time homebuyer, the more people leave the community, the more houses sit empty and banks foreclose so we can buy for cheaper. On the downside, your personal tax burden may increase, then, as well, with fewer contributors to hold up the community infrastructure. Imagine living in a town where your monthly water bill for a single-person occupied home is $60, when a friend in a town 30 miles away pays $18 for roughly the same amount of water, because the bigger businesses pay a bigger percentage. Hey -- it has happened.

Funny thing: that cruel, thoughtless, "screw-the-little-guy monopoly", the Mart of Wals has been good for us, in a lot of ways.


Thistle said...

I'm using this as a reference in my paper, hope you don't mind. There doesn't seem to be much on the internet in support of Wal-Mart

leucanthemum b said...

Be my guest. I hope you get a better grade than I used to earn... ;-)

Anonymous said...

Maybe not in your town but we're not just talking about your town, we are talking about Walmarts grasp on the grociery market throughout America. Walmart is very close to becoming a monopoly by definition.
When one business or company dominates its area and squeezes out all its competition, the result is the consumer does not have a free choice, and inevitably the price of it’s products or services will increase, and the ‘Monopoly’ increases it’s profit. Although, sometimes prices stay low to discourage anyone from entering the market, profit still does occur. Not to be confused with a puremonopoly, where a company has control over the entire market for a product because of barriers to entry, a monopoly doesn’t exist with complete control.
However, a monopoly is a philosophical process of direct competition leading to a puremonopoly, it is not in itself a purely dominating force. It is rather, the process of obtaining competitive grounds for a strive toward total control.