Adam Smith theorized that
price competition on products and labor would allow the self-interests of the
buyers and sellers to result in unintended beneficial consequences. For one
thing, price gouging would not happen because, assuming low barriers to enter
the market to sell, competitors would quickly drop their prices and gain market
share. That grocery prices did not fall after the supply-shocks, including in
shipping and hiring workers, ended with the end of the coronavirus pandemic in
early 2023 is a pretty good indication that the grocery (and meat producer)
industry was not competitive. Oligarchic markets—those in which just a few,
often times very large, sellers exist—are devoid of the competitive mechanism
that would otherwise maintain prices that are fair to buyers. That is, not only
do competitive markets efficiently allocate goods and services at prices that
connect supply to demand; such markets can also satisfy the ethical virtue of
justice as fairness. Smith was not shy in admitted that a government willing to
stand up to big companies is necessary to keep a market from slipping into the
decadence of an oligopoly and especially a monopoly. I contend that both Americans
and their elected representatives were blind, perhaps conveniently so given the
power of large companies in American governments, both during the coronavirus
pandemic, which ran from roughly 2020 to 2022, and even afterwards as Kroger
and Albertsons colluded at the expense (literally) of their respective
customers and workers.
The full essay is at "Greedy Grocers."