Have you heard about the problem with the supermarkets today?

I was reading an article for my macroeconomics class about the supermarkets getting pinched by the inflated food prices. The reason the article gave was because the commodities market was continuing on the incline. This is either a really good sign of the economy coming back or a really bad sign that the we are becoming more dependent on outside sources for raw materials and produce.

The article went on to tout Wal-Mart for have great prices for their ability to purchase entire crops of produce. They don't own their own farms but their buying power allows them to purchase that many crops. Some would say that this isn't fair. I say this is capitalism at it's best. Those that have buying power are able to drive a market in their direction.

The article also talked about the the 40 million people that are on food stamps. They said that those on food stamps cannot shop at places like Whole Foods because the grocer passes on the inflation to their customers. Well let me submit that buying organic costs more anywhere you shop. It's not just Whole Foods. Look at the "Green Wise" section at your local Publix. The prices of a loaf of brown rice bread is three dollars more than a regular loaf of white wheat bread. Capitalism would say that not being able to buy organic goods because of the cost is normal. I agree but not all do. Some call the higher cost greedy because they pass on inflation to the customers. Not at all. If they can sell it good for them. Oh by the way, Whole Foods has six times as many investors as regular supermarket chains does. They must be doing something right.

Now for the other side of capitalism, the competition. What is the competition doing while Whole Foods and Wal-Mart are getting fat using their own methods? They are letting their already slim profit margins get slimmer because they are not changing their prices to chase after inflation. This is where our citizens (and illegal immigrants) go shopping. They also go to Wal-Mart because the produce is cheaper and Wal-Mart is able to pass on their savings to consumers. Where they pass on their savings they also cut down on their quality. Publix and Winn-Dixie have fresher, better cut s of meat. So Wal-Mart might have great prices but, the quality of their goods are lacking. So take your pick, but oh wait, that is capitalism at work again.

The point of this post is not to rant about prices at the supermarket. The point of this post is to show you that capitalism works. If you can't afford something I'm selling but someone else is selling another similar product you can afford elsewhere, you will go to them. Before we sell out on socialism in America, let's understand how great capitalism truly is.
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