▪ The evolution of retail, including the rise of department stores, chain stores, big box stores, and now online marketplaces, is a story of “creative destruction,” a term Joseph Schumpeter coined to describe the relentless process of disruptive and beneficial innovation.

▪ Online marketplaces, the newest retail business model, contribute to the rising labor productivity of electronic shopping and mail-order houses, which has surpassed the labor productivity of big box stores in recent years.

▪ The history of creative destruction in retail follows a pattern: 1) Disruptive innovations attract consumers, reducing incumbents’ market share. 2) Disgruntled incumbents call for intervention. 3) Enforcers respond with regulations, including antitrust, to thwart disruption.

▪ Today’s resurgence of antitrust populism runs the risk of repeating historical antitrust errors that primarily focused on protecting inefficient incumbents at the expense of retail shoppers.