Neo-Feudalism and the Invisible Fist
12th September 2010
The surest sign that a market is free is that it is competitive; there should be a rich variety of products provided by a vast number of firms, a situation which affords entrepreneurs many opportunities to enter the market and workers many places to sell their labor. And when we waltz into our local Wal Mart, that is what we seem to see. Alas, it is an illusion of competition rather than the reality. For example, if you want eyeglasses, you can go to Pearl Vision, or Lenscrafters, Sears Optical, JC Penney, Target, Macy’s, Sunglass Hut, or buy frames from 25 different manufacturers. Surely choice and competition prevail in this market. But no. All of these are one company, the Italian conglomerate Luxottica. And as with glasses, so also with so many other products. Most of our beer—even some that try to pass themselves off as “craft” beer—is provided by just two companies, ImBev of Belgium or the South African Brewing Company. Proctor & Gamble provides 75% of razors, 60% of detergent, 50% of feminine pads, etc. Even what few companies remain in each market often engage in collusion rather than competition. Wal Mart, for example, appoints one company as a “category manager” to allocate shelf space for all the “competing” companies.