Americans think large corporations are invariably more efficient. They aren’t.
I wrote about how local pharmacies, banks, and other local enterprises possess "economies of small scale” that enable them to outperform their big rivals at @washingtonpost
The reason that local businesses are disappearing is that policymakers, enthralled to bigness, have allowed a few corporations to amass outsize power & wield it with impunity. Rather than compete head-to-head with their smaller rivals, these giants can simply crush them. 2/
Independent pharmacies, for example, outperform the big chains by a wide margin. It’s not despite being small. It’s because they are small. It’s their local ownership that makes the difference. 3/
As I write: "Their decisions are guided not by the prerogatives of Wall Street but by the health-care needs of their neighbors. Lacking top-heavy bureaucracy & rich with local knowledge & relationships, independent pharmacies possess what you might call economies of small scale."
We’re doing ourselves a huge disservice by accepting failed antitrust, banking, & other policies that fuel consolidation.
We’re undermining community. And we’re trading away some of the most productive & effective parts of our economy.
@SenAmyKlobuchar@SenBooker@SenBlumenthal@SenMarkey@SenBrianSchatz While I’m encouraged — the presumptive ban on mergers by very big firms is great --there’s much more that Congress should do to ensure independent businesses aren’t threatened by highly concentrated markets and rampant market power abuse by dominant corporations. 3/
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
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/