We have no particular view on the Asda and Sainsbury's merger. Consolidation in an increasingly competitive market doesn't surprise us and it's something which sometimes works, sometimes doesn't. We are though surprised at some of the reasons offered as to why it might be a bad idea. Take this from Neil Parish MP:
In a bruising session on Wednesday morning, Neil Parish, chair of the parliamentary environment food and rural affairs committee, told Asda’s chief executive Roger Burnley there was “no logic to this deal other than a financial fix for both of you”.
Finance is fairly important to capitalist organisations. Even to retail chains as House of Fraser, Poundworld, BHS and others have recently demonstrated. But it's this:
He said the companies were also likely to reduce staff at head office further down the line.
“You are going to run two separate things?… it’s unbelievable,” he said. “This is baloney … Six months or even a year further down the road it is going to be one system.”
Saving on bureaucratic and management overheads is a bad idea? We should be insisting upon companies having more people at head office?
Yes, obviously, there's the amusement at watching a farmer who has played politics for a few decades arguing business strategy with experienced CEOs. But getting the basic worldview so hopelessly wrong isn't amusing. The aim of all production being to destroy the jobs associated with making or delivering whatever it is. This reduces the costs of doing so and also frees up said labour to go and produce some other good or service. Increased labour productivity is, after all, the major determinant of future living standards.
We had to look this up but Mr. Parish is apparently a Conservative MP. Aren't we entitled to have at least those au fait with the reality that jobs are a cost, not a benefit, of production?