George Will’s column goes directly to the back-and forth between me and Professor Epstein over the past couple of days. The most cogent arguments I have seen against the position advanced by Epstein and WIll (and me) appear in a very good Harper’s Magazine feature on the antitrust case against Wal-Mart, written by New America Foundation fellow Barry Lynn, which appeared in the July 2006 issue. Here’s an extended excerpt:
Thus did antitrust power come to serve as a sort of constitutional law within America’s political economy. The goal was to enforce a balance of power among economic actors of all sizes, to maintain some degree of liberty at all levels within the economy. In recent years it has become a truism that antitrust law is designed to protect only the consumer. [This is a reference to the Chicago School theory — ML] But the fact that Congress intended these laws also to preserve both competition per se and to shelter entire classes of entrepreneurs (among whom is the individual worker) was clear at the beginning and has been made clearer many times since….
[Defenders of Wal-Mart argue that this] efficiency is good for all society, and it is especially good for those poor folks who cling to the lower rungs of the economic ladder.
There are two great flaws in such thinking. The first and most obvious is that it ignores the effects of monopoly on our political system—the consolidation of vision and voice, the de facto merger of private and public spheres, the gathering of power unchecked and unaccountable. It is to view American society through an entirely materialistic prism, to measure “human progress” only in terms of how many calories or blouses can be stuffed into an individual’s shopping cart. It is to view the American citizen not as someone who yearns to decide for himself or herself what to buy and where to work in a free market but to say, instead, “Let them eat Tastykake.”
The second flaw is economic, and is of even more immediate concern. Even if the American people did choose to bear the extreme political costs of monopoly, the particular type of power wielded by Wal-Mart and its emulators makes no economic sense in the long run. On the surface, it may seem to matter little who wins the great battles between such goliaths as Wal-Mart and Kraft, or between Wal-Mart and P&G. Yet which firm prevails can have a huge effect on the welfare of our society over time. The difference between a system dominated by firms built to produce and a system dominated by firms built to exercise monopsony power over producers is extreme.
Read the full article here. There’s lots in this passage for me to disagree with. I often agree with George Will about things, and basically always with Richard Epstein. But Lynn here raises an objection to Epstein’s position on “concentrated losses” that has never stopped bothering me.
Is economic progress necessarily preferable to cultural conservation? In the countryside of France, the last century has been dominated by a struggle between the impulse of modernity and a desire to preserve a way of life that many people find absolutely perfect in stasis, balanced and harmonious, its preservation worth sacrificing for. For many of them, going from 5 weeks of vacation a year to 2 weeks, trading their local (expensive) tomatoes for Wal-Mart’s cheap and nearly tasteless ones, means trading the best life has to offer in exchange for increased productivity growth. I agree that Wal-Mart is much better for society and for our economy — especially for low-income people — than its detractors care to admit. But the larger philosophical point seems to me ultimately a normative dilemma, and I just don’t know how best to resolve it. As France grows slowly to accept the failure of its social and economic model, it may be resigning itself to the end of la France des villages. That makes them very sad, and me too.