----- Original Message ----- From: "Andrew Paul" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Wednesday, December 28, 2005 8:39 AM Subject: RE: Wal-Mart efficiency (was Re: My annual Xmas tirade...)
> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On > Behalf Of [EMAIL PROTECTED] > > Stores are ecconomic entities. Forcing people to buy from less efficent > stores is an ecconomic decision. What other factors, that are not tied to > jobs, prices, income, etc. are you thinking of? I know when I have/had > less money, I was less interested in spending money on aestetics, taste, > etc. than when I have/had more money. How can we be sure that keeping > discount stores out of an area isn't simply a matter of forcing one's own > value system on others? > >Sure, insuring equal access to opportunity is a crucial part of >capitalism/free market etc, it's a valid issue you raise, but that's >part of the problem. By allowing discount stores into an area are we >forcing on them the markets version of a value system? I'll agree that there are some limits to letting the market determine everything. There is the possibility of the trajedy of the commons. Thus, I look at other data sets. For example, the customers at the Wal-Marts around here are far more racially diversified than the local small store shoppers....as well as lower income. Local small clothing stores are upscale. The shopping experience at these upscale stores is better, but the prices are much much higher. They have to be....a small store is much much less efficient, so more has to be made on each item sold. >From this, I see that, even when there is a choice, lower income people choose WalMart, while upper income people are more likely to shop in small stores. Thus, I would argue that banning stores that lower income people like to shop at for non-ecconomic reasons is an imposition of values, while allowing poorer people to make their own tradeoffs in choosing a store is not. > Finally, are you arguing that improved productivity is not inherently > valuable? > >I think the issue is more about the definition of productivity. Production per hour work...measued in inflation adjusted dollars. >One can draw lots of graphs and diagrams about the apparent short term economic >benefits, but is that really productivity, in the broader sense. Ok, >things get delivered cheaper, quicker etc, but is that the be all and >end all? It's not the be all, end all, but it is productivity. The foundation of our civilization is the increase in productivity over the last 300 years. For example, let's look at the increase in productivity in Europe. While the average person in 1500 CE was probably a bit better off than the average person in 1500 BCE, it was not by much. But, the average person today is far better off than the average person 100 years ago. The increased wealth generated by the increase in productivity allowed for many improvements. Indeed, if you look at things that are on people's to do lists for the next 100 years, they will cost a lot of money. Slowing global warming will be very expensive. Taking care of the elderly will be expensive. Insuring medical care for all will be expensive (the average total insurance cost for a comprehensive but not 100% plan for a family is about $1300/month now). If we improve productivity enough, we can do most of these. If it doesn't improve, we will have to make very difficult choices....and leave important things undone. >There is an argument that our current business systems are essentially >unsustainable in the longer term, in a whole lot of ways. I've heard that, but I've never understood how lowering efficiency will help anything. >I am pretty much a pro-market thinker, free trade etc, but the way is set up now >does often not make much sense. It's a simple example, but I still can't >quite grasp how it makes sense to pay farmers in one country not to grow >a crop, and then import it from half way around the world. I think that is wrong...but I'll tell you the perspective from which it makes sense. If one doesn't believe in the market, and considers keeping small, inefficient farmers in business, that makes perfect sense. This is an anti-market government action, one that is harmful in my opinion. >One aspect that does trouble me is that of competition. One of the basic >precepts of free market economics is competition between suppliers. If >you don't like one places good or services or prices, you go elsewhere. >Without that competition aspect the whole system will turn into economic >tyranny. OK, I support anti-monopoly laws. >Many of these companies (eg Walmart) are growing so huge and powerful >that they are endangering that. But, Wal-Mart, as big as it is, is not close to a monopoly. It has less than 9% of the retail market. It has forced it's competitors to be more efficient, but it still has a lot of competition in the market. >Here in Australia we have basically two large food etc supermarket chains. In the US there are four companies that have sales in excess of 30 billion. Between them, they have less than half of the total supermarket business. I think that is a reasonable amount of competition. >Was it Marx who warned that Capitalism would end in one big corporation? >That's what scares me about these mega-corporates. Not that they are >being Capitalist's, but that they are in the process of destroying it >from within. In the US, there are a number of anti-monopoly laws. I support the existence of such laws. On the whole they have worked reasonably well, especially with conventional companies. Microsoft represents a challenge to the laws, and I think the laws can be improved. I think such laws are necessary to balance the market's natural tendency towards concentrating wealth. I think this is one of the major difficulties with the market, and one that should be countered by a number of governmental measures. Indeed, if you look at my economic posts over my 6+ years on the list, you will see that I have advocated a mixed economic system. What I am arguing for here is that one should not, in general, try to stop the natural tendency of the market to efficiency. One should ride increased productivity to increased national wealth. One should counter the natural tendency of markets towards concentration wealth. There are a variety of techniques for doing this (e.g. anti-monopoly legislation, minimum wage laws, laws facilitating the formation of unions, progressive taxes, governmental social services) that are far superior to banning efficient stores. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
