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The problem is that this efficiency comes from being a huge corporation with a tight hold on the market. Not an outright monopoly, but with the ability to bleed

The problem is that this efficiency comes from being a huge corporation with a tight hold on the market. Not an outright monopoly, but with the ability to bleed money in some areas to outcompete smaller stores and the ability to negotiate big contracts by virtue of sheer clout in the market. Walmart is so big that it utterly dominates the market, to the detriment of everyone else. But because they're able to sell everything at the lowest price, people go there. It's impossible to compete with Walmart. It's a clear example of why the invisible hand of the free market is a dangerous myth.

Natsu 6y ago
How is Wal-Mart a monopoly? I can't name any single good there which can't be gotten elsewhere and they have plenty of competitors for any given product line. There are dozens of other places I can get clothes, groceries, sporting goods, tools, etc. You say it's impossible, but does Target no longer exist? They directly compete with pretty much everything Wal-Mart does and many other businesses compete with them on specific product lines. Economy of scale is not at all the same as monopoly power and conflating the two only makes your point more confused. Finally, the "invisible hand" is really just a survival of the fittest type effect. It's every bit as random and imperfect as that is in nature, but the effects are no less real, or we'd all be peasants living at 1800s level standards instead of typing to each other on a globe-spanning computer network. If anything, I'd say that Socialism is the dangerous myth. Always promising utopia, as if you can create a utopia with unconstrained mass murder from a Socialist revolution. If we were the right kind of people to live in that utopia, we'd be sharing our stuff willingly right now, not seeing talk of guillotines and forcibly taking stuff, as can be observed in this very story. The proper way to get closer to that would be to encourage people to share and be generous. As the song says, first it was a tragedy, now it's a farce: https://www.youtube.com/watch?v=QwqnRYPcrl0 https://www.youtube.com/watch?v=QwqnRYPcrl0
- KozmoNau7 6y ago
  Walmart has a history of building stores in areas where local stores already exist, letting them bleed money while they outcompete everyone with their lower prices, dominating the local area and driving other stores out of business. They can afford to this due to their enormous size and domination of their suppliers, which means they can sell their wares at lower prices than anyone else. They can afford to bleed money for as long as they have to, in order to win in an area. That is almost the textbook definition of a local monopoly, facilitated by sheer size and entrenched market position on a larger scale. They are so large that they can have everything in all of their stores, they don't have to worry too much about certain items not being profitable in certain areas, because they're big enough to carry everything everywhere, unlike smaller local stores, who cannot afford the space nor the losses. Walmart banks hard on the convenience of everything being available in the same store, which is something they can only do because of their sheer clout and economies of scale that only work for really big powerful companies. The end effect is that Walmat (and other similarly huge chains) drive smaller businesses out of the market, because a free market always rewards those who dominate others, and rewards domination by affording even better tools and methods for dominating competitors. It's a surefire way to make sure the market is owned and run by just a small handful of very large and powerful entities. A truly free market is one that is sensibly regulated, in order to foster competition and prevent monopolies from taking over, according to Adam Smith, not one that is completely unregulated, as many free market proponents seem to argue for.
  - Natsu 6y ago
    > Walmart has a history of building stores in areas where local stores already exist, letting them bleed money while they outcompete everyone with their lower prices, dominating the local area and driving other stores out of business. So it's not a monopoly at all, they just offer things at cheaper prices and drive more expensive businesses out of business, while many reasonably efficient competitors still exist.
    - KozmoNau7 6y ago
      Walmart leverages their dominance over the supply chain and their position as a huge chain with locations all over the country, to outcompete local competitors who do not have the same benefits to draw upon. As a consequence of this, local businesses die, jobs are lost and people either have to move away or accept Walmart jobs with well-documented bad pay and bad working conditions. All of this is a deliberate business strategy by Walmart, because the US political climate and "business-friendly" ideology from both major parties prioritizes giant corporations with enormous lobbying power, over small business owners. As a further local effect, business life is driven from the city centers to outside the cities, causing fewer people from the suburbs to go into the city centers, leading to urban neglect and decay.
      - Natsu 6y ago
        That's competition. Monopoly is when you don't have real competitors. And yet somehow they compete vs. Amazon, Target and a thousand other stores. They don't have control over the supply of any particular good, it's not like an ISP where they have covenants with local governments that limit competition, they're not Standard Oil. They're not even at the level of Microsoft, because there's not much they can do to exclude competition. But I guess some people have tried this tact, before. Here's an article which discusses many of the points you've made and explains why they don't make sense: https://truthonthemarket.com/2006/07/10/the-unconvincing-antitrust-case-against-wal-mart/ https://truthonthemarket.com/2006/07/10/the-unconvincing-ant...
        6y ago

Natsu 6y ago

How is Wal-Mart a monopoly? I can't name any single good there which can't be gotten elsewhere and they have plenty of competitors for any given product line. There are dozens of other places I can get clothes, groceries, sporting goods, tools, etc. You say it's impossible, but does Target no longer exist? They directly compete with pretty much everything Wal-Mart does and many other businesses compete with them on specific product lines. Economy of scale is not at all the same as monopoly power and conflating the two only makes your point more confused. Finally, the "invisible hand" is really just a survival of the fittest type effect. It's every bit as random and imperfect as that is in nature, but the effects are no less real, or we'd all be peasants living at 1800s level standards instead of typing to each other on a globe-spanning computer network. If anything, I'd say that Socialism is the dangerous myth. Always promising utopia, as if you can create a utopia with unconstrained mass murder from a Socialist revolution. If we were the right kind of people to live in that utopia, we'd be sharing our stuff willingly right now, not seeing talk of guillotines and forcibly taking stuff, as can be observed in this very story. The proper way to get closer to that would be to encourage people to share and be generous. As the song says, first it was a tragedy, now it's a farce: https://www.youtube.com/watch?v=QwqnRYPcrl0 https://www.youtube.com/watch?v=QwqnRYPcrl0

KozmoNau7 6y ago
Walmart has a history of building stores in areas where local stores already exist, letting them bleed money while they outcompete everyone with their lower prices, dominating the local area and driving other stores out of business. They can afford to this due to their enormous size and domination of their suppliers, which means they can sell their wares at lower prices than anyone else. They can afford to bleed money for as long as they have to, in order to win in an area. That is almost the textbook definition of a local monopoly, facilitated by sheer size and entrenched market position on a larger scale. They are so large that they can have everything in all of their stores, they don't have to worry too much about certain items not being profitable in certain areas, because they're big enough to carry everything everywhere, unlike smaller local stores, who cannot afford the space nor the losses. Walmart banks hard on the convenience of everything being available in the same store, which is something they can only do because of their sheer clout and economies of scale that only work for really big powerful companies. The end effect is that Walmat (and other similarly huge chains) drive smaller businesses out of the market, because a free market always rewards those who dominate others, and rewards domination by affording even better tools and methods for dominating competitors. It's a surefire way to make sure the market is owned and run by just a small handful of very large and powerful entities. A truly free market is one that is sensibly regulated, in order to foster competition and prevent monopolies from taking over, according to Adam Smith, not one that is completely unregulated, as many free market proponents seem to argue for.
- Natsu 6y ago
  > Walmart has a history of building stores in areas where local stores already exist, letting them bleed money while they outcompete everyone with their lower prices, dominating the local area and driving other stores out of business. So it's not a monopoly at all, they just offer things at cheaper prices and drive more expensive businesses out of business, while many reasonably efficient competitors still exist.
  - KozmoNau7 6y ago
    Walmart leverages their dominance over the supply chain and their position as a huge chain with locations all over the country, to outcompete local competitors who do not have the same benefits to draw upon. As a consequence of this, local businesses die, jobs are lost and people either have to move away or accept Walmart jobs with well-documented bad pay and bad working conditions. All of this is a deliberate business strategy by Walmart, because the US political climate and "business-friendly" ideology from both major parties prioritizes giant corporations with enormous lobbying power, over small business owners. As a further local effect, business life is driven from the city centers to outside the cities, causing fewer people from the suburbs to go into the city centers, leading to urban neglect and decay.
    - Natsu 6y ago
      That's competition. Monopoly is when you don't have real competitors. And yet somehow they compete vs. Amazon, Target and a thousand other stores. They don't have control over the supply of any particular good, it's not like an ISP where they have covenants with local governments that limit competition, they're not Standard Oil. They're not even at the level of Microsoft, because there's not much they can do to exclude competition. But I guess some people have tried this tact, before. Here's an article which discusses many of the points you've made and explains why they don't make sense: https://truthonthemarket.com/2006/07/10/the-unconvincing-antitrust-case-against-wal-mart/ https://truthonthemarket.com/2006/07/10/the-unconvincing-ant...
      - 6y ago