Schumpeter Is Right, Brandeis Is Wrong: Large Retailers Benefit the Economy More Than Small Retailers

Abstract

Large retail companies are more productive than small retailers. That is why they can offer better prices to consumers, pay higher wages to their employees, and contribute more to the overall economy—which puts the lie to the neo-Brandeisian argument that “big is bad.”¹

Report

Conclusion

Over the past several decades, the trend toward larger, more-productive retail firms has played a significant role in enhancing the sector’s productivity and wages while also helping to reduce inflation. Despite this, neo-Brandeisians continue to hold an ideological animus toward large retailers specifically and large firms overall, believing that small retailers are not really business owners, but a form of victimized proletariat. Policymakers should not fall for this rhetoric and instead should adopt a position of size neutrality.

In addition, the trend toward enormous stores has demonstrated that these businesses contribute positively to the economy and that this movement itself results from the Schumpeterian process of creative destruction. To put it another way, the trend toward enormous stores demonstrates that neo-Schumpeterian theories provide a more accurate depiction of the economy. Therefore, antitrust and economic policymakers must adopt a neo-Schumpeterian perspective.[82]

Takeaway: Large retail companies are more productive than small retailers.

Conclusion quoted verbatim from the report.

Notes

1. Trelysa Long & Aurelien Portuese, Schumpeter Is Right, Brandeis Is Wrong: Large Retailers Benefit the Economy More Than Small Retailers (Info. Tech. & Innovation Found., Apr. 10, 2023), https://itif.org/publications/2023/04/10/schumpeter-is-right-brandeis-is-wrong-large-retailers-benefit-the-economy/. Summary quoted verbatim from the ITIF publication page, https://itif.org/publications/2023/04/10/schumpeter-is-right-brandeis-is-wrong-large-retailers-benefit-the-economy/. ↩

Cite as: Trelysa Long & Aurelien Portuese, Schumpeter Is Right, Brandeis Is Wrong: Large Retailers Benefit the Economy More Than Small Retailers (Info. Tech. & Innovation Found., Apr. 10, 2023), https://itif.org/publications/2023/04/10/schumpeter-is-right-brandeis-is-wrong-large-retailers-benefit-the-economy/

Header image: Supermarket self-checkout EDEKA E-Center Dürr Tauberbischofsheim 13.jpg by Triplec85, CC BY-SA 4.0, via Wikimedia Commons.