BREAK UP WAL MART
First, a few definitions (from dictionary.com), and a bio of the author of the article I read....
Monopoly
A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition - which often results in high prices and inferior products.
For a strict academic definition, a monopoly is a market containing a single firm.
Monopsony
A market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down. Sometimes referred to as the buyer's monopoly.
About the author:
http://www.newamerica.net/index.cfm?pg=Bio&contactID=430
For many of you, hearing me rant about Wal-Mart is nothing new. Yup, there goes Ol' Hal again, thinking about Wal-Mart taking over the world. Well, you're right, I do rant, and I do think they are attempting to take over control of the global economy, and if you read the same article I read in Harpers yesterday, maybe you'll see why.
The article makes the following points:
1. For the last 25 years, the United States has relaxed enforcement of anti-trust laws.
2. Both the Clinton and the Bush administrations have 'overlooked' the growing might of Wal-Mart's monopsony.
3. Wal-Mart's might has allowed them to determine not only what they will pay for an item to be sold at their stores, but also to micromanage the vendors that are selling to them. One example of this is Coca-Cola. According to the article, Coca-Cola planned to use a new type of sweetener in its diet cola. Wal-Mart said it would not approve of such an ingredient being used, so Coca-Cola designed a second product, yielding to Wal-Mart's pressure. In a second example, Kraft foods has plans to close 39 plants and let go 13,500 workers in order to eliminate one quarter of its product line. This is due to increased cost of manufacture of their products and an inability of Kraft to pass the increased cost on to the purchaser. Wal-Mart demanded that Kraft lower the cost for its products even further. As the article puts it 'Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces'
4. Wal-Mart already dominates our economy. One out of every five retail sales transactions in the US is done at a Wal-Mart cash register. Its revenue is is almost equal to that of the next six largest retailers combined.
5. The article suggests that the best way to reduce Wal-Marts power over our economy is to start enforcing anti-trust laws again and break Wal-Mart into pieces the same way we broke up AT&T and Standard Oil.
I wholeheartedly agree and recommend you pick up this month's Harpers or find the article online.
Monopoly
A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition - which often results in high prices and inferior products.
For a strict academic definition, a monopoly is a market containing a single firm.
Monopsony
A market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down. Sometimes referred to as the buyer's monopoly.
About the author:
http://www.newamerica.net/index.cfm?pg=Bio&contactID=430
For many of you, hearing me rant about Wal-Mart is nothing new. Yup, there goes Ol' Hal again, thinking about Wal-Mart taking over the world. Well, you're right, I do rant, and I do think they are attempting to take over control of the global economy, and if you read the same article I read in Harpers yesterday, maybe you'll see why.
The article makes the following points:
1. For the last 25 years, the United States has relaxed enforcement of anti-trust laws.
2. Both the Clinton and the Bush administrations have 'overlooked' the growing might of Wal-Mart's monopsony.
3. Wal-Mart's might has allowed them to determine not only what they will pay for an item to be sold at their stores, but also to micromanage the vendors that are selling to them. One example of this is Coca-Cola. According to the article, Coca-Cola planned to use a new type of sweetener in its diet cola. Wal-Mart said it would not approve of such an ingredient being used, so Coca-Cola designed a second product, yielding to Wal-Mart's pressure. In a second example, Kraft foods has plans to close 39 plants and let go 13,500 workers in order to eliminate one quarter of its product line. This is due to increased cost of manufacture of their products and an inability of Kraft to pass the increased cost on to the purchaser. Wal-Mart demanded that Kraft lower the cost for its products even further. As the article puts it 'Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces'
4. Wal-Mart already dominates our economy. One out of every five retail sales transactions in the US is done at a Wal-Mart cash register. Its revenue is is almost equal to that of the next six largest retailers combined.
5. The article suggests that the best way to reduce Wal-Marts power over our economy is to start enforcing anti-trust laws again and break Wal-Mart into pieces the same way we broke up AT&T and Standard Oil.
I wholeheartedly agree and recommend you pick up this month's Harpers or find the article online.