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Competition Should Be Judged By How Well Consumers – Not Producers and Sellers – Are Being Served

Here’s a letter to the Wall Street Journal:


Chris Jones attempts to justify antitrust actions against large retailers by complaining that small retailers during the pandemic faced “higher wholesale prices than competitors and less access to critical goods such as paper products, cleaning supplies and grocery staples” (Letters, Jan. 10).

Let’s describe the same situation more informatively: large retailers secured lower wholesale prices than competitors and more access to critical goods such as paper products, cleaning supplies and grocery staples.

The very size of large retailers often enables them to acquire more and better inventory, and at lower costs, than can small retailers. And we know that these efficiencies are shared with consumers, for otherwise small retailers wouldn’t complain about their larger rivals. Also, retailers that manage in the market to secure more-reliable and lower-cost access to inventories tend to grow relative to retailers that don’t.

To punish large retailers with antitrust actions would be to punish these firms for excelling at serving consumers.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

There’s no question that lockdowns and other Covid restrictions created situations that were better able to be exploited by large retailers at the expense of smaller competitors. But the culprits here are the lockdowns and restrictions, not Amazon and other large retailers.

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