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Wednesday, April 18, 2007

I have no idea what to do with a blog


So I created a blog a couple of months ago, but I have only made one post. Why, well I guess the biggest reason is, I have no direction and no audience, and why would I. I am no expert or authority on any subject. I am by no means a writer/blogger, but I want to try to make something of this. I know this blog is 'low key' and basic (b/c I dont really know how to create and run a website entirely) so here whats going to happen.

The direction of this blog will be topics I discuss with friends, family, and colleagues. I'll try to make one post a week. Look for a post on the importance of local commerce.

This is an issue important to my aunt. She has been giving me books about the topic like "The Walmart Effect" and "Big Box Swindle." She is active with buy local and very passionate about ethical consumerism.

As an Economist (B.A.), I intuitively like competition of any variety and know that capitalism is a process of creative destruction. Markets change, and firms compete differently. In this issue, as I see, local shops exit the market mainly due the loss market share to big boxes. Why, well there are many classical reasons why. Consumer preference, lower prices, and changes in demand. My aunt's argument follows that big boxes compete unfairly, deteriorate the local economy, and provide lower quality products.

Do they, or do they just represent a different organizational structure. Big boxes relay on scale of economies of all aspects of their organization to lower operating costs. Lower operating costs provides them a competitive edge over smaller businesses. Is that unfair? No, this is by no means unfair.

Local economies are enduring revenue loss these days. Why, big picture reason, tax revenue sources are based on immobile property and the trend in 'todays global economy' is more mobility. Commerce is online, land and equipment are not as important as information and technology. Sales tax revenue growth is shrinking, if not negative and the future looks worse.

So we have a battle, big box v. local shop! Who provides a bigger benefit to the local economy. Coming soon! I'm going to look into this more.

Third point of the argument , quality. My comment, quality of products depends on the preferences of the consumer, right? Does Walmart decide what quality we want, or does
it impose price demands on its suppliers solely for its own profit margins? Does Walmart have too much market power over its suppliers? Has their been a change in consumer preference, the lowest price, to hell with quality?

Look for more on this soon. I thinks I will be writing several articles on this subject.

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