... is from page 62 of the manuscript of Deirdre McCloskey‘s forthcoming volume, The Treasured Bourgeoisie: How Markets and Improvement Became Virtuous, 1600-1848, and Then Suspect (original emphasis):I wonder if one of those things Wal-Mart does right is bargaining hard with its suppliers and how much consumer surplus does it generate for its consumers via its lower prices caused, at least in part, by its tough bargaining?
The four heirs of Sam Walton (Alice, Jim, Christy, and S. Robson) were worth a combined total of $107.3 billion (which puts them half-again above Bill Gates), earn from retailing in which profit margins are low (in groceries, which they now lead, extremely low). Wal-Mart must be doing something right (no, dears: not by underpaying its staff, which the lively forces of entry and exit in the labor market prevent it from doing even if it wanted to; but by pioneering control of inventory and by pioneering mass but negotiated buying, for the benefit of its shoppers, with a small margin left overt for Alice, Jim, Christy, and S. Robson).
Monday, 24 February 2014
McCloskey on groceries
At the Cafe Hayek blog Don Boudreaux writes