Depends on how they're trying to do it. If they're raising fair objections in a public setting, that's democracy at work. If they're raising bogus objections or bribing people in backroom deals, not so much.
Is it fair for a business to block a competitor from even setting up shop in such a proximity as to force them to compete?
Generally, no. That is a general description of the kind of actions outlawed by the Sherman Act and the Clayton Act. But, if the exclusion you refer to came in the form of Walmart inducing the city council to block Meijer, then you'd (probably) have to prove a the city council was involved in a conspiracy with Walmart. If the city just decided to do this for reasons of its own (zoning, etc.), then while the decision may have anti-competitive effects, it might not be a violation of federal antitrust law.
All that said, while most of the work I do in economic consulting relates to antitrust cases, I am not a lawyer.
Ethical? Wal-Mart's obligations are to its profits, so I would say that there is nothing unethical about what is just profit maximizing behavior.
But, I would say the fault (or ethical lapse) would lie with the city for even entertaining such an idea. If they are, I don't see how one could blame Wal-Mart for essentially lobbying for laws that would benefit them. Companies lobby all the time for regulation that would better position themselves or their product, this is no different.
If the government would keep its nose out of the market, companies would not have such an incentive to lobby and instead would use those resources to make a better product or pay a higher wage, or open another store, etc.
If politicians had nothing to sell, corporations would stop funneling money towards them.
to explain: what i mean is that the wal-mart employees are citizens of the area where the wal-mart is located. they have a right to ask the government to redress their grievances (the construction of a new Meijer). where i live, at least, all new construction must be approved by the zoning board, and it is routine for citizens to express their opinion about wanting or not wanting a particular store to enter a particular neighborhood. usually this has more to do with aesthetics and preserving some sort of local character, but it's up to the zoning board to decide what are and aren't good reasons for accepting and denying applications. as citizens the right to ask, no matter how crazy your reason, is and should be protected.
What free market are you referring to, Kevin? Unfortunately, there is no presumption in the direction of a free market. The market is just as restricted as vendors can make them.
Ethical? Wal-Mart's obligations are to its profits, so I would say that there is nothing unethical about what is just profit maximizing behavior.
Yes and no. Perhaps "ethical" muddies the waters -- we are on more solid ground if we stick to "legal" issues. Walmart has of course a contractual obligation to its shareholders to maximize its profits, or stock price depending on what those shareholders prefer, but it also has numerous other obligations as stipulated in the laws under which the company was originally incorporated. The sum of these obligations can probably be reduced to this: a public corporation has an obligation to maximize its profits (or stock price) subject to the constraint of following all relevant US (and perhaps even international) laws. If a company would maximize its profits by blowing up a competitor's manufacturing plant (or, alternatively, lowering its price below marginal cost to deter the entry of a competitor), such an action is still a violation of that company's obligations.
Regulation of markets is a primary function of government. It's one of the few Constitutional mandates Congress has, but it's arguably been the main function of government since the first government was established.
People who think otherwise are, in my view, a little daft. Having government "keep its nose out of the market" isn't just foolish, it's downright dangerous. Without government, "the market" will simply develop violent thugs to enforce de facto rules. That, for example, is how the mafia has always operated, and it's still how markets operate in various badlands like Afghanistan.
Why should a local government NOT have the right to say "we will allow these vendors to peddle their wares here, and we will not allow these others to do so?" I can find no reason they shouldn't. Setting regulations on what may be sold and under what circumstances it may be sold and who may do the selling are all perfectly ethical and reasonable functions of government.
Whether it makes sense for them to try to keep Meier out so Wal-Mart doesn't compete is a different matter. But from my perspective, the city council is doing nothing unethical to consider such a measure, *if* there is no bribery, graft, etc. involved.
Regulation of markets is a primary function of government. It's one of the few Constitutional mandates Congress has, but it's arguably been the main function of government since the first government was established.
The argument also assumes (unsafely, IMO) that WalMart and the city did not sign an agreement to limit the competition in return for something from WalMart. Something like building roads or setting aside green space.
Just as cities can decide to give tax preferences in order to attract new business, they can also offer 'no-competition' clauses in contracts with new businesses. Same way that shopping malls will limit the number of cinemas, restaurants, etc.
Kevin, I'm afraid we don't have enough information to judge. As John_B points out, there may be agreements that WalMart made as part of bringing business and jobs to the area, and which would be violated by bringing Meijers to the area. Do you have links to more details?
Unless you have at least 2 firms vying for a consumer's money, you don't have a market. Should Wall*Mart try to stop a competitor from moving in? Sure. I'm pretty sure it would be anti-capitalistic to let them block such a move...
Of course it's unethical of Wal*Mart to try to use the cudgel of government to keep another business from competing with them.
And Dean, the first role of government is keeping its citizens safe. Government started up in the environment where roving bands of thugs who'll happily kill you and take what's your were very common. Government existed first to stop that, and second to stop people within your group from killing you, stealing from you, etc. Regulating trade came later, and is much less important.
Unless you're referring to holding up everyone with goods who comes near you and demanding some of it. In that sense, taxation was probably the first form of government, where government is defined as "the application of force" (which is probably the best definition of government).
And the big problem with government regulation isn't nearly so much a moral problem, as a practical problem. So many government employees are breathtakingly — almost criminally — incompetent. Giving more authority to use force to make their incompetent schemes come incompetently to fruition is asking for a lot of trouble. Just look at the recent history of Russia, or China.
It's the same as with democracy — democracy has no greater moral authority than monarchy does, it's just so much better in practice that calling for monarchy is nearly immoral.
I just don't see it that way anymore, Chris. Having someone to protect you from roving bands of thugs is something that existed before there was any formal government. It's called "hiring or giving birth to someone who will do that for you." And whoever had the toughest and most effective thugs got to decide how things worked.
If you look in the Bible, it appears very much that where government really starts is with JUDGES, who resolve disputes between parties. Yet what is arbitration of disputes between parties, but regulation of commerce? Especially if the dispute isn't over something violent, but over who-owns-what, who promised to trade what to whom, who lied and who didn't? That's all regulation of commerce right there.
What is "you shall not engage in prostitution or the selling of pornographic drawings in certain neighborhoods" but regulation of commerce? What is "you shall not sell alcoholic beverages except at certain times and places" but regulation of commerce? What is the sabbath if it is not, amongst other things, a rule that workers should get at least one day in 7 off and a limitation on commerce? What is a judge saying "you are entitled to half this land, while your brother is entitled to another half, because your father has died and left no will" if it is not regulation of commerce?
Protection from strangers who want to hurt you or steal your stuff is one function of government, but that existed before government. Arbitration of disputes in goods and services--that's government.
I'm amazed at how many so-called libertarians and conservatives don't recognize all this. It's intuitively obvious to me, but apparently not to others.
2.12.2008 2:21pm
Commenting on Dean's World is a privilege, not a right. Dean is your host, you are his guest, and you should behave in that fashion. Dean is not your babysitter, nor is he your punching bag. Please remember this. In general, you are free to disagree with anyone on any subject you wish, but abusive behavior will not be tolerated.
Of course we all lose our tempers now and then. Dean freely admits to being imperfect in this regard, which is why regulars to this establishment will generally be cut more slack than people who we don't know very well.
Still: behave like an adult, or go find somewhere else to play. Thanks.
The truth usually lies soemwhere in between.
Generally, no. That is a general description of the kind of actions outlawed by the Sherman Act and the Clayton Act. But, if the exclusion you refer to came in the form of Walmart inducing the city council to block Meijer, then you'd (probably) have to prove a the city council was involved in a conspiracy with Walmart. If the city just decided to do this for reasons of its own (zoning, etc.), then while the decision may have anti-competitive effects, it might not be a violation of federal antitrust law.
All that said, while most of the work I do in economic consulting relates to antitrust cases, I am not a lawyer.
But, I would say the fault (or ethical lapse) would lie with the city for even entertaining such an idea. If they are, I don't see how one could blame Wal-Mart for essentially lobbying for laws that would benefit them. Companies lobby all the time for regulation that would better position themselves or their product, this is no different.
If the government would keep its nose out of the market, companies would not have such an incentive to lobby and instead would use those resources to make a better product or pay a higher wage, or open another store, etc.
If politicians had nothing to sell, corporations would stop funneling money towards them.
to explain: what i mean is that the wal-mart employees are citizens of the area where the wal-mart is located. they have a right to ask the government to redress their grievances (the construction of a new Meijer). where i live, at least, all new construction must be approved by the zoning board, and it is routine for citizens to express their opinion about wanting or not wanting a particular store to enter a particular neighborhood. usually this has more to do with aesthetics and preserving some sort of local character, but it's up to the zoning board to decide what are and aren't good reasons for accepting and denying applications. as citizens the right to ask, no matter how crazy your reason, is and should be protected.
Yes and no. Perhaps "ethical" muddies the waters -- we are on more solid ground if we stick to "legal" issues. Walmart has of course a contractual obligation to its shareholders to maximize its profits, or stock price depending on what those shareholders prefer, but it also has numerous other obligations as stipulated in the laws under which the company was originally incorporated. The sum of these obligations can probably be reduced to this: a public corporation has an obligation to maximize its profits (or stock price) subject to the constraint of following all relevant US (and perhaps even international) laws. If a company would maximize its profits by blowing up a competitor's manufacturing plant (or, alternatively, lowering its price below marginal cost to deter the entry of a competitor), such an action is still a violation of that company's obligations.
People who think otherwise are, in my view, a little daft. Having government "keep its nose out of the market" isn't just foolish, it's downright dangerous. Without government, "the market" will simply develop violent thugs to enforce de facto rules. That, for example, is how the mafia has always operated, and it's still how markets operate in various badlands like Afghanistan.
Why should a local government NOT have the right to say "we will allow these vendors to peddle their wares here, and we will not allow these others to do so?" I can find no reason they shouldn't. Setting regulations on what may be sold and under what circumstances it may be sold and who may do the selling are all perfectly ethical and reasonable functions of government.
Whether it makes sense for them to try to keep Meier out so Wal-Mart doesn't compete is a different matter. But from my perspective, the city council is doing nothing unethical to consider such a measure, *if* there is no bribery, graft, etc. involved.
Dean, have I told you lately that I love you?
Just as cities can decide to give tax preferences in order to attract new business, they can also offer 'no-competition' clauses in contracts with new businesses. Same way that shopping malls will limit the number of cinemas, restaurants, etc.
And Dean, the first role of government is keeping its citizens safe. Government started up in the environment where roving bands of thugs who'll happily kill you and take what's your were very common. Government existed first to stop that, and second to stop people within your group from killing you, stealing from you, etc. Regulating trade came later, and is much less important.
Unless you're referring to holding up everyone with goods who comes near you and demanding some of it. In that sense, taxation was probably the first form of government, where government is defined as "the application of force" (which is probably the best definition of government).
And the big problem with government regulation isn't nearly so much a moral problem, as a practical problem. So many government employees are breathtakingly — almost criminally — incompetent. Giving more authority to use force to make their incompetent schemes come incompetently to fruition is asking for a lot of trouble. Just look at the recent history of Russia, or China.
It's the same as with democracy — democracy has no greater moral authority than monarchy does, it's just so much better in practice that calling for monarchy is nearly immoral.
If you look in the Bible, it appears very much that where government really starts is with JUDGES, who resolve disputes between parties. Yet what is arbitration of disputes between parties, but regulation of commerce? Especially if the dispute isn't over something violent, but over who-owns-what, who promised to trade what to whom, who lied and who didn't? That's all regulation of commerce right there.
What is "you shall not engage in prostitution or the selling of pornographic drawings in certain neighborhoods" but regulation of commerce? What is "you shall not sell alcoholic beverages except at certain times and places" but regulation of commerce? What is the sabbath if it is not, amongst other things, a rule that workers should get at least one day in 7 off and a limitation on commerce? What is a judge saying "you are entitled to half this land, while your brother is entitled to another half, because your father has died and left no will" if it is not regulation of commerce?
Protection from strangers who want to hurt you or steal your stuff is one function of government, but that existed before government. Arbitration of disputes in goods and services--that's government.
I'm amazed at how many so-called libertarians and conservatives don't recognize all this. It's intuitively obvious to me, but apparently not to others.
Of course we all lose our tempers now and then. Dean freely admits to being imperfect in this regard, which is why regulars to this establishment will generally be cut more slack than people who we don't know very well.
Still: behave like an adult, or go find somewhere else to play. Thanks.