David Laband on "unfair competition"

Every effort by small businessmen to forestall the building of a Wal-Mart is an attempt to shoot the messenger rather than pay heed to the message.  Local economies do not go to pot when Wal-Marts are built.  Quite the opposite: Sam Walton once said, "There was a lot more business in those towns than people ever thought."

Without question, each Wal-Mart and Sam's store alters the structure of local unemployment.  The sons and daughters of local businessmen and women no longer follow in their parents' proprietary footsteps.  Now they, as well as many other local workers, go to work for Uncle Sam (Walton).  Thus, the overall rate of local employment is generally not adversely affected.  While we may feel sorry for the personal losses suffered by the owners of these no-longer competitive small firms, the aggregate benefits reaped by (all-too-often- forgotten) consumers, including those same small businessmen, outweigh their losses...

The pleas to local zoning boards and planning commissions for protection from "unfair competition" by small businesses faced with the prospect of having to compete with a new Wal-Mart store sound identical to the rhetoric employed by mouthpieces for the Big Three automobile companies, the textile and steel industries, sugar producers, and every other domestric industry seeking to restrict foreign sales of these products in America.  To kick Japanese and other foreign producers out of American markets is to deny the benefits of Sam Walton-esque competition.

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By invoking the rhetoric of "unfair competition," domestic firms seek deliberately to mislead consumers into thinking that protection of competitors is the same thing as protection of competition.  Nothing could be further from the truth.  Protection of the existing firms in an industry against more efficient competitors, be they American or foreign, insulates those firms from the forces of competition.  American consumers are the worse for it: they pay higher prices for shoddier products than would be available in a more competitive environment.

Japan-bashing is equivalent to Sam Walton-bashing.  The principles of competition are universal, whether the competitors are domestic or foreign.  The fact that sellers are foreign does not diminish the potential gains to American consumers from competition between sellers.  If we're going to lionize Sam Walton, consistency demands that we lionize every successful producer in the global economy.

~ David N. Laband, "Lessons from an Entrepreneur," The Freeman, September 1992

(Article was reprinted in The Spirit of Freedom: Essays in American History, edited by Burton W. Folsom, Jr. This quote appears on pp. 197-198.