World's Richest Family Loses $19 Billion in Walmart Wipeout

[TomSlick]

12. As I said, I disagree with many of Walmart's policies but

to the extent the goal of a publicly-held business is to make money for the shareholders, Walmart is uniquely well run.

Walmart was able to put local competitors out of business because Walmart's economies of scale allowed it to have lower operating expense and, therefore, could offer goods at lower prices than smaller local businesses. Walmart has grown to have such a large percentage of the retail market for consumer goods, it can demand lower costs of good sold from suppliers. Suppliers will not necessarily accept the same costs of goods paid by Walmart from smaller merchants. As a result, local merchants have a higher cost of goods sold than Walmart. In turn, this increases the margin between Walmart's prices and those charged by local merchants. A spiral is established where Walmart has more and more advantages over the local merchants. Walmart's success in overwhelming the retail consumer market is the result of unchecked capitalism.

We will not convince the majority of Americans that they should be happy to pay higher prices for consumer goods in order to foster local business. As a result democracy protects Walmart from any limitations on its advantages under unchecked capitalism.

Don't worry about the Walmart shareholders. They will be fine.