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

From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Sat Apr 28 2007 - 19:51:55 EDT

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 

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)

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