Out of Control Policy Blog

The High Cost of High Cost

Nick Gillespie points to this article which explains why stuff at some Wal-Marts is more expensive than at other Wal-Marts:

    [A] laptop that cost $398 in Woodbury [Minnesota], cost $632 in Hudson [Wisconsin; the two cities are 10 miles apart]. That's a difference of $234 for the exact same computer.

    "That's unreal, isn't it?" says Judy Darwin of Hudson. "May as well go across the border."

    "How can they do that? It's the same store," says Amy Weiser of Madison, Wisconsin.

    The answer dates all the way back to 1939, when Wisconsin lawmakers passed the Unfair Sales Act. That state law says it's illegal for retailers to sell items below cost. It's supposed to ensure a competitive marketplace.

Here's a decade-old piece by Nick on the earlier days of the anti-superstore movement.

This bit will give you that the-more-things-change-the-more-they-stay-the-same feeling:

    As Harvard Business School professor Richard S. Tedlow notes in his 1990 book, New and Improved: The Story of Mass Marketing in America (from which the previous examples are drawn), "In 1933, some 225 anti-chain bills were introduced in 42 state legislatures; 13 were passed. Chain taxes had been passed in 27 states by 1939, although not all were still in force that year." It also prompted longer-lasting federal antitrust legislation aimed at reducing the chains' advantages; the laws had the effect of raising prices to the average consumer.

Ted Balaker is Producer


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