I'll say up front that Tim Worstall has found a better way to make a living with his journalistic skills than I have. He managed to turn his blogging skills into a regular gig for Forbes while there are moths circling my mailbox for all the offers I've had. Having said that, I'll take my job over Worstall's I'm much more interested in writing a blog that comforts th' afflicted, afflicts th' comfortable than scribbling away at the opposite. This week Worstall, who is British, attempts to make the case, using a piece from the über conservative, right-wing Daily Mail that Walmart is good for Americans because competition dives down costs. Writing in As Aldi, Lidl And Walmart Show, Competition Benefits Us Consumers, Not the Capitalists, for Forbes, he begins:
Few things seem to raise the populist ire quite as much as the idea that the people who own the shops we buy things from are billionaires. Why should they get all that money from providing us with the things we must have? This particular argument seems most virulent in the US, where the Walton family fortune can produce spitting rage in those commenting upon Walmart itself. But the same applies to two other discount grocery chains, Lidl and Aldi . It’s rather easy, almost trivial in fact, to show that it is we consumers who have benefited most, in aggregate, from the collection of those fortunes. In fact, we benefit many times over, much more than those billionaires do. It’s even possible that there are some rich people out there who did not become so by making us better off: but those fortunes built by retail chains do indeed make us better off.That's true, he's absolutely correct. Sort of. If we're comparing apples to apples, then competition does benefit the consumer. I remember the first year I started driving, before the OPEC embargo sent gasoline prices soaring, when there were popular events known as gas wars. Not the kind we fight today in the Middle East, but rather sales battles among gas stations often sitting on three or four corners of a single intersection. Thanks to government regulation, gasoline was gasoline was gasoline. (As my father is fond of reminding me, all of the gasoline in the Mid-Ohio valley where we lived, came from a single refinery. There was literally no difference between one brand of gasoline and another. That meant that the only way station owner could boost sales was to drop prices. And, as Worstall says, we, the consumers, won. (When I tell my students I once bought gasoline for $0.19 they don't believe me. In the age of Walmart, however, products are not commodities in that same way. One of the ways that Walmart has historically driven prices down has been by demanding vendors find ways to produce their products more cheaply. This might mean by lowering standards. Some companies chose to put the squeeze on their vendors. More than a few, chose to take their business overseas so that they could become producers of cheap plastic crap from China. Some companies said no to Walmart because they were unwilling to compromise quality for price. Most do not. Now, stop and think about what that kind of competition means for food. The Daily Mail story focuses on Aldi, a company about which a three-year-old story concerning the sale of horsemeat still crops up on the most-read category at The Guardian. Then, of course, there is the matter of Walmart's meat. Does Worstall really think consumers are eating well from grocery chains flinging themselves headlong in a race to the bottom? Better yet, I think an interesting challenge, similar to that accepted (and later suspended) by Michigan Governor Rick Snyder, might be fun. How about eating only foods from Walmart, Aldi or Lidl, for say 90 days, Tim? You won't be risking your liver like Morgan Spurlock, but I'd still recommend consulting your physician about which foods to select. Where do you think the help shop for groceries bound for the Walton family tables? Jeff Hess: Have Coffee Will Write.