OneNewsNow discusses the Amazon-Whole Foods deal with Iain Murray.
A free market strategist says consumers shouldn’t worry about Amazon gaining a monopoly on goods and services – because it will eventually be replaced by another innovation.
Amazon recently made a bid for Whole Foods, an announcement that drew the ire of some individuals and groups that say the Internet retail giant is seemingly killing competition and harming jobs. What started as a website to buy books and other items now has a music service, produces its own films, and offers streaming services.
Iain Murray, vice president at the Competitive Enterprise Institute, isn’t concerned at all that Amazon is getting too big.
“Amazon has made its reputation by selling reductions in transaction costs,” he explains to OneNewsNow. “Basically it makes the act of shopping for things much cheaper and much more convenient for people.
“So if they’re now going to take this model and apply it to Whole Foods so that you can get delicious food that you want [and get it] more cheaply and more conveniently, then I think that’s only a good thing for the American consumer.”
Whole Foods has approximately 470 stores. While that’s more than its competitor, The Fresh Market, Kroger has nearly 2,800 stores. Based on that, Murray says people are overreacting.
“If anything, what Amazon can do is expand the range of Americans who are exposed to Whole Foods,” he continues. “If you love organic … then in all probability you’re going to have a much easier way of getting hold of it if you don’t live near a Whole Foods right now.”
Murray points out that 20 to 30 years ago, people were worried about companies like Kodak having a monopoly, and later argued that “big box” bookstores were gobbling up the book trade. Today, many of those companies don’t exist – and while it may not even exist yet, Murray says something will come along that replaces Amazon.
“It’s almost always an innovation that’s created outside a big firm and they wipe out the big firms very quickly,” he explains. “That’s the way the free market works, and there’s no reason to get upset about it.”
Read the full article at OneNewsNow.