Ah, I forgot to address another comment someone made early in the blog about entertainers, artists, and teachers having no apparent value according to the creado of the article, ostensibly because they do not produce material goods.

Entertainers, artists, and teachers do produce goods in the form of entertainment, art, and knowledge (duh). They don’t have to be tangible objects. Similarly, insurance companies provide a valuable, though intangible, service, and preventative healthcare is valuable for what it does not produce.

Nominally I would say I have no clue what this person was troubled by. I can understand exactly how valuable an entertainer, artist, or teacher is and pay for their products accordingly. If a comedien makes me laugh, I give him money. If a painting or sculpture pleases me, I buy it and put it in my home. If an education makes me more successful or happy, I pay the tuition and spend time studying. It is simple value arithmetic.

Perhaps the author was thinking in terms of state-supported entertainers, artists, and teachers who do not have to account for their enterprises to paying customers. If the author axiomatically accepts that the government should underwrite entertainment and education, then truly he has a dilemma because how do you objectively value such ephemeral products?

If collectivists have trouble determining what hard goods to produce, how much worse is the problem of deciding what art to fund? Beauty is in the eye of the beholder, and how can any beaurocrat be certified to know what is true and good and beautiful?

On the other hand, the arts flourish when governed by a market economy. Whatever is deemed true enough, good enough, and beautiful enough to be paid for is, for want of a better term, good art. If no one wants to pay for it with their own money, how can we claim it to be anything but worthless by definition?

It is striking how pervasive specious arguments are in our society. That was one of the points the article made–people are all to willing to accept the faulty premises of their opponents arguments rather than attack the illogical foundations.

Josh,

Picking your frame of reference is no less valid when Person does it than when you do it.

ALL large industries benefit from state interference on their behalf, companies you like as well as companies you don’t. Why pick on Wal*Mart?

I generally stay away from the Wal-Mart threads, because I think the issue is a) overblown, and b) more complicated than the partisans on either side are willing to admit. In sum, I don’t see Wal-Mart as a major problem, until recently with the minimum wage thing, because they didn’t lobby for their benefits (the eminent domain issue is complicated by the opposition’s use of similar tactics). They are generally just making the best of state-dominated market they are presented with, and do it with a minimum of selling to governments. So, again, I think they’re, at the very worst, the symptom of problems, as opposed to the source.

But,

“You would realize that whatever “benefit” they’re getting from the government, that input would be far, far, far cheaper if they could buy it on a free market. That “benefit” is a hindrance.”

So, in person’s world, welfare moms would receive better benefits to sit at home and churn out kids absent the state. The Robert Byrd outhouse on the appalachian trail would be furnished in platinum. The 15 administrative assistants in my school district would be making more than the $95,000.00 salary they are already making for their 30/hr a week jobs. Contractors on public works jobs are making less than they would in the absence of prevailing wage laws. Union members are actually making less than they would if companies were allowed to fire them if they went on strike.

Sorry. The world view that the current situation would be the same, just more, in the absence of state intervention is just too naive and simplistic. The reality is that the market is very distorted by the myriad state interventions. Some people benefit from them. Others are neutral, while the majority of people are harmed by state intervention. And yes, amazingly (apparently), industry (like society) has adapted to the state distorted market. Which means that industry would look very different in the absence of the state distortions. Refusing to acknowledge this is just plain obstinate, IMHO.

“Unfortunately, all you have to offer is the borrowed analysis of others, which, when refuted, you are unable or unwilling to defend. You’re wasting everyone’s time. Step up or step out.”

Anyone have a hand mirror I can borrow?

“The factories I have seen in China are just factories.”

…I was a young lad then, curious as all get out. I had heard, of course, who hadn’t?, about the infamous Gulag Archipelago in the, at that time, U.S.S.R.. I arranged for travel to Moscow, via Vienna, of course, so that I might have the opportunity to see, with my own eyes, the reported gargantuan garrisons gorged with gangerous gad-abouts.

When I arrived, at the Airport, the swellest guides met me, at the gate, to assist me in my pursuit. They were most gracious, very warm, and quite accomodating. We traveled for days and days and days…passing all sorts of farms, hamlets, large lakes, vineyards, pleasant peasants, factories filled with humming comrades, we traveled for mile after mile. It seemed we covered the Whole of the place, that, and my 14-day visa was about to expire—and I had yet to do Any Duty-Free shopping! Well, I can assure you from my extensive travels: There was not a single Gulag that I saw! I dare say, I doubt there were any, anywhere, in such a lovely place~

Please, and I have a nice mutual fund to sell you…

i do not believe that walmart will be remembered as a benefit to america.
consider:
walmart is banking on the undervalued yuan, something that is definitely not a natural “market” occurance.
in addition to this, walmart runs its relationship with its suppliers like a mafia don. this causes products to be sold below cost, and you end up with less profits to re-invest in the company and it’s products. so, we’re going to have a bunch of companies whose branding has been flushed down the walmart quality toilet.

b

Tunisia;

” low income people are the very reason for the existance of rich fat ones, it has alway been like that”

Read John Perkins’ “Confessions Of An Economic Hit Man”, and you will learn that you have it exactly backwards – too often poverty is caused or worsened by fat rich ones. But there’s no economic reason that everyone can’t be at least healthy and productive, only political ones.

I said “Wal-Mart has also advocated a higher federal minimum wage, presumably to try to ingratiate itself with the critics.”

Your response:
“You thought that one through pretty well didn’t you? Try this one: Walmart already pays above the minimum wage, you said that yourself. Its competition, however, often does not pay above the minimum wage. By lobbying for a higher wage, Walmart can drive its competitors out of business. Yay for the market economy!”

If you’ll notice, I make that statement as a criticism of Wal-Mart. I am recommending that they shouldn’t do this. So it is curious that you mock me as if I’m praising it. I am fully aware that they pay their employees more than minimum wage. And I agree that hurting competitors may be part of their motivation. Ingratiating themselves with their critics is also likely a motiviation.

“Or how about refusing to pay health benefits in order to drive employees onto Medicaid? You can say that this is a problem with government, not Walmart, but it goes towards showing Walmart’s success comes at the taxpayer’s expense.”

Wal-Mart doesn’t put anyone on Medicaid, the government does. You seem to have missed my point about the fundamental problem with health care being sharply rising health care costs. The solution is not to pressure companies to clean up the government’s mess.

“How about Walmarts use of eminent domain? Is that the market economy at work?”

No it’s not, and I’m against eminent domain. But it’s a minor point compared to the enormous benefit.

“And, finally, although I don’t have a cite for this one, I recall that Walmart actually threatened one of its suppliers that it would stop selling the supplier’s merchandise if it did not outsource production to China. Hooray capitalism!”

Although you are being sarcastic, you are correct. Maybe you should reread the jobs section.

“Not the first time the Mises Institute has gone IDIOTIC in defending Walmart. It makes one wonder what sort of donations Mises is getting from Walmart.”

I have never received a dime from Wal-Mart. I have no connection with the Mises Institute besides emailing them my article. But even if I did, this article would still be true.

Paul,

you advise: “Maybe you should reread the jobs section.”

From there: “But the unemployment rate in this country is about the same today as it was a hundred years ago. The actual effect of these shifts is a constant repositioning of human effort from less productive points to more productive points, and consequently an overall ability to produce more total wealth per person.”

You state the above as a tautology.

Would you care to explain its operative reality in our current economic structure?

Especially, this: “The actual effect of these shifts is a constant repositioning of human effort from less productive points to more productive points…”

“But the unemployment rate in this country is about the same today as it was a hundred years ago. The actual effect of these shifts is a constant repositioning of human effort from less productive point to more productive points, and consequently an overall ability to produce more total wealth per person.”

I don’t see how this is a tautology. “Either it will rain tommorrow or it won’t.” That’s a tautology. It tells you nothing. My paragraph tells you important economic facts.

Let me elaborate on the paragraph. Leftists often complain that some new piece of machinery will cause unemployment because it’s destroying jobs. If this caused long term unemployment then unemployment would be increasing all the time with every new machine that could do what a person had previously done. As Reisman points out, because of machinery, productivity of labor has increased well over 100 times in the last hundred years, but the effect of this hasn’t been to put over 99% of the workforce out of work. We’re not all sitting around with nothing to do because machines do everything. The actual effect is that we can produce more. It shuffles labor around in a constant flux. But total production of wealth and real incomes are going up with every increase in productivity and employment is not changing much.

There are problems with mass unemployment from time to time because of things like minimum wage laws and government empowered labor union coercion, but this has nothing to do with running out of things for people to do. Today unemployment is less than 5%. And this is with a much larger population. Shouldn’t all those people be replaced by machines by now according to the leftists?

This is why its a waste of time to worry about the economic system losing jobs. The people at businesses that close down because of Wal-Mart will find something else to do. The people whose jobs are “shipped over seas” will find some other jobs too. If they won’t, then why is unemployment so low? We’ve been shipping jobs overseas for many years and it’s still low.

The reason there will always be jobs is because people have an endless desire for more wealth. As we’re able to produce more, we don’t just quit, we take advantage of our ability and make more stuff for everyone. This is what causes the progressively increasing standard of living in our country.

Let me give an example. Say Wal-Mart finds a way to eliminate the need for cashiers. The cashiers could keep doing their jobs but it would be a waste of resources at that point. They would stop hiring cashiers and this job would disappear. But the money Wal-Mart saved would be invested somewhere else. Thus, Wal-Mart could produce everything that it could before, plus what they could make in the new areas of investment. Total capital and wealth increases. At each increase in total capital, new business opportunities become possible. The former cashiers will find employment in these new business opportunities or in jobs of people moving to these new business opportunities.

And most importantly, even the people who are temporarily displaced because of this process will benefit in the long term because of the constant increase in total wealth. Eventually their real incomes will soar past what it would be if this repositioning of effort were not allowed to happen.

Yes there is some unemployment because there is interference with market wages and labor union coercion and other government meddling. But if sending jobs overseas and shutting down businesses and using machinery caused long term unemployment then it would be rising higher and higher all the time over the long term. It is not. This is because the great majority of people who lose jobs from these changes find new ones quickly.

Oh, I think I see what you’re getting at. You’re saying they are going into government jobs. Well that’s probably true to a large extent. The government is growing. But increases in productivity don’t make the government grow. The government makes the government grow with increases in spending. Wal-Mart has nothing to do with that. And they can’t fix it by trying to preserve mom and pop stores or from refraining from “shipping jobs overseas.” The government is bidding people away.

If the government weren’t growing, the people who lost jobs from increases in productivity would quickly find jobs in private business. It’s hard to say exactly what these jobs would be because we can’t predict the direction that the economy will go. As I say in the paper:

The possibilities for new products, businesses and entire industries are infinite. Just as it would have been difficult for someone a hundred years ago to imagine all the things that our economy does today, it is difficult for us to imagine today all the new things that the economy will do in the years to come.

Most people couldn’t have predicted the Internet just a few years ago; since then, it has totally reshaped our economy. In addition to the potential of new technologies, there is unlimited potential for employment in the already existing lines of production. Virtually everyone would like to have five to ten times the real income he now has. Almost everyone would like the larger homes, the second and third homes, the swimming pools and tennis courts, the luxury cars, the better wardrobes, the restaurant meals, and the travel that is today enjoyed almost exclusively by the very well-to-do. The production of these goods in the quantities people would like to have of them, using today’s methods of production, would require more labor than people are capable of performing. As the productivity of labor rises, more labor is made available to expand the production of what had previously been luxuries. The only thing that prevents us from taking advantage of possibilities like these is the lack of available resources to devote to them. As increases in productivity free up resources, the economy will always expand into new areas.

People who complain about American manufacturing jobs being “exported to China” (odd how this did not seem to happen when Mao was running the place as a socialist paradise), never seem to favour changes in policy that would favour American manufacturing.

When do they go out attacking the level of business taxation? Or demanding that regulations be repealed?

And when do they denouce the laws that try and put labour (as we spell labor on this side of the pond) unions above the law of contract or prevent employers sacking union activists.

If Mr Smith does not wish to employ Mr Jones because Mr Jones is a union activist that is up to Mr Smith. If Mr Smith does not wish to employ Mr Jones because Mr Jones has blue eyes that is up to Mr Smith.

If Mr Jones does not like it he can go work for someone else or (horror of horrors) set up his own business (in a small way at first no doubt). If a union is really “good for long term jobs” then business enterprises would welcome unions and silly people like Mr Smith (who did not welcome them) would be outcompeted by the companies that were unionised.

In fact unions are no good for long term wages and conditions (any more than they are for jobs)- because unionized industries tend to decline over time (due to what W.H. Hutt called the “Strike Threat System”, with union activists and leaders trying to tell people how they should run their business), so if people really cared about manufacturing they would oppose unions.

After all if unions really are good at running business enterprises they should set up their own (they could use union pension funds as the capital).

But NO – all the taxes and regulations and labour unions must stay AND “American manufacturing jobs” must not be “exported” either.

It is silly.

Although it should be kept in mind that running a manufacturing business in the United States is not as difficult as it is, for example, in Britian.

Taxes and regulations were bad enough under the Conservatives – but in recent years “New” Labour has introduced endless new hidden (“stealth”) taxes and there has been a vast tide of new regulations.

Sadly the Conservative Party in Britian seems to base itself on President Bush in the United States – a man who has never met a regulation or a spending program he did not like.

Let me add a few late comments that support part of the position taken by M E Hoffer about Walmart’s reliance on cheap products produced by slave labor in China. I have no idea of the actual size of the slave labor pool in China or the degreee to which such pool is involved in producing the goods acquired by Walmart, but the point reminds me of the general phenomenon frequently arising when markets from highly developed economies encounter supplies from markets that are essentially unregulated (either by sophisticated private property rights regimes or states) – either lawless or subject to common property rights regimes. The new demand frequently swamps the prior management regime, an ineffective regulaton results in overexpolitation in the supplying market. Competition from the home market is unfettered in the new market, leading to a race to extract resources while they are available.

Classic examples are the fur and feather industries, but the lack of effective water, ground and water regulation (resulting from ineffective property rights, state ownership and stae action on behalf of industries) in China means that all Chinese manufactured goods are in effect subsidized, at the cost of tremendous environmental problems being felt mainly in China but are gradually spreading regioanlly. By providing sufficient protection of investments, China is attracting growing investment, but it is coming at a huge cost.

The lack of meaningful environmental regulations make Chinese products artificially inexpensive on global markets and in turn dampens production and jobs in the US and elsewhere, while sucking in those jobs. However, it remains in the rational self-interest of US retailers and manufacturers to purchase from this cheap source of supply – Walmart included.

China’s growing demands in turn export the same problems elsewhere in Asia (such as the “protected” forests of SE Asia, which are being rapidly stripped and the wealth pocketed by kleptocrats).

My view is that, aside from providing consumer information and allowing consumers to make choices, it would be good US policy to work with other developed nations to encourage better resource management in developing markets. Consumer branding and policy efforts should particularly focus on countries where resource management is in the hands of a few, rather than private or community ownership. In some cases, coordinated actions such as embargoes may be appropriate.

As for China, excuse me for introducing another thought. Some of you may realize that, when the US walked away from the Kyoto protocol, we also through our hands up at insisting that China and India also submit to meaningful GHG emissions caps. Such caps would have forced China to use energy much more cleanly and efficiently, using more recent technology to be supplied by the US, Japan and Europe. China naturally would have resisted, but our trade policy could have been very influential. While this would have raised energy costs in China, it would have made a significant dent in the dramatic increases in GHGs coming from China (for which trhe whole world will pay) and probably have offset most of the local and regional environmental costs as well. By doing nothing, we are effectively subsidizing China’s economic development by environmental damage that will be borne locally, regional and globally over many generations. The Chinese are building dirty coal-fired plants like they’re going out of style. (Out of some concern for the environment and coal supply, they are also building nukes – I won’t broach liability and other issues.)

And what other tact has this Administration taken to China? Instead of Kyoto, we have the Asia Pacific Partnership, which is a way for our government to provide SUBSIDIES to China and India to get them to buy clean technologies. Isn’t that neat?

TT

I think this pro-WalMart analysis is really useful, but I wish that it also included some not-so-perfect aspects.
WalMart does benefit from subsidies, tax breaks, eminent domain and also lobbies for regulations which hinder its competitors (as Wild Pegasus called out with such “passion”).

That does not make WalMart a good or an evil company; I just wish that critics of WalMart would attack these legitimate problems rather than see wrongdoing in the wealth-producing business practices.

Nine times out of Ten I will guess this site is powered by Blogengine. Mostly because there are a lot of not really related comments people posted. You do run a wonderful website, but I strongly recommend to call the cleaner here because there is a lot of sp** posts here Well, till you get this done bye =)

Wonderful post, I just bookmarked your site and Ill definitely be back in the future. – Diabetes Glucose Monitoring