Ignorant of History

Why is it that each generation seems to forget everything that happened before them? When the US went to war with Iraq, many people thought we wanted to occupy Iraq and steal their resources, yet a quick look at history would show that the US does not have a pattern of doing so. Now WalMart is atop the Fortune 500, and people are worried about what will happen if it gets "too big." According to this article, WalMart is doing everything right, and how there is still room for another 2000 domestic stores. I agree that WalMart will dominate retailing for the next 20 years easily. Unlike others, though, I am not worried about WalMart's size. Many people feel some need to protect their town from WalMart or boycott WalMart or sue WalMart or whatever. But the market will take care of WalMart in the long-term. WalMart will get big enough that some innovative, faster moving retailer will deal WalMart a huge blow. A study of business history will show that this always happens. Consider this:

As it happens, there was a Wal-Mart even before Wal-Mart existed. It, too, was all about selling as much stuff as possible as cheaply as possible (at one point even using a slogan, "Everyday low price," that parallels Wal-Mart's). It, too, grew sensationally, operating more stores in 1929–more than 15,000–than any retailer before or since. It, too, drew loud protests from mom-and-pop stores and inspired legislation to block its expansion. Its sheer size caused FORTUNE to marvel in 1930 at the "incredible, inconceivable, unimaginable activities" of this "budgeteer's Utopia." It was founded in 1859, and its name was the Great Atlantic and Pacific Tea Co., or A&P. Today the grocer's shriveled remnants belong to a German retail conglomerate.

Except in rare cases, the market always keeps things in check, as it will with WalMart. And except in rare cases, the next generation will forget that this has all happened before.

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