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URL:  https://boards.fool.com/this-is-simply-not-true-in-many-industries-there-24991976.aspx

Subject:  Re: Here's your chance: Balance the Fed budget Date:  1/3/2007  12:24 AM
Author:  mishedlo Number:  200223 of 603176

This is simply not true. In many industries there are economies of scale that produce huge efficiencies. That is why we have walmart, because a million small grocery stores are ineffficient. That is why we have citibank rather than hundreds of little neighborhood banks. One big retailer can squeeze many efficiencies, centralize many aspects of the business process, etc. Most large corporations are oligopolists. This is a lot more efficient than free competition, which is almost nonexistent in any field were corporations operate. If the retail market were to return to free competition, Walmart's profits would disappear and it would go bankrupt, but consumer prices would rise because of rising inefficiencies.

Wrong captain.
It is free competition that allowed Walmart to grow.
If the government steps in and mandates inefficiencies like required health care for employers above a certain size, Walmart will shrink.
PS That was already tried but I believe the state lost.

Now if you are saying that C and Walmart got big ONLY because of government actions that MIGHT be another story but I doubt it. In the case of Walmart, Sam had a better idea and was better at implementing it. That is free competition and Walmart grew.

You are proposing that companies can not grow in the face of competition which I believe is silly. The strong survive and grow in the face of competition, perhaps because of competition. Consumers benefit as a result with increased numbers of products at prices that decline. Dell did not beat out Micron because it was bigger, it got bigger because it was better and customers decided on DELL. Likewise customers chose Oracle over Sybase for the same reasons (Oracle was doing something that customers wanted) and thus won the software battle.

Mish



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