So those scurvy bums at Wal-Mart are finally getting what is coming to them! The state of Maryland will force all companies with more then 10,000 employees to spend at least 8 percent of their payroll on health insurance. Lots of companies have that many employees, but only one falls under the 8 percent threshold, which is you know who.
It is only the latest legislative blow dealt against the company that is finally accomplishing what everyone throughout all of human history dreamed of: plentiful food and goods available to all people in all places at low prices. What’s to complain about? This is the mystery that cries out for investigation.
That success breeds destructive attacks is part of business lore. A classic in modern libertarian literature, for example, is the poem “The Incredible Bread Machine” by R.W. Grant. It tells the story of Tom Smith, who invents a great machine to bake bread and package bread so cheaply that it could sell for less than a penny. “The first time yet the world well fed, And all because of Tom Smith’s bread.”
But then Tom Smith developed a problem: success. ARTICLE ON LRC
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It would serve the state of Maryland right if Wal-Mart “shrugged” and closed all of their Maryland stores. Of course, the people of Maryland might not be too happy about it, but they can always vote the bums out of office.
I have always liked Mick Farren’s “DNA Cowboy” trilogy, not least because of the varied economies and societies it describes, all supported by a sort of “incredible stuff machine” that is actually called “stuff central”. What that really is, is… well, that would be a spoiler, so I won’t tell you.
With interest rates by market set
Tom Smith the capital for bread did get.
But then the Fed did lower rates
Which set in motion different fates.
John Jones eyed Tom’s system right,
and so began the market fight.
But Jones could get the loan at less,
So his factories started causing Tom distress.
The cheaper loans for Jones thus led
to lower prices on his bread.
To early Tom from market borrow,
so had to say, “will close tomorrow”.
Meanwhile the folks at LRC
said “it’s just competition, see!”.
“Jones just makes his cheaper bread”
turning Mises on his head.
But the cheaper loans inflation caused,
and the lowered prices took a pause.
The Fed got scared and rates did raise,
so Jones to bankers more he pays.
The bread costs more now Tom is gone,
yet businessmen on Jones still fawn.
He played the rates and beat his foe
with prices artificially low.
Not better bread or better bakes,
but through money games – mostly fakes.
Yet freedom lovers will ever laud,
what ultimately will be proven fraud.
Enron was one of the best companies until it was found that they moved their debt off the books – if I don’t have to declare my existing debts, more credit is easy. The dot-coms were great business models, until they became bankrupt – yes some survive, but if I check back at the articles, I suspect the losers would be hailed more than the survivors. Even Amazon has a lot of bonds and other interesting things outstanding. Microsoft has a government granted IP monopoly (copyrights and patents on windows), yet is hailed as a model of comeptition. Wal-Mart? I don’t know how much is their better logistics and management (which was given by Sam Walton) – I’ll admit they were successful because they were run better than the competition for a long while, but how much of their success now is because they are better accessing the Chinese credit expansion and their cheaper goods?
In the exact same way, inflation feels good when it starts, but there is no free lunch. I would be cautious about saying how great Wal-Mart is. Many of the attacks are unfounded, but just because Wal-Mart is attacked doesn’t mean they are good guys. There are “Freddy v.s. Jason” type scenarios.
I don’t remember Microsoft doing anything for liberty until they were sued, and even now they seem only to want to astroturf for IP and against anti-trust, and I don’t see Wal-Mart doing anything to promote competition – I believe they like the overregulatory environment since they are best adapted to it. Because their (typically pre-existing small business) competition is overtaxed and regulated, when they move in over the city limit line, they can thrive. But is it because they are better businessmen, or simply less regulated?
I really don’t know. And I can attack the regulatory nonsense without giving a single word of praise to Wal-Mart. I think they are separate subjects. Why/How is Wal-Mart successful? If it is because they are better at providing consumer products in the market, great. If they are better at regulatory arbitrage and leveraging credit expansion, is that something libertarians should consider good?
(sorry for the misspellings and such, I’m at work and had to hack it out too quickly).
I agree to a certain extent. Wal-mart isn’t blameless. Their CEO Lee Scott recently called for an increase in minimum wage to help their customers living from pay check to paycheck. He later stated that Wal-mart already pays above minimum wage, which basically means he’s advocating a position that doesn’t affect them. I suspect it will affect more than a few of Wal-Mart’s competitors though.
I too have become skeptical of big business lately. Too often I find that they owe much of their success to government
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