There’s a lot of gobsmacked reporting about how West Virginia is leading the nation on vaccination by relying on local pharmacies rather than CVS. Local drugstores! West Virginia! Who can believe it!
It’s a telling example of how steeped we are in the ideology of bigness. 1/
We’re so certain that big business is superior to small, and that big cities are smarter than rural places. We’re blinded by these ideas. Only the most glaring evidence of the opposite can shake us out of the conviction. 2/
Last year, I watched economists struggle to figure out why so many more PPP loans were made in some places than in others. The answer wasn’t hard to see. It just confounded their assumptions: small banks are better at getting capital to the real economy than big banks are. /3
But if you shed the assumptions and start actually looking, you find that in many industries, small outperforms big, and small businesses often provide distinct market benefits that their large competitors can’t match. I wrote a paper on this 2016. ilsr.org/monopoly-power… 4/
Similarly, I often find that urban liberals have a hard time believing that many of the best examples of state and local policies that block corporate power come from rural places. No state has thumbed its nose at Wall Street more than North Dakota. 5/ ilsr.org/map-shows-how-…
Or to take a rural state on the other end of the political spectrum, Vermont has largely blocked Walmart and other big-box retailers from dominating its economy. ilsr.org/vermont-is-mag…
The reason small businesses, small farms, and small banks are disappearing is not because they can’t compete. It’s because this ideology of bigness has led to a host of antitrust, tax, and banking policies that favor big corporations and undermine small ones.
7/
We often talk about the closure of a small business — a local drugstore, say — as though the stakes are only the nostalgic feeling of these places. But in reality, we’re losing some of the most effective & productive parts of our economy. The costs are so much greater. 8/8
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Happy 2021! Since we’re all thinking about 1) vaccine delivery and 2) control of the Senate, it’s a good time to reflect on independent pharmacies….
Local pharmacies are critical to healthcare delivery in rural areas, including Covid vaccines. Yet they are endangered & disappearing — because of monopolistic aggression by CVS and other PBMs.
Fighting for local pharmacies would help Dems compete for more Senate seats. 2/
Take Iowa. The state is reporting a "critical shortage" of rural pharmacies needed for Covid vaccination. Over the last 20yrs, the number of independent pharmacies has fallen by more than half. A growing number of Iowa counties are "pharmacy deserts.” 3/
Yikes. There’s a deal afoot to merge Simon & Schuster with Random House — which would create a publishing behemoth controlling one-thirds of all books sold in the U.S.
"The deal could draw attention from the U.S. Justice Department” — It should draw far more than attention. The government should block this merger.
One consequence would be an even bigger focus on trying to create mega best-sellers — basically pouring money & effort in to potential superstar books, at the expense of publishing new authors, important nonfiction, etc.
Amazon is taking a bigger & bigger cut of the revenue earned by the small businesses that depend on its site. Amazon is pocketing 30% of their sales — up from 19% just 5 years ago.
First there were the referral fees – 15% off the top.
And then Amazon said: if you want to qualify for Prime and keep generating sales, you should sign up for FBA, our warehousing & shipping services. That’s another set of fees, which keep rising. 2/
Then Amazon decided to build a big advertising business. It turned over more of its search pages to sponsored ads.
It said to sellers: If you still want your products on the first page, that will be another set of fees. And, oh, those fees will rise too. 3/
I've resigned my fellowship at Yale's Thurman Arnold Project. The director, Fiona Scott Morton, revealed that she’s a paid adviser to Amazon & Apple. I think that makes it hard to achieve the project’s goal of creating a space to grapple w/ the antitrust implications of Big Tech.
It’s also at odds with the legacy of Thurman Arnold, the anti-monopolist hired by FDR to rebuild the Antitrust Division at DOJ. Arnold took an aggressive approach to prosecuting monopolies, which he described as “a dictatorial power subject to no public responsibility” and…
…a “toll bridge over which everyone has to pass.” That sounds a lot like Amazon to me. We can only imagine that if Arnold were at DOJ today he would be marshalling the law to check the outsized power and abuses of the tech giants.
@HouseJudiciary Interviews with over 20 Amazon employees reveal that they routinely gathered detailed sales & cost data from product makers selling on the site. They used the data to make competing Amazon-brand products. 2/
Amazon is looking for a fall-guy.
“”We strictly prohibit our employees from using nonpublic, seller-specific data to determine which private label products to launch.”’ Amazon said ... company has launched an internal investigation.” 3/