The Ultimate Pro-Wal-Mart Article
Wal-Mart's critics, writes Paul Kirklin, are oblivious to the fact that Wal-Mart is responsible for a significant increase in total wealth, and that the greatest beneficiaries of this increase are those with the lowest incomes. Wal-Mart is one of the great shining examples of what a market economy can achieve. The critics are utterly ignorant of economics, yet they pretend to be authorities on the subject, and loudly proclaim that Wal-Mart causes unemployment, lower wages, reduced access to healthcare, in addition to destroying communities and promoting greed. To listen to the critics, one might think that Wal-Mart was the source of all evil. FULL ARTICLE
Comments (77)
Mitche Leigh Hunt
An oliogopoly -- with or without a smiley face --is still an oliogopoly!
Published: June 28, 2006 9:01 AM
Stephen W. Carson
This article has been posted on Digg. Please digg it!
Join the libertarian diggers by e-mailing me (Stephen at RadicalLiberation.com).
Published: June 28, 2006 9:07 AM
Bill
Wal Mart has failed the Amereican people by not expending resources to counter the stern opposition to their establsinemt of supercenters in some California locations: It would seem Wal Mart would defend it's right to establish supercenters on a constitutional basis.
What right does any regional government have to restrict the proliferation of any legitimate buisness?
The intrusion of governments into the regulation of buisness is counter to the fundimentals of free enterprise: It would seem an exemplary corporate citizen with the resources of Wal Mart would defend it's right to conduct buisness in the manner it chooses!
Wal Mart, the time has come to concern yourself with your very survival: Or are you structuring an organizational change thus capitulating to bureaucratic pressures?
Published: June 28, 2006 10:00 AM
Matt Day
I really enjoyed reading your argument. I don't know how often I find myself defending the same points that you made with some of my lesser informed friends. However, I wish you would have touched on some of the fall-backs of Wal-Mart's management policies. Most importantly is the way they use eminent domain to acquire property for their stores. I was wondering what ideas/research you had on that.
Published: June 28, 2006 10:02 AM
Don B
Oligopoly? Throw away your undergrad econ textbook and start thinking.
This is great article for anyone who wants to have an intelligent thought on Wal-Mart.
Per Matt's comments, it is definitely too bad that Wal-Mart doesn't take a principled stand against the crime of eminent domain. They have the power and profile to make a powerful statement, and it is not only the right thing to do, it would probably have some positive pr benefits as well.
Tipping their hat to a minimum wage increase since they know it will hurt their competitors more than it hurts them is also unfortunate.
Published: June 28, 2006 10:17 AM
D Diab
Mr. Kirklin, I agree that Wal-Mart is often attacked unfairly by people who either misunderstand, or purposely distort what Wal-Mart does and basic economic principles as well, but unfortunately there has been a tendency recently by Wal-Mart defenders to do the same. You discuss the concept of wealth in your article stating wealth "is material goods that have been produced by human labor." That seems to go contrary to the idea of subjective value in economics. If I do not like the way a Wal-Mart store looks, and think their advertising overly nationalistic that reduces my wealth and has nothing to do with the production of material goods. By your defenition it seems, entertainers, artists and teachers would be completely economically unproductive since they are not producing material goods. And even taking the definition of wealth as material goods, there is value differences (subjectively imputed) between products for example Wal-Mart clothes and jewelry often fetch a much lower price than products of higher end stores though they differ little materially. I also take issue with the assertion which is constantly made by defenders and opponents of Wal-Mart that they have the lowest prices. On most items they sell better prices can be found on the Internet, at ultra-discount stores and at supermarket's when they have sales (which is practically everyday). It seems Wal-Mart has the lowest average price, which is important if you only want to shop at one store. I think most of the attacks against Wal-Mart are unfounded (i.e. their wages, benefits, tough negotiating, etc.) but their contribution and virtues are often embellished by those trying to defend them.
Published: June 28, 2006 11:04 AM
Lew Goudy
I agree with most of the article but would like to
garnish the posts re eminent domain and the minimum
wage with a personal anecdote. I went to Walmart
to buy ten gallons of beer. The clerk demanded I
fill out a paper form apprising the NM liquor board
of the transaction, to include sensitive personal
information (address, DOB, etc). The form indicated
its filing and retention for six months was needed
in order to obtain a container of beer of six or
more gallons. I refused. The clerk was nice about
it and summoned her supervisor. The supervisor
was not nice about it. She said that the six
gallon figure was wrong: the hurdle was twenty
gallons in a single transaction. I said ok I
have only half that. She wouldn't take my word
for it, and her calculator availed nought since
she didn't know how many ounces were in a gallon.
After some fifteen minutes of tutoring in grade
school math she suggested that I fill out the
form even though I didn't think it was required
"to save time".
That stuck with me, that they preferred I should
take an avoidable risk of identity theft simply
for (their) convenience and expedience, even
though the explicit policy posted at the store
entrance claimed they were committed to protecting
the privity of my transactions with them, except
as required by law.
They don't walk their talk. It took a hour to
get that beer bought and when she finally snapped
"You're fine" we were both furious. Probably all
in a day's work for her but it left me unable to
take food or rest for two days. So much for
"customer-friendly service"--I don't like the kind
of friendship where you have to bend over.
Published: June 28, 2006 11:18 AM
Francisco Torres
The clerk demanded I
fill out a paper form apprising the NM liquor board
of the transaction, to include sensitive personal
information (address, DOB, etc).
Your quarrel should be with the local government, instead of the supervisor. Why would you need to sign some bureaucrat-mandated paper in the first place to buy something? Government placed that supervisor and you in a tight and uncomfortable spot - and that is what government does, create havoc where none should exist.
Published: June 28, 2006 12:45 PM
JD
I agree with many of the points in your article, but I find it amusing that its publication coincides with the release of this poll:
"June 28, 2006-
Sixty-nine percent (69%) of Americans have a favorable opinion of Walmart, including 29% who have a very favorable opinion of the retail giant....The reviews are even better among those who have worked for Walmart (or have family members who have been employed by the firm). Among these workers, 79% have a favorable opinion of the company"
http://www.rasmussenreports.com/2006/June%20Dailies/walmart.htm
Published: June 28, 2006 12:47 PM
JimB
Just want to ask the critics how raising expenses makes people richer ...
I imagine they launch into "expenses are someone's income": yeah, but if that person has higher expenses because of higher costs, in fact if we ALL have higher expenses because Wal-Mart has been hammered, then aren't we all poorer?
Duh.
Published: June 28, 2006 1:20 PM
Tom Alvarez
There should be a law making this article required reading for all citizens. Bravo!
Published: June 28, 2006 2:49 PM
rene
Officials From Flooded Northeast: 'The Worst' is Yet to Come
what do you think about this development
Published: June 28, 2006 3:26 PM
Anonymous
Once again, the Mises Institute defends state-capitalism. Wal-Mart is a total creature of the state ([url]http://www.reclaimdemocracy.org/independent_business/walmart_eminent_domain.html[/url]). It has been using corporate welfare and eminent domain to get to the top, while small businesses are swamped with regulations and given zero perks.
This is 'vulgar libertarianism' as Carson calls it--defending the rich and powerful solely to defend the rich and powerful, regardless of how many libertarian principles it violates. When all else fails, simply state that your critics are "ignorant of economics." Typical.
Published: June 28, 2006 3:55 PM
M E Hoffer
Anon., above, makes a cogent and accurate observation. WMT is truly a creature of the State. One only has to go back to '93-'94 timeframe to see where the beginning of the huge influx of imported goods(from PROC), path cleared by the Clinton admin., jump-started the parabolic growth of the Wal-Mart we know today.
Personally, I find this author's lack of mention of the source of the great many products, and the conditions under which they were made, rather curious. I would think that WMT would be more than willing to "drop the cloak" and allow real-time web-based video feeds of their suppliers manufacturing facilities if they were, in fact, a symbol of "all that's right w/ "capitalism"".
Maybe the good Author would care to enjoin such an idea and/or posit a plausible excuse for its rejection(?)
Published: June 28, 2006 4:19 PM
Doug
Just wondered if you think that a corporation has any other moral responsibility than to buy and sell at the lowest price as long as they are "legal"?
Published: June 28, 2006 4:20 PM
Wild Pegasus
Wal-Mart:
* soaks up hundreds of millions in direct subsidies
* gets millions more in wildly unfair tax breaks
* steals tens, perhaps hundreds of thousands of acres of land through public domain
* buys most of its products in blatantly corporatist China
* gets free access to the interstate highway system
Fuck them and their "free-market" defenders.
- Josh
Published: June 28, 2006 4:25 PM
Paul Kirklin
The good author will respond to your point M.E. Hoffer. The reason I did not explain the beneficial effects of so-called sweatshops is because I cannot address every criticism made against Wal-Mart in the limited space that I had. I addressed the ones that I considered to be the most fundamental.
Sweatshops are beneficial because they improve the standard of living in the places where they are installed, and because they lower the cost of goods (raising real incomes.) A business can only persuade people to work for it by offering something that is better than a potential worker's alternatives. A "sweatshop" may seem like miserable conditions to you in the US, but in poor countries, they offer something better than existing alternatives. As more companies move into a poor area, they will have to bid up wages and conditions higher and higher in competition with eachother. Cheap labor is what attracts companies to come in and help raise the standard of living in the first place. If we ban foreign "sweatshops," then many poor areas will have fewer employment alternatives for workers and they will find it much more difficult to lift themselves out of poverty.
In response to Doug, yes companies have a moral obligation to refrain from violating the rights of others.
Published: June 28, 2006 4:38 PM
Person
Wal-Mart: ... * gets free access to the interstate highway system
Yep, "foul" everyone who has and uses free access to the interstate highway system. They're obviously criminal and any business success they had obviously wouldn't have happened without the state.
Everyone is a statist. Everyone should be looted for that crime.
Wild_Pegasus, I think you got a wee bit too carried away there.
Published: June 28, 2006 4:39 PM
Yancey Ward
Several commenters have complained that WalMart uses eminent domain. This is not true. WalMart may benefit from its usage, but it is government that actually wields the power.
Published: June 28, 2006 4:40 PM
Person
I have one more question for everyone who likes to play the game of "ooh, look at this one state intervention that appears to help Wal-mart and ignore all the others that hinder it, so obviously Sam Walton would have been incapable of success in business without the state":
If some anti-statist movement was able to achieve some success, would you say, "Obviously, they had an immense subsidy due to their ability to freely travel on the interstate highway system, so any success they can claim must be due to the state." ?
No, no of course you wouldn't. If you made the first claim about Wal-mart, you're probably not mentally capable of maintaining that much consistency in your positions.
Published: June 28, 2006 4:52 PM
M E Hoffer
Paul,
My point goes beyond "mere Sweatshops".
See: http://www.fas.org/spp/starwars/congress/1998/s980514-dod-3.htm
for fuller context.
"Maybe the good Author would care to enjoin such an idea and/or posit a plausible excuse for its rejection(?)"
Also, you are evading this : "I would think that WMT would be more than willing to "drop the cloak" and allow real-time web-based video feeds of their suppliers manufacturing facilities if they were, in fact, a symbol of "all that's right w/ "capitalism""."
"Maybe the good Author would care to enjoin such an idea and/or posit a plausible excuse for its rejection(?)"
Published: June 28, 2006 4:55 PM
M E Hoffer
In response to Doug, yes companies have a moral obligation to refrain from violating the rights of others.
Posted by: Paul Kirklin at June 28, 2006 04:38 PM
Published: June 28, 2006 4:56 PM
Vince Daliessio
Man, am I SICK of the love Wal*Mart / hate Wal*Mart on this site.
In a perfect libertarian paradise, Wal*Mart (or something like it) would likely exist. If it didn't accept government handouts, and didn't use eminent domain, or violate any other free-market tenet, you critics would still point out that it uses sweatshop labor, uses the highway system (horrors), or otherwise is "bad". OK, enough, we get it.
Can we stick to the economic analysis at hand here?
Published: June 28, 2006 5:02 PM
Wild Pegasus
Yep, "foul" everyone who has and uses free access to the interstate highway system. They're obviously criminal and any business success they had obviously wouldn't have happened without the state.
They might have had business success, but certainly not on the scale they have it.
Compare the damage done by trucks to the damage done by cars. Trucks cause significantly more damage to highways than cars, for obvious reasons. So, are trucks and trucking companies paying more in taxes due to the damage they cause? No, of course not. This is a subsidy. A free market highway system, if such a creature could even exist, would have to charge trucks much more for access due to the extensive damage they cause.
Several commenters have complained that WalMart uses eminent domain. This is not true. WalMart may benefit from its usage, but it is government that actually wields the power.
So they're just holding the bag while the government holds the gun. Gotcha.
If some anti-statist movement was able to achieve some success, would you say, "Obviously, they had an immense subsidy due to their ability to freely travel on the interstate highway system, so any success they can claim must be due to the state."?
Wal-Mart is obviously successful at exploiting these advantages better than their competitors. Should we praise them for winning a game with rigged rules?
- Josh
Published: June 28, 2006 5:03 PM
Wild Pegasus
Vince,
I get tired of hearing a corporate welfare queen praised as the bastion of the market economy.
- Josh
Published: June 28, 2006 5:05 PM
Paul Kirklin
"I would think that WMT would be more than willing to "drop the cloak" and allow real-time web-based video feeds of their suppliers manufacturing facilities if they were, in fact, a symbol of "all that's right w/ "capitalism""."
Maybe the good Author would care to enjoin such an idea and/or posit a plausible excuse for its rejection(?)"
I would be happy to. The reason that Wal-Mart doesn't put cameras in its suppliers manufacturing facilities is because when people see the miserably bad conditions in these facilities they would mistakenly interpret this to mean that Wal-Mart is responsible for their low standard of living. They would make the same mistake that you are now making, which is to think that "sweatshops" are lowering the standard of living when in actuality they are raising the standard of living above even worse alternatives.
Published: June 28, 2006 5:09 PM
Anonymous
You Wal-Mart defenders are all spineless, worthless shills for corporations, with no principles whatsoever. Never before have I seen so many blind defenders of the state on a supposedly "libertarian" blog.
So state-sanctioned, state-funded sweatshops are a good thing, eh? According to Paul Kirklin, sweatshops are heavenly structures for the poor. About eight seconds worth of research puts an end to that tired myth.
http://mutualist.blogspot.com/2006/04/free-market-attack-on-sweatshops.html
http://www.coopamerica.org/programs/sweatshops/sweatshopnews.cfm
http://www.laborrights.org/press/Wal-Mart/speakingtour_dailyiowan_111605.htm
And let's not forget when Exxon raped, tortured and murdered workers in Indonesia (http://news.bbc.co.uk/1/hi/world/asia-pacific/1401733.stm) Whoops! Silly me, I forgot--corporations are always angels. Surely, being raped, tortured and murdered was the best available alternative for the workers. It's a free market, dagnabbit!
Published: June 28, 2006 5:14 PM
Paul Kirklin
Obviously raping, torturing, and murdering should be against the law for anyone. I'm talking about being free to offer someone something he voluntarily agrees to take as payment for his services. Anyone not happy with the conditions of working at a business should be allowed to quit. If that's being violated by anyone I'm against it.
Published: June 28, 2006 5:21 PM
M E Hoffer
Paul,
"My point goes beyond "mere Sweatshops".
See: http://www.fas.org/spp/starwars/congress/1998/s980514-dod-3.htm
for fuller context.
Yourself: "I'm talking about being free to offer someone something he voluntarily agrees to take as payment for his services. Anyone not happy with the conditions of working at a business should be allowed to quit. If that's being violated by anyone I'm against it.
Posted by: Paul Kirklin at June 28, 2006 05:21 PM
Those people, referenced in the link, are hardly free-agents. And, that scene is still well extant in the PROC today.
"Maybe the good Author would care to enjoin such an idea and/or posit a plausible excuse for its rejection(?)"
Published: June 28, 2006 5:37 PM
Paul Kirklin
Now you're talking about forced labor. That's slave labor. I'm 100% against that, and I condemn any government that enforces it. I don't think companies should use slave labor under any circumstances.
Published: June 28, 2006 5:44 PM
Shane
I have a hard time thinking of Wal-Mart as a "shining example" of market economics. First, Wal-mart is a corporation -- a business that has purchased "limited liability" protections from the government, in the form of a "corporate license". Corporations (in the "limited liability" sense; not the formal, "corporate structure" sense) wouldn't exist in a truly free market.
Too many "free-market" libertarians seem to forget (or fail to realize) that Adam Smith's _...Wealth of Nations..._ was the premiere anti-corporate manifesto: The free market was conceived as a way of protecting against the unholy marriage of business & government. I'm no economist, but I'd venture to guess that the issuance of corporate licenses represents the single-biggest intrusion of government into the economy today.
Second, let's not forget that Wal-Mart is one of the nation's largest beneficiaries of eminent domain abuse. The company seems to have no problem asking local governments to grab up private property & transfer it into their hands.
Let's not all line up to be corporate cheerleaders, just because it's the opposite of what the socialists are doing. Wal-Mart is no hero, in my book.
Shane Steinfeld
Minister of Truth for the
Bureaucrash Activist Network
Join the Resistance...www.bureaucrash.com!
Published: June 28, 2006 5:51 PM
quincunx
"And let's not forget when Exxon raped, tortured and murdered workers in Indonesia"
Looks to me that that it was the Indonesian Army that did those things.
"Never before have I seen so many blind defenders of the state on a supposedly "libertarian" blog."
You haven't been here before. The 'corporation' as a state charter and the default position of 'limited liability' has been well discussed on this board. Although they are state creatures, they need not be, and can be created voluntarily in a free market.
The libertarian faces a big problem in debate. NOTHING is left untouched by the state. If one can not point out some positive things here and there, then one can't make a move towards freedom. One always has to concede that well yes this is mostly good, but there is the downside (but it is the state!).
I don't see a way to escape this.
"You Wal-Mart defenders are all spineless, worthless shills for corporations, with no principles whatsoever. "
It's easy to say that when you haven't offered anything yourself. You have nothing to defend because you have not proposed anything. And even if you did, some other person will just point out the myriad of flaws in your system, which you will just ignore.
"It's a free market, dagnabbit!"
What is that even supposed to mean?
If my neighbor comes over and clubs me over the head, is this a free market failure? or just a crime?
"Wal-Mart is obviously successful at exploiting these advantages better than their competitors. Should we praise them for winning a game with rigged rules?"
How do you know that? You seem to assuming an absolute size measure. What about other retailers? Maybe some get more profit %, even though less overall revenue.
" A free market highway system, if such a creature could even exist, would have to charge trucks much more for access due to the extensive damage they cause."
Well it did exist sans trucks in the early 1800s (~3500 mi of private roads). Vehicles were charged for their tire width and number of axles.
BTW, toll booths charge for axles even today (at least in my corner of the country).
Unless you have a problem with this example because technically, the state was around - so it might have subsidized someone somewhere which could have effected this in some vague marginal sense.
"So, are trucks and trucking companies paying more in taxes due to the damage they cause? No, of course not."
But how do you know that THIS subsidy outweighs their other taxes? Don't tell me that you can measure net tax consumption with precision!
Otherwise why are you not in business selling comprehensive charts to show this? It seems that there is a good market for unraveling such things, especially to libertarians.
Published: June 28, 2006 6:19 PM
Anonymous
"Obviously raping, torturing, and murdering should be against the law for anyone. I'm talking about being free to offer someone something he voluntarily agrees to take as payment for his services. Anyone not happy with the conditions of working at a business should be allowed to quit. If that's being violated by anyone I'm against it."
Then maybe, just maybe, you shouldn't write an extensive article that praises state-capitalism and forced-labor camps, and assume that anyone who disagrees with you is "utterly ignorant of economics." And in many places, it is incredibly difficult for a worker to quit if he doesn't like his job. Many corporations sieze land and farms that are already being used by other workers, meaning that there isn't much of a choice whether to work for them or not. Other corporations refuse to pay workers for a very long time, so that they can't quit (or they get none of the pitiful amounts of money they earn).
http://www.nlcnet.org/campaigns/china/wp/index.shtml
Take a gander at this article. This worker was literally worked to death in a sweatshop not much different from the ones Wal-Mart owns. This worker COULD NOT quit, because the company refused to pay her on time. Read about the totalitarian conditions in this place (even the most hardcore laissez-faire supporter will be wincing while reading this thing). Truly sickening.
Published: June 28, 2006 6:25 PM
M E Hoffer
Paul,
With this : "Now you're talking about forced labor. That's slave labor. I'm 100% against that, and I condemn any government that enforces it. I don't think companies should use slave labor under any circumstances."
Posted by: Paul Kirklin at June 28, 2006 05:44 PM
Two things: 1) That was the same link I posted, twice, in an effort to provide you fuller context for my original point. 2) If you really believe what you say : "I don't think companies should use slave labor under any circumstances.", then you should revisit the main thesis of your article, check many of your premises, and fully research the source of many of the products WMT sells.
I suspect that you will, rightly, come to a much different conclusion about the various "glories" of WMT.
Published: June 28, 2006 6:29 PM
Richard Garner
I am wondering something here.
Now, the anti-walmarters have a point that part of that way Wal-Mart is at present is the result, not of successfully operating on a free market, but of successfully gaining patronage of the looter state.
However, they obviously accept the premise that state intervention, say, in the form of subidies, gives its recipient an advantage over anybody that doesn't recieve such a subsidy. So, if Wal-Mart did not recieve a subsidy, it would be disadvantaged thus far compared to its competitors that did get subsidies.
Add to this the premise that Wal-Mart has no means of preventing its competitors from trying to get subidies were it to not try to do so itself.
Given this, Wal-Mart must either try and get subsidies or fail compared to its competitors. This is not to say that its attempts to get subsidies, and its success at doing so is justifiable, morally. It is simply to say that unless all business people suddenly decide to be good and morally upright and not try to get subsidies, it is in the interest of all of them to try, for fear that others will if they don't. Absent some enforcement mechanism for preventing them from not being morally upright, they must try to do so or die.
Published: June 28, 2006 6:52 PM
quincunx
"Then maybe, just maybe, you shouldn't write an extensive article that praises state-capitalism and forced-labor camps, and assume that anyone who disagrees with you is "utterly ignorant of economics.""
Anon, you put yourself in a tight corner, since you can't praise ANYTHING as long as nation states exist. Period. Your examples show CRIME, fully backed by corrupt governments. If you want to solve these, you must protest their dictators.
All your examples are fallacies of composition.
Maybe we should condemn ALL anarcho-socialists because of the crimes of a few?
" This worker COULD NOT quit, because the company refused to pay her on time."
That is the number one reason to QUIT!
She should've went to court - oh wait the country is run by dictators, THERE is your problem.
"and assume that anyone who disagrees with you is "utterly ignorant of economics.""
I think it is obvious to see that your minority anti-WalMart views were not addressed. This is a strawman.
"Many corporations sieze land and farms that are already being used by other workers"
And who is the broker in this transaction? I think you know.
Published: June 28, 2006 6:54 PM
anonymous
This is just absolutely unbelievable. I simply cannot believe that I am being denounced on a "libertarian" blog for opposing state-capitalism. Oh, wait a sec, actually, I'm not surprised in the least.
Anon, you put yourself in a tight corner, since you can't praise ANYTHING as long as nation states exist.
And you put yourself in a tight corner by praising EVERYTHING as long as nation states exist. According to you, any corporation that makes a living by hopping in bed with the state is just as innocent as can be. Poor, poor corporate fatcats! I feel soooo sorry for them--being denounced for working with the state and stealing at gun-point.
That is the number one reason to QUIT!
These folks are already barely making enough to money to live. They can't simply "quit" and turn down all the money they've earned, just because they aren't being paid on time. Pro-corporate libertarians (all of them, basically) are always the first to demand state-action if an employee violates a contract with an employer, but when it's an employer violating a contract with an employee, they don't think the employer should be punished at all. It all goes back to the idea that blindly defending the rich and powerful is automatically libertarian, no matter how hostile it is towards free-market principles.
I think it is obvious to see that your minority anti-WalMart views were not addressed. This is a strawman.
Let's see, here. The article flatly states, "The critics [of Wal-Mart] are utterly ignorant of economics..]" Hmmm. Not sure how that could possibly be taking anything out of context..
But forget it, it's not even worth debating any more. It's obvious that libertarians are more than loyal to the state, except when it goes against their own interests. Libertarians are complete hypocrites, which is why nobody on the left will ever join their movement.
Published: June 28, 2006 7:34 PM
JCR
Come on! The United States is more a socialist country than a capitalist country.
Published: June 28, 2006 8:34 PM
Person
Wild_Pegasus:
They might have had business success, but certainly not on the scale they have it.
Certainly? Certainly? I guess in all your moral indignation, it never once occurred to you that maybe government intervention is more of a hindrance to Wal-mart than a support? Could you for moment just contemplate that possibility? That maybe without government intervention in the transportation system, maybe their methods would have been even more successful? Or maybe the intelligence of Sam Walton maybe, just maybe, wouldn't have entered a blue screen of death if political/market conditions were different, but would have adapted just the same?
You did consider those possibilities, right? Well, what was your reason for rejecting them? I'd really like to hear. I may learn something, although, to be quite honest, I'd be surprised if you actually have considered those possibilities.
Wal-Mart is obviously successful at exploiting these advantages better than their competitors. Should we praise them for winning a game with rigged rules?
We should praise them for being able to satsify real consumer needs, even despite the numerous barriers government throws up to commerce in general. Wal-mart did not *create* those barriers; they can hardly be held responsible. Sam Walton is not the reason people are infected with this intellectual disease of trying to "manage" economies through state intervention. No, the blame for that lies squarely on the shoulders of the voters who support these policies. Vilifying them is like vilifying the prisoner who smuggles in goods. Yes, the prisoners he servers are not there volutarily; yes, they decide under duress. But unless that smuggler was responsible for their state, he is no villan for offering them better choices within the condition into which they did not enter voluntarily.
Published: June 28, 2006 9:09 PM
cynical
So we should blame Wal-Mart for the existence of (bad) government? I don't think Wal-Mart created, nor is responsible for the continued existence of, the government.
Published: June 28, 2006 9:28 PM
Blah
If I do not like the way a Wal-Mart store looks, and think their advertising overly nationalistic that reduces my wealth and has nothing to do with the production of material goods.
If I paint my car a color that you don't like, has that reduced your wealth? No, because my car is not a part of your wealth. Likewise, Wal-Mart has not reduced your wealth. At most, you can argue that they have not increased your wealth because your tastes are not mainstream, but does that really impact any of the author's points?
According to you, any corporation that makes a living by hopping in bed with the state is just as innocent as can be.
Corporations are not responsible for policing the State. Also, sometimes a corporation can make things worse by standing up to the State, because if the State bans the corporation from doing business, that screws the employees and the consumers in that area as well.
We're talking about a pretty gray area here (i.e. When a state commits a crime, how much of the blame falls on corporations for not stopping, or even aiding, the state?). In my opinion, to say that it seriously hurts the author's thesis is insane, and not worth debating further.
Published: June 28, 2006 9:31 PM
Peter
These folks are already barely making enough to money to live. They can't simply "quit" and turn down all the money they've earned, just because they aren't being paid on time.
Let me get this straight: they can't afford to quit, because then they won't get paid; but if they don't quit, they aren't getting paid anyway, and somehow they can afford that?
Published: June 28, 2006 10:24 PM
Paul Marks
There is a lot of stuff here, I will try to deal with a few points.
First "Walmart is a corporation".
Limited liability goes back a long way before the limited liability statutes of the 19th century. There have long been ways by which people can put money in pot (as it where) and set up an organization and say "if things go wrong you can have the money belonging to the organization, but you can not come after us as indiviudals for every bit of money we have".
It is up to people to decide whether they wish to do business with such enterprises (whether they are called "corporations" or not) or whether they only wish to do business with enterprises where there is unlimted liablity - say Lloyds insurance syndicates. As long as this is known IN ADVANCE there is no fraud involved and it is matter of choice.
Normally it is rather hard to convince people to invest in something where, if it goes wrong, they not only lose their investment - but also lose everything else they have.
Of course tax law favours corporations by hitting individuals with inheritance tax and capital gains tax - but that is a reason to get rid of these taxes (not to ban corporations).
Also yes corporate managers are protected from stockholders by such things as the 1967 Williams Act and S.E.C. regulations - but that is a reason to get rid of such things as the Williams Act and the S.E.C. (not to ban people using the corporate form of doing business - which, I repeat, other people can refuse to do business with if they do not like it).
Trying to "join hands with the left" is (as Murry Rothbard and Karl Hess found in the 1960's over various issues) a mistake. They will not love us if we say "we also hate corporations" they will simply say "thanks for helping us destroy enterprises with shareholders, now we go on to destroy enterprises with single owners".
However, there are problems with Walmart.
For example we do not know how successful it would be if there was no government road network.
If people had to reply on private railroads to transport supplies over distance, it might be that local stores (with contacts with local supplyers) would have a bigger role.
Also (to turn to Britian) regulations are a factor. In Britian such things as killing of cattle and the preparing of meat are concentrated in big centers of operation - not by "market forces" but by regulations. The old system of family owned operations (often owned by people who were also local farmers) was destroyed by these regulations - and the big retailers (in this country the biggest is Tesco rather than Walmart) have close relationships with the centralized food preparation factories.
I would not be surprised if such regulations also exist in the United States. Making it harder for local supplers to sell directly to local customers (other than by "famers markets" and other small scale operations of little importance).
Lastly there is a socialogical - political point.
As F.A. Hayek noted in his "Constitution of Liberty" (1960) if someone works in a big organization (such as a corporation like Walmart) they are apt to forget that "the market" and "market forces" are really just people and their preferences.
Someone working for Walmart may see Walmart as what decides his wages and conditions (in a small local store an employee may be closer to understanding that it is really the CUSTOMERS that determine these things) - and so support government regulations to "improve things".
Even at the higher level this may be true. A thousand Walmart store managers are likely to have rather different attitudes than a thousand people who each owned their own store.
Published: June 29, 2006 4:28 AM
Paul Marks
The oligopoly point:
Such terms are part of the "perfect competition" concept that has done such harm to understanding how real markets work.
In the real world there do not have to be lots of enterprises competing for there to be a free market. There could even be only ONE enterprise (oh no a "monopoly") in a certain line of work and as long as it was not backed by government regulations there would still be a free market.
For example, in Britian there is (I believe) only one snuff manufacturer (snuff as in sniffing tobacco) - yet it does not "exploit its monopoly position" by charging vast prices.
If it did, the "barriers to entry" into this industry would certainly not prevent other enterprises setting up (or comming in from other lines of business) to compete.
All the "preditory prices", "anti trust", "insider trading" and other excuses for regulations are based on a total misundersanding of the market process. Normally regulations supposedly there to "promote competition" do the opposite - they are used by vested interests to crush people who threaten the interests of established people.
As for "perfect competition" it is just a nonsense concept. In the real world the point of business is to (for example) to have different costs from your competitors - in this way (by thinking up new ways of running the business) one can charge cheaper prices and still make a profit.
There is also no such thing as "normal profit" (and, therefore, no such thing as "windfall profits"). Profits depend on how cheaply one can supply something and what other people are prepared to pay for it - these things are constantly changing.
Indeed what products people want changes to.
In my youth it interested me whether the people who control academia and the media really believed the "perfect competition" and other absurd stuff that they trotted out - these days I do not really care whether they believe it or not.
After they have been comming out with these excuses for statism for a few years they are not going to change (whether they, deep down, believe any of it or not) - the job is to get round them (to speak to the public directly) not to try and get "fair treatment" from them.
Published: June 29, 2006 4:57 AM
JohnR
I don't have a particular problem with Wal-Mart but on some items they actually have a smaller selection than my local market.
My local Wal-Mart only offers a small selection of tartar sauce, ice cream, and no organic milk, while a Wal-Mart only a little farther offers organic milk. The vegetables tend to look a bit unattractive; I have often thought they throw the produce against the wall before they stock them.
And anyone who shops there notice that prices have risen considerably on items there in the last year?
The US govt long ago sold out to the corporations, the govt functions for their benefit, not the citizens.
Published: June 29, 2006 8:07 AM
Yancey Ward
The reason that many commenters here take to the defense of WalMart is that many or most of the detractors blame WalMart for the state's depredations. In nearly every example of WalMart being a "bad" actor, it is the state that is the source of the problem, and attacking the state is the beginning of the solution; instead, the detractors usually call for more state intervention to fix the problems of previous state intervention. Looking for common cause with libertarians on this basis is foolish.
Published: June 29, 2006 9:31 AM
Wild Pegasus
Person,
Yes, certainly. As in "There would certainly be no atomic bomb without the state", so "Wal-Mart would certainly not have enjoyed this level of success without the state".
- Josh
Published: June 29, 2006 11:31 AM
Person
Wild_Pegasus: If you don't have a meaningful response, please, just concede the point. You're not fooling anybody with a cryptic response. No one thinks you have a deep understanding of the issue you're trying to reveal through subtle comparisons. What they see is a troll who's trying to score some "street cred" with mutualists. Grow up.
Published: June 29, 2006 11:40 AM
Rob
I don't have time to read the blog to find out if this has already been mentioned, but...
“Wal-Mart has also advocated a higher federal minimum wage, presumably to try to ingratiate itself with the critics.�
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!
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.
How about Walmarts use of eminent domain? Is that the market economy at work?
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!
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.
Rob
Published: June 29, 2006 11:53 AM
quincunx
"This is just absolutely unbelievable. I simply cannot believe that I am being denounced on a "libertarian" blog for opposing state-capitalism. Oh, wait a sec, actually, I'm not surprised in the least."
You have a reading comprehension problem. State-capitalism is all-pervasive, it is impossible to measure the economic dislocations associated with violence. It is important however to point out the good aspects, and the bad ones. Your problem is the inability to see in anything but black & white.
"And you put yourself in a tight corner by praising EVERYTHING as long as nation states exist. According to you, any corporation that makes a living by hopping in bed with the state is just as innocent as can be. Poor, poor corporate fatcats! I feel soooo sorry for them--being denounced for working with the state and stealing at gun-point."
Another fallacy of composition. To oppose not praising anything is not to praise everything. This particular corporation does not just make a living by hopping in bed with the state. There is an actual business providing goods & services that customers may or may not purchase.
The only group that I can think off-hand that makes a living by simply hopping in bed with the state and not producing anything worth while is the artists and intellectuals that get public grants to produce garbage that no one would willingly buy.
State-capitalism has had a hand in the development of the internet. So by your bleak outlook, we should denounce the internet, because in your mind we can't praise anything that the state has touched, even though it would have come in a free market, anyway.
"Pro-corporate libertarians (all of them, basically) are always the first to demand state-action if an employee violates a contract with an employer, but when it's an employer violating a contract with an employee, they don't think the employer should be punished at all."
Strawman. A contract is a contract - it should be enforced by a non-monopolist free market organizations. Because the state exists, one would hope that it would follow its own laws. The fact that it doesn't, does not give you permission to pigeonhole libertarians (I'm actually an A/C) as pro-corporation. I don't know where you get this view, maybe you are not familiar with the libertarian ethic, or maybe you give to much credit to the false-labeling libertarians. I'm honest enough not to pigeonhole anarcho-socialist by comments of marxist-leninists, I would hope you would do the same.
"It all goes back to the idea that blindly defending the rich and powerful is automatically libertarian, no matter how hostile it is towards free-market principles."
This may be the view of some Randians, but it is not mine, nor that of many people here.
The ethical libertarian is quick to point the means by which wealth was accumulated, in case you haven't noticed, this is what happened in this thread.
The libertarian is quick to see whether the means of obtaining wealth was primarily that of economic means (free market) or political means (theft).
The problem lies in the fact that once wealth is obtained through political means, it can permeate to the organizations that obtain their wealth primarily through economic means.
Your problem is not being able to separate the two, nor measure their degree. One can and should occasionally praise those that primarily obtain their wealth through economic means, otherwise one becomes an angry and bitter contrarian that can't tell the good from the bad, and therefore denounces all progress ever made.
"Let's see, here. The article flatly states, "The critics [of Wal-Mart] are utterly ignorant of economics..]" Hmmm. Not sure how that could possibly be taking anything out of context.."
Wow, congratulations, you found a whole sentence that proves me wrong. Now, if you had the ability to synthesize arguments, you would see that when these 'critics' are described further, you do not fit among any of them.
Authors are not perfect, and unfortunately make this mistake because they try to address a majority dissenting opinion, especially if they have space requirements. Yet this is no different than reading criticism on libertarianism, by those that address minarchism and republicanism.
"But forget it, it's not even worth debating any more. It's obvious that libertarians are more than loyal to the state, except when it goes against their own interests. Libertarians are complete hypocrites, which is why nobody on the left will ever join their movement."
Thanks for the pigeonholing. You sure do understand everything, so there is indeed no point in debating with someone who makes generalized sweeping statements that simply reinforce their own prejudice.
Published: June 29, 2006 12:12 PM
David Spellman
Wow, there sure is a lot of animosity about Walmart. Of course, everyone is free to NOT shop there if they choose to. I don't shop there because the quality of their products is so low and I prefer to pay more for quality.
But why do people think they should use the power of government to force me to do what they believe is right? That's the question asked over and over in libertarian thought. Of course, there is not plausible excuse--but there is a reason--thoughtless, immature people who never progressed beyond the three-year-old mentality of enforcing their will on others.
If sweatshops in China are bad, then surely those who want to coerce every aspect of my life in this country are evil incarnate. It is ironic and humorous that evil should be used as justification to perpetrate evil against me. We are losing our freedoms because the rank and file citizens of our nations love tyranny more than liberty.
Unfortunately, the management of Walmart won't take the good advice to defend themselves either because fundamentally they have bought into the totalitarian nightmare themselves. All sides view it as a contest to wield the powers of government to gain the advantage. No one wants to live and let live. Libertarian wisdom falls on deaf ears even for those it would rescue.
Published: June 29, 2006 2:11 PM
David Spellman
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.
Published: June 29, 2006 2:31 PM
Wild Pegasus
Person,
Concede what point? Wal-Mart benefits heavily from state interference on its behalf, making it more successful than it would be. I'm not sure what deeper insight you would like. Or did I defile your Church of the Rich?
- Josh
Published: June 29, 2006 4:00 PM
Vince Daliessio
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?
Published: June 29, 2006 4:11 PM
Person
Wild_Pegasus: Did you not read anything I posted, at all? Sure, some interventions "benefit" Wal-mart. Such benefits could also be grossly inferior to what a free market would provide. What's your basis for claiming the free market would not be more conducive to their success through e.g. cheaper provision of such inputs? What's your basis for assuming Walton's intelligence was so specific it would have been 100% incapable of adapting to any other market/legal environment? That's right, you have none.
What if government banned all private electricity production and distribution (including self-generation) and then it gave out "free" electricity to everyone based on some byzantine formula. Some electricity users then benefit disproportionately because the benefits spill unevenly. ("benefits") Would you then say those persons/businesses were being "subsidized"? Not if you were intellectually honest or remotely capable of reasoning. 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.
Yet all you can do is isolate one "benefit" and attribute to that, all of Wal-mart's success. You don't realize how hindering this "benefit" is, nor even realize it's incumbent upon you to demonstrate otherwise. I've explained this again and again, for example, by asking you to apply the same standards to anyone who uses "the interstate highway system" and ask if you consider the state the sine qua non of their success. That attempt was, of course, lost on you.
If you have any actual insight beyond chest thumping, I would love to hear it. I love to gain greater understanding by hearing others' well-reasoned perspectives. This is especially true of those I disagree with. (Other than maybe Curt_Howland or Stephan_Kinsella, but that's for another day.) 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.
Published: June 29, 2006 4:41 PM
quasibill
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?
Published: June 29, 2006 5:23 PM
Matt H
I actually read the article at http://www.nlcnet.org/campaigns/china/wp/index.shtml about the poor girl who was "worked to death". She died of unknown causes after working in a "sweatshop".
The article explains why so many Chinese are leaving the farms for the factories.
The girl came from an area of Sichuan where the average income was $25US/yr. (The taxes were $37US/yr.) She was making about $65/month in the factory - if she got paid.
Interesting is the mention of the government system that requires a permit to work in the Shenzhen area, and makes migrants reluctant to report abuse for fear of being deported to their home towns.
The factories I have seen in China are just factories. The jobs are dull and unpleasant but they are obviously preferable to starving to death on a dirt farm. The legacy of Mao and the rest is tragic and obvious.
Companies like Wal-Mart that provide distribution to markets for Chinese goods are the best hope for people in these developing countries to generate wealth and untimately prosper.
Published: June 29, 2006 11:49 PM
M E Hoffer
"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...
Published: June 30, 2006 12:35 AM
Ryan Slye
Hey everybody. I just posted this article on an anti-Wal-Mart Myspace group. It has a current memmbership of around 4,400 people. With that many, I'm sure it is to get a response. The problem is, I'm somewhat alone in my Pro-Wal-Mart belief in this group. So I think I could use some of your help in it. If you don't want to, that is ok. But it would be helpful.
Here it is: http://groups.myspace.com/stoptheempire
Published: June 30, 2006 12:47 AM
brad
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
Published: June 30, 2006 12:31 PM
Tunisia
low income people are the very reason for the existance of rich fat ones, it has alway been like that
Published: June 30, 2006 2:43 PM
Vince Daliessio
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.
Published: June 30, 2006 4:21 PM
Paul Kirklin
Wow, it seems that my paper has generated a little buzz. I appreciate everyone's interest whether you agree or not.
Published: June 30, 2006 4:45 PM
Paul Kirklin
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.
Published: June 30, 2006 5:11 PM
Paul Kirklin
The previous post was intended for Rob from the author.
Published: June 30, 2006 5:15 PM
M E Hoffer
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..."
Published: June 30, 2006 6:11 PM
Paul Kirklin
I have to go for now, but if you tune in tommorrow I will have an answer for you M.E. Hoffer.
Published: June 30, 2006 7:10 PM
Paul Kirklin
"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.
Published: July 1, 2006 3:51 PM
M E Hoffer
Paul,
With these: "Today unemployment is less than 5%" & "then why is unemployment so low? We've been shipping jobs overseas for many years and it's still low."
Try : http://www.bls.gov/news.release/empsit.t12.htm
You'll see the "official rate" isn't the whole story & with this: http://mwhodges.home.att.net/state_local.htm
You'll find that people formerly employed by the "private sector" are going, more and more, somewhere else.
Published: July 1, 2006 9:57 PM
Paul Kirklin
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.
Published: July 1, 2006 10:41 PM
M E Hoffer
Paul,
I'll lead by example. What I noted, of yours, above, as a tautology, was incorrect. It was not stated as a "tautology", but rather, as an "axiom". My mistake, due to carelessness, leading to cluelessness.
You state: "This is because the great majority of people who lose jobs from these changes find new ones quickly." Fine.
Earlier: "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."
With this : "The actual effect of these shifts is a constant repositioning of human effort from less productive points to more productive points..."
I was asking : "Would you care to explain its operative reality in our current economic structure?"
And, even gave you a clue: http://mwhodges.home.att.net/state_local.htm
Simply, where is, the alluded to, expanding "honey pot" of "more productive points"?
Published: July 1, 2006 11:41 PM
Paul Kirklin
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.
Published: July 2, 2006 12:21 PM
Paul Marks
Many Americans seem to have an obsession with corporations.
Actually corporation tax is rather higher in the United States than in many other nations.
Also, concerning the running of corporations, there are more regulations in the United States than in many other countries (which is why companies now prefer to register outside the United States - you are less likely to be tossed in jail for minor errors in paper work in other nations, although nonsense "crimes" such as "anti trust law" and "insider trading" are comming in other nations as well).
People in the United States do not gain by the way government makes life for corporations difficult (and contrary to what people are taught the government does make things hard for them - there are far more taxes than subsidies and there are far more regulations that harm corportations than there are regulations that help them, wages are lower and conditions of work worse than if the government were smaller.
I suspect that even the hated Wallmart would be rather better off with a smaller government - although top managers are not likely to say that, people do tend to like the revenge of the various agencies to any challenge to their authority.
Sometimes I wonder how much this is really hatred of corporations (and I repeat that limited liability enterprises existed long before the 19th century Acts - and no one has to do business with them if they do not want to) and how much of it is just hatred of the boss.
If Mr Jones (rather than lots of shareholders) owned a multibillion Dollar organization would the "left libertarians" really hate him any less than "Jones Corp"?
No doubt we would soon be treated to stories about how Mr Jones "exploited" his poor workers (by offering them more money than other people, or than they could make in self employment)or indeed "raped" them. It is at least possible for a Mr Jones to rape someone (assuming that his sexual organs are in order) whereas an corporation can not, in fact, rape anyone (only an individual can rape an other individual).
On Indonesia: certainly the military government was statist - and yes it did indeed it did kill lots of people (especially in East Timor - although one should remember that the locals were killing each other before the Indonesian army arrived in 1975 and have gone back to killing each other now they have gone - perhaps the end of Portugese rule was not the good thing that "progressive" people claimed it was, as it led first to Civil War and then to the horror of Indonesian rule).
However, (the horror of Indonesian occupation of East Timor aside - and I repeat that I know of that and I think it deeply evil) the main killing in Indonesia was done in the 1966 comming to power of General Suharto.
Some things should be remembered:
Firstly the Communists struck first - and killed high ranking military people.
Secondly most of the killing of Communists was done by ordinary people with hand tools. The military people pointed out to the peasants that the Communists wanted to nationalize their land.
This was, of course, quite true. Why are "leftists" objecting to "direct action by poor people in the defence of their rights" - is this not the sort of thing you normally favour?
Or was it unsporting of the military to point out what the objective of the Communists was - should collectivization have been left as a surprise?
At the time the Chinese supported Indonesian Communist party made its bid for power Mao and his comrades were busy murdering tens of millions of ordinary Chinese.
Why should Indonesia have suffered the same fate, if it could be prevented by killing the Communists?
Just so you lot can say "well that is one in the eye for the corporations"?
As for the corporations: I rather suspect that most managers would rather have done business in Indonesia without having to pay bribes to the family or friends of President Suharto. But yes it is quite true that did prefer paying the money and obeying the regulations than having their enterprises stolen and (if they were locals) being exterminated (which is what the communists were planning for all business people).
"But government regulations were used to keep down competition" - I am sure they were (especially if a relative of the President owned an enterprise) but the point of this claim is what?
"Total free market or nothing" is that it?
In an ideal world Suharto would never have been in power, but was he really a worse ruler than the previous President - a man who had dreamed of the conquest of most of Malaysia (thus dragging the British army back for the nasty jungle war known as the "cofrontation") and whose (demented) economic policy had opened the door for the Communists.
That is what real life is often like - a choice between existing alternatives, not alternatives that exist only in theory (this is not the say that we should not try to make the world a better place, simply that we should except that there are things worse than what we have now)
People who seem to think (because of this or that subsidy to a corporation)that the United States is no better than a socialist state need to put their heads under a cold tap for a little while.
Published: July 5, 2006 7:49 AM
Paul Marks
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.
Published: July 5, 2006 8:10 AM
Drew
The opening paragraphs of the article are pretty funny. I don't think Wal-Mart is impressive or amazing. What's impressive and amazing is this cute little expensive Greek store near me that has extremely exquisite, high-quality foods that make me quiver with bacchanal delight, and a plethora of mind-shattering cheeses. It's also aesthetically pleasing, which Wal-Mart is certainly not. The parking lot is usually full of expensive German vehicles, and everybody that shops there is well-groomed and not smelly. Wal-Mart is gross, not very clean, full of bottom-of-the-line products, with weird freaks maneuvering all over the store, and a parking lot full of trashy cars. However, I do defend Wal-Mart's right to do as they want! And I'm glad they offer low prices to people in unfortunate financial situations.
Published: July 5, 2006 7:00 PM
TokyoTom
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
Published: July 14, 2006 2:57 AM
Christa Downs
I must say, your argument helped a lot with an opionated paper I am writing for my 10th grade English class. I am on the anti-Wal-Mart side however.
From everything I have read lately, my honest opinion is that, as much as Wal-Mart is a blessing to the world, not only this country, I cannot help but wonder about the other side of the criticism. Not the consumer's point of view, but the suppliers.
To continue Wal-Mart's promise of low prices, each year, a product's price lowers. The supplier must, in turn, either supply the product cheaper or quit producing. This forces companies into 1. bankruptcy or 2. importing.
I would love to hear comments on this. Email me at mombadoo@hotmail.co
Published: April 23, 2009 7:29 PM