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Wal-Mart & Subsidies


Professor Bainbridge makes a “conservative case” against Wal-Mart. The argument he makes with which I am symapthetic is that Wal-Mart (like many large companies) occasionally receives subsidies from local governments. This is true — but I think Bainbridge overstates the case. Many of Wal-Mart’s competitors (Target, K-Mart, CostCo, etc.) have received similar subsidies, and yet are not as profitable or productive as Wal-Mart. More importantly many of the anti-Wal-Mart campaigns (like the one in Cleveland) are not motivated by subsidies to Wal-Mart — the proposed Cleveland Wal-Mart is not receiving local subsidies (though some local competitors do), and local anti-Wal-Mart activists have sought legislation to hamper Wal-Mart’s activities. In other words, they are not content to let Wal-Mart succeed or fail in the free market.

On Bainbridge’s other point, I yield to no one in my love of organic urban communities, but the idea that Wal-Mart has been a significant contributor to urban decline — rather than an indirect beneficiary of the decline brought on by disastrous government policies and other social trends — I find highly implausible.


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