The possible merger of grocery giants Kroger and Albertsons is in the news. When businesses centralize, there is a danger that they could form a monopoly, which can then exploit consumers. This, at least, is the justification that the governmental bureaucracy gives in order to regulate business mergers and centralization. Problematically, the government itself is, by definition, a monopoly. What is going on?
Join The Gwartney Team as they tease out the costs and benefits of centralization in various forms.
Reference Timeline:
Competition vs. the profit incentive // 3:30
Why centralization of the food supply is dangerous // 7:00
Can economies of scale be maxed out? // 15:00
"A diversity of products better satisfies the diversity of consumers" // 18:00
Losing the price signals of capital goods // 23:45
What goes before a company's fall? // 25:00