Competitive Illusions

Recently, my significant other sent me out to buy a small, travel-size can of hair spray for a short trip we planned to go on. Needless to say, the drug store I went to did not have the specific brand she had requested and I, of course, had forgotten my phone so was unable to ask for further instructions. That led to a 20-minute detailed inspection of the four shelves of hairspray, trying to choose among multiple brands and multiple styles, before finally getting exasperated and deciding on the one that I thought would best suit my wife’s hair, only to be told upon returning home that any one of that myriad of choices would probably have been fine.

To be stymied by so many choices for hairspray was, for me, yet another example of the rampant consumerism that is destroying our planet. The metal and plastic containers, the plastic tops and nozzles, and the poisonous chemicals in the sprays themselves all create external costs that we ignore at our own peril. For others, this array of choices represents the abundance created by the “free-market” where competition responds to the demands and desires of their customers, a perfect display of capitalism at work. Unfortunately, that is an illusion. The hairspray market in the US is dominated by just a handful of companies — Unilever, Procter & Gamble (P&G), L’Oreal, and a couple of private-equity owned Unilever spinoffs — all of whom together control about 90% of the market. Unilever, P&G, an L’Oreal each individually sell hairspray under different brand names giving the impression of great choice and fierce competition but in…