Re: [OPE-L] oligopolies and consumers: a response to Murray Rothbard's apologetics

[Jerry Levy <Gerald_A_Levy@xxxxxxx>]

Hi Alejandro:

 

Rothbard's argument is, quite frankly,  a laughable defense of

monopoly power by oligopolies.  The lack of a boycott does

not signal "consumer satisfaction with the existing state of

affairs" (!) and how they allegedly "benefit .. from voluntary

exchanges":  it rather demonstrates the relative *lack of consumer

choices* in an oligopolistic market.  Consumers know that if they

boycotted one huge corporation  then it would only work to the

advantage of one or more other huge corporations.  Thus to target

Wal-Mart (as some have tried, see the movie "Wal-Mart: the high cost

of low price") would benefit Target and K-Mart and other

mega-corporations.

 

As the above referenced movie shows, huge corporations (in this

case, Wal-Mart) have enormous resources with which they use to

influence state policy and abuse consumers (as well as workers,

domestically and internationally, the environment, etc.).  For instance,

there have been hundreds of  physical assaults (including homicides)

on consumers in Wal-Mart parking lots.  An internal study found, if I

recall correctly,  that  80% of these  crimes were preventable but

Wal-Mart didn't want to spend the (relatively small) additional money

required for security.  (Many stores have video cameras directed at

the parking lot but they were installed, as the movie shows, *to help

prevent unionization!*).  To say that the lack of a boycott or a successful

boycott demonstrates consumer satisfaction with the "existing

state of affairs" is apologetics for transnational capital. 

 

In solidarity, Jerry

 

 

 

I think the Austrian economist Murray Rothbard (Man, Economy and State, Ludwig von Mises Institute 2004) was right when facing your statement:

If the consumers were really angry at this “monopolistic action,” they could easily make their demand curves elastic by boycotting the producer and/or by increasing their demands at the “competitive” production level. The fact that they do not do so signifies their satisfaction with the existing state of affairs and demonstrates that they, as well as the producer, benefit from the resulting voluntary exchanges. (pp. 634)