Market Power

Musings by an academic economist on the power of markets and the power over markets.

Thursday, April 07, 2005

Smackdown, Russ Roberts Style!

Russ Roberts had his ire up today at Cafe Hayek. Looks like the Giant grocery store chain and the union(s) that represent some of its worker are trying everything they can to keep the more-efficient Wal-Mart from setting up shop in Maryland.

It's hard to run a grocery store especially when others do it better than you do. So what's an ailing chain to do? There's trying harder, but wouldn't it be nicer not to have to? It's so much easier to try and handicap your competitors—you know, threaten to break their knees with baseball bats, set fire to their stores, intimidate their customers. Alas, these techniques are illegal, so the safest strategy is get politicians to handicap your competitors. This seems to be the strategy being pursued by Giant Foods in Maryland.
Of course, since Wal-Mart is such a nasty business, some politicians are only so happy to oblige. But Professor Roberts lays it down nice and concisely:

C. James Lowthers, president of Local 400, said the debate "is about what's right for the country."
That's a comfort isn't it? Glad to know it's not about self-interest, Mr. Lowthers.

Ironically, if this bill passes it will hurt workers by lowering the demand for their services. It will hurt consumers who will end up paying higher prices for groceries. It will help Giant and its unions.

Maryland Senate President Thomas V. Mike Miller Jr. (D-Calvert) said lobbying on the issue from labor groups was "very light."

Oh, right. They don't really care. It's not that important. Nooooo.

"It's an issue that's been around for a while, and all of us recognize that Wal-Mart doesn't do right by its employees," Miller said.

Great insight, Senate President Miller. Thank you for insulting the employees who choose to work at Wal-Mart for reasons you cannot decipher. Thank you for making it harder to operate a business and hire employees in our state. Thank you for making people's lives harder by making food more expensive. And most of all, thank you for encouraging other businesses to turn to you rather than trying harder as a way of staying in business.