Very early on in the history of this blog, Tim Russo used two illustrations to tie John Rockefellers’ Standard Oil to Sam Walton’s Wal Mart. Others have made the comparison, but now Andrew Leonard wants to Break Up Wal Mart.

Previewing the upcoming Breaking the Chain: The Antitrust Case Against Wal-Mart by Barry Lynn in the July issue of Harper’s Magazine (not yet available on line), Leonard writes:

The context: “It is now twenty-five years since the Reagan Administration eviscerated America’s century-long tradition of antitrust enforcement. For a generation, big firms have enjoyed almost complete license to use brute economic force to grow only bigger. And so today we find ourselves in a world dominated by immense global oligopolies that every day further limit the flexibility of our economy and our personal freedom within it.”

That’s a fairly standard left-wing critique. More intriguing is how Lynn connects the dots to outsourcing and offshoring:

“The Reagan Administration’s assault on antitrust enforcement had an even more dramatic effect on manufacturers. Complete license to expand horizontally resulted, in many industries, in the virtual collapse of the vertically integrated firm. Once they consolidated control over their marketplaces, scores of big manufacturers shut down or spun off most or even all of such naturally expensive and risky activities as production and research. These firms opted instead to purchase components and other manufacturing ‘services’ from smaller companies whose main or only path to the final marketplace passed through their offices. This is true of corporations as diverse as Nike, Boeing, 3M, and Merck. Although it has become commonplace to trace the phenomenon of ‘outsourcing’ to the emergence of new technologies and changes in the global ‘marketplace,’ it is much more accurate to trace it back to the disappearance of antitrust enforcement.”

Four of Wal-Mart’s top 10 suppliers have filed for bankruptcy in recent years, which is ample evidence, according to Lynn, of how Wal-Mart’s relentless pressure on suppliers to cut their prices is devastating the companies and workers who actually make things. Low prices may feel good for the consumer, Lynn argues, but they are eroding the bedrock of the real economy.

One Nation, under Wal Mart, with low-prices and cheap plastic crap for all.

Jeff Hess: Have Coffee Will Write.

This entry was posted on Saturday, June 24th, 2006 at 1349 by Jeff Hess and is filed under Media, News, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.