Steve Horwitz is the Distinguished Professor of Free Enterprise, Department of Economics, at Ball State University
In considering the importance of the Amazon merger with Whole Foods, some history is helpful. The relevant historical context here is not just the history of those two firms, but the longer and broader history of the grocery industry. In particular, it’s helpful to see this merger as the next stage in a pattern of falling transaction costs and shifting specializations that have driven that evolutionary process. We can see how the two parties to this merger both came to prominence independently as part of that process, and how the merger is the natural next step.
At the start of the 20th century, many Americans still produced a good deal of their own food. Where the rest was purchased depended on where one lived. Small town folks had their general store while more…
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