The New Case Against Walmart
Why the government might be going after the retail giant and others like it for low, low prices.
I am dating myself here, but one of the movies stuck in my brain is Nora Ephron’s You’ve Got Mail, the 1998 rom-com with Meg Ryan and Tom Hanks. If you’ve never seen it, Meg Ryan owns an independent bookstore, Tom Hanks runs a BIG BAD corporate chain, and they fall in love under pseudonyms in the new world of online dating, only to find they’re enemies in real life.
One interesting thing about this movie is that the “good guy” doesn’t win, in that Meg Ryan’s bookstore closes at the end of the movie because the BIG BAD corporate chain drives it out of business. Although it’s standard practice now that a retail giant unseats a smaller, independent business, I remember seeing this movie and being surprised that movie made that choice. Was that it? Chains always win?
For decades, that’s been what’s happening in America, we all just accept that chains are more efficient and small businesses can’t win. But what if independent businesses get more power to push back against big chains? That’s the premise of my most recent story, Who I’m Hurting By Shopping At Walmart.
It turns out there’s a law on the books called the Robinson-Patman Act that dates from 1936 and that basically says that big chains can’t bully suppliers into giving them discounts and special deals that smaller stores can’t access. It was passed in the throes of the Great Depression as the A&P, a giant chain, was driving small grocery stores out of business. But it applies to retailers outside grocery stores, too — big chain pharmacies are driving independents out of business, same with seed stores and, of course, bookstores. In fact, one of the last Robinson-Patman actions brought by the government, in 1988, was against big publishers’ pricing practices for chains, and it was brought by a professor I interview in my piece. (The government did not win.)
The government essentially stopped enforcing the law for a number of reasons, including a populist revolt that pushed the government to put the welfare of consumers above all else, including protecting independent stores. (Here’s an interesting Matt Stoller piece from 2016 about how post-Watergate liberals stopped fighting Monopoly power in the 1970s.) But now, under Chair Lina Khan, the government might start enforcing the law again.
“I do think that the corporate power in this country is such that slowly, folks no matter what their politics are, are starting to say this is too much,” FTC Commissioner Alvaro Bedoya told me. “And my hope is that five or ten or fifteen or twenty years from now, that you have more and more bipartisan agreement that we need to work harder to protect small businesses.”
Is this the turning of the tide in which the government sides with small businesses against chains again? Read more in my story:
Who I’m Hurting By Shopping At Walmart
Also! I can’t remember if I shared this in a past newsletter, but I did another Beaconites! podcast with Calli Rothberg, who owns Passion the Adult Dance studio on Main Street. She also grew up in the second-oldest house in Beacon, where my family happened to stay for Passover this year because Calli’s parents rent it on Airbnb. Here’s the episode page, or you can just look for Beaconites wherever you get your podcast:
A Passion for Movement, With Calli Rothberg
Books to Fall Asleep To: Paris: The Memoir. I know, I know, Paris Hilton may seem like an odd choice for a calming autobiography, what with all the partying and paparazzi. But this book is actually . . . interesting? Both for a glimpse into how the 1% lives (her family lived for a long time in the Waldorf Astoria) and for hearing her argument that she was an influencer before influencers were a thing. (There’s a good Annie Lowrey review of how she uses the memoir to construct a new public self.) But she also had some fairly terrible things happen to her, including being grabbed in the night and sent to a brutal “school” for bad kids, which, if what she says is true, is a window into the unregulated world of alternative education.