The following is taken from Political Crossfire Forums.

A “Monospony” is defined as a market situation in which one buyer exerts a disproportionate influence on the market.

Walmart has gained increasing monopsonistic powers over the market in recent years and as such is the subject of much criticism. Companies that have refused to bend to walmart’s demands to meet prices have suffered severe damage. One good example is Rubbermaid, who refused to cheapen the quality of their storage containers to meet Walmart’s price requirements.

Walmart stopped carrying them and they instantly lost over 60% of their market and had to lay off thousands of people and close plants. Rubbermaid was an American company who had grown substantially in the last 20 years. The plants they closed were all previously profitable American plants.

Should one retail company have the right to dictate how products are made that are to be sold in its stores? It’s not that Rubbermaid’s products weren’t selling, they were, and making a profit. It was that Walmart couldn’t make enough profit re-selling them and wanted Rubbermaid to make them more cheaply.

What effect does this have on the creativity and ingenuity of American Businesses? Can we really do our best in the world market if we have to make Walmart happy here to stay in business? Walmart is not everywhere yet…

What effect does it have on consumers? Maybe I want to pay an extra 50 cents for a better container? What if I want one made in the USA? Who’s to tell me I HAVE to settle for something cheaper or foreign? Where’s my choice?

In many towns, Walmart is becoming a monopsonistic market for people’s labor and people who used to work at many different local stores are now forced to apply at Walmart.

What are your thoughts?

In reading the comments to this post at Political Crossfire Forums, there appeared to be some controversy as to whether the above described conflict between Walmart and Rubbermaid ever actually occurred. I could not find any easy reference to Rubbermaid layoffs and Walmert. Regardless, the example is instructive in discussing whether or not Walmart is Good for America.

I had never heard of this word until I was channel surfing over Labor Day and came upon a forum on C-Span. Just caught the end of it and was not even sure that I had heard the word correctly. Googled it and there it was.

Think about what this means. Rubbermaid has built its reputation over the years (I assume) trying to put out a superior product that people will pay a little bit more for because it lasts. At least, that is why we buy Rubbermaid! Now, Walmart comes along and says we want you to make a less superior product that we can sell even cheaper and if you don’t we won’t buy anything from you and your business will be ruined.

Is this a subversion of competition? Walmart is not letting the consumer choose the product it will buy. Walmart is not stocking both Rubbermaid and a cheaper brand and letting the market determine which sells. Walmart is deciding in advance what product the consumer will be allowed to buy at its stores.

Maybe some people think Walmart or any corporation should certainly do this because if it can make a penny more per item selling the inferior brand, no matter how well Rubbermaid’s brand sells, it owes it to its stockholders to make the most it can. I am all for competition and the marketplace, but this is not competition. This is wielding power. Competition is not enhanced. The marketplace is not improved. Consumers can’t buy the product they would otherwise prefer because Walmart has made the decision for us.

Thought provoking, ain’t it? Scary actually! Corporate power reigns supreme. Is there no conscience in the boardrooms of America? Without a doubt, the corporations of the world will be buying and selling among themselves long after human life is gone.