Comments (24)

• George Gaskell

  As far as I can tell, the idea that prices have a moral dimension is the most destructive fallacy in all of economic thought. It is the basis for the labor theory of value, among other things.

  Prices are neither just nor unjust, of course. They either maximize the profit of the seller, or they do not.

  Published: April 24, 2007 8:36 AM

• Person

  I share Jeffrey_Tucker's confusion. One time on a forum I pointed out that anti-trust laws (as explained in DiLorenzo's book) lead GM to make their cars "not as good" so as to keep marketshare low, attempting to show their absurdity. Then someone responded that, "Hey, that's a great example of anti-trust laws doing what they're supposed to."
  
  I mean, how do you even argue with something like that? Is it that unreasonable to expect agreement on the premises that "better quality products are ... better"?

  Published: April 24, 2007 8:46 AM

• Erasmus

  It's actually pretty unsurprising that intense price competition makes a lot of people mad. Walmart hasn't ever really been in the business of making nice with its supply chain and the political dimension of outsourcing production from overseas creates a ready-made class of losers.

  The trouble with lower prices is that the benefits are relatively diffuse while the losers are well organized.

  Rational people just need to overcome hysterical emotional responses with logic. Good luck.

  Published: April 24, 2007 9:05 AM

• Matt

  This chart says all you need to know about Wal-Mart's business:
  http://finance.yahoo.com/q/bc?s=WMT&t=5y

  Wal-Mart bashers don't like inconvenient facts like profit margins.

  Published: April 24, 2007 10:10 AM

• wings

  "I mean, how do you even argue with something like that?"

  I had a moment like that recently. The socialist I was arguing with said that banning the expensive lightbulbs that most people buy was a good idea not just because it would save the environment, but because it would help fight inflation! The idea was to keep prices low by banning expensive things.

  I had no comeback.

  Published: April 24, 2007 11:07 AM

• Damon

  wings,

  Have you ever read "Atlas Shrugged"? In it, Rand describes Directive 10-289, where no new products can ever be manufactured, and no new patents can be issues. Everybody must continue to make the same products, at the same quantities, and purchase the same goods, at the same quantities every year. The goal was to 'stabilize' the economy. The result, or course, was total economic disaster.

  Your socialist friend doesn't quite understand that inflation is a market force, and as such, causes a natural reaction within the market. However, when the government creates unnatural inflation, it is much harder for the market to correct itself. Just look at what happened during the 'energy crisis' of the 70's.

  Published: April 24, 2007 1:28 PM

• Bill

  Amazing that the name of the magazine is "Business Week" not "Socialists Weekly" or "Anti-Poor Weekly".

  This is simply more proof that there is a huge conspiracy that is mostly left wing against poor people. These folks are against every attempt at making the price of anything: drugs, health care, TVs, Ipods, computers, internet service, wireless, transportation, vacations cheapter and MOST IMPORTANTLY WORK!!!

  Sorry poor folks. I am not able to help. I try but logic and sense and freedom just are not enough.

  Published: April 24, 2007 2:30 PM

• Cheryl

  Bill remarks:

  "This is simply more proof that there is a huge conspiracy that is mostly left wing against poor people."

  I find this utterly insulting, as would most people, especially when the poverty you are talking about can be and HAS been directly linked to a sub-standard employer, like Wal-Mart, offering sub-standard pay. As a Republican, I don't believe in wealth redistribution, but it's happening on a grand scale. It happens every time a customer spends money for merchandise at a Wal-Mart store. That discount has proven to be the off the backs, and out of the pockets of the impoverished worker, such as stealing time (shaving) from an employee. This practice appears to be widespread, as well as illegal.

  Essentially, the working poor are "subsidizing" Wal-Mart's cost of the merchandise, making it unfair to the other retailers who play by the rules. The result is a form of welfare for the Wal-Mart shopper, and that shopper might not be qualified for such entitlements based on income.

  We have to be wary of this back door welfare, especially since the biggest losers are the employees themselves. I'm sure you'll agree that they (the employees) might need a little more protection from all of us, especially if they're trying to better themselves through education and/or experience. Wal-Mart has no right to exploit them in this manner.

  Published: April 24, 2007 3:58 PM

• George Gaskell

  the poverty you are talking about can be and HAS been directly linked to a sub-standard employer, like Wal-Mart, offering sub-standard pay.

  By what means do you determine that their pay is "sub-standard." What is the standard? More importantly, what is the method by which this standard is to be calculated?

  In short, how do you know what people SHOULD be paid, other than by reference to the price of their labor in the market?

  What makes YOU the all-seeing, all-knowing guru of what various prices ought to be?

  the working poor are "subsidizing" Wal-Mart's cost of the merchandise

  This is the Labor Theory of Value in a nutshell. In case you are unaware, Cheryl, this is the economic theory widely promoted by Karl Marx and countless of his latter-day followers. Congratulations.

  I believe I referenced this in my first comment, up-thread.

  Wal-Mart has no right to exploit them in this manner.

  They pay better, and offer better working conditions generally, than every other existing alternative, or else people wouldn't work there.

  If you feel so strongly about it and want to help people, and put your vast economic knowledge and insight to good use, then you really should start a business and pay your employees more, and treat them better, than Wal-Mart. Good luck with that.

  This, at least, would be a morally defensible plan of action. In contrast, promoting the use of government thugs to order somebody else to pay some third person more (or less) than what YOU think ought to be paid is morally reprehensible and makes you no better than a gangster and a criminal.

  Published: April 24, 2007 4:27 PM

• Scott D

  Cheryl,

  Each time I read a response such as yours, I feel a momentary stab of despair. So many people think exactly as you do. How can we ever possibly convince them all of the truth? Even as I write this, I expect that someone else is composing a response to derisivley attack yours, with the likely result that you will be irritated enough not to return.

  The attack against Wal-Mart for its employment practices is a poignant one. Surely such a profitable company could spare some of that great wealth to pay its workers more? It would only be fair, right?

  And yet, this argument fails to recognize the fact that working for Wal-Mart represents a choice. It might mean the choice between work environments, different pay scales, commuting distance, or even a choice between working and not working, but it is a choice. Prices are driven by choices. If Wal-Mart pays more than it's applicants would ask for, you are correct that they likely would not be able to mark down their products as much. However, if they paid too little, they would not be able to attract the qualified workers they seek. The hourly wages they choose are not sub-standard, they are precisely correct! They are exactly enough to attract the workers they seek.

  Consider the repurcussions if Wal-mart tomorrow decided that they would increase starting pay by $2/hour across the nation. Would it surprise you that the outrage expressed in this article would be the same, only flipped over to the labor market? Local businesses would be forced to increase their pay to match Wal-mart or risk losing their workers.

  As for the time shaving you mention, I would say that it is a bit early to decide that issue. As I understand it, the plaintiff's attorney says that there is a way to determine that the shaving has taken place, but we don't know for sure yet. If it is shown to be fact, Wal-Mart will be punished for its breach of contract with its workers, but this is a separate issue from wages.

  "I'm sure you'll agree that they (the employees) might need a little more protection from all of us, especially if they're trying to better themselves through education and/or experience."

  No, I do not agree. I do not need anyone's protection of my employment, nor do they need mine. If I feel that I am being treated unfairly, I have the option to leave. To deny that fact is to saddle people with the destructive idea that they have no control over their own lives.

  So, I'll give you credit for the time-shaving practice, if it turns out to be true, but the very idea of sub-standard pay is demonstrably false.

  Published: April 24, 2007 4:44 PM

• Tom Rapheal

  George please be a little more civil. I do however agree with eveything you said. Cheryl, a good marker to use when trying to see if someone is being exploited is if they have free will. If they are their volontarily they are not being exploited.

  Published: April 24, 2007 4:48 PM

• Master Debater

  Cheryl remarks: "Bill remarks: "This is simply more proof that there is a huge conspiracy that is mostly left wing against poor people." ... As a Republican ... Wal-Mart has no right to exploit them in this manner."

  So then there's a huge conspiracy against poor people by _both_ the left _and_ the right!

  All the horrors of prehistory are still kicking, just better veiled and in a more palatable form.

  "It's hard to understand the mentality of people who would oppose this." At this point I'm just going with profound and deep villainy. I think we've seen enough to realize it's not simply a lack of knowledge that we're dealing with.

  But what's interesting is that I don't think people are consciously aware of what they're doing, it's a conspiracy with no actual conspiring.
  

  Published: April 24, 2007 5:19 PM

• Matthew Lock

  "Forget the World Bank, Try Wal-Mart."
  http://www.youtube.com/watch?v=rraoz20Mm-s

  Published: April 24, 2007 9:16 PM

• TLWP Sam

  I found an article here where the author quotes the Scholastics on a 'just wage' or 'just price for labour'. And they'd hardly be sympathetic with Chery's view:

  http://www.lewrockwell.com/woods/woods8.html

  Published: April 24, 2007 9:49 PM

• George Gaskell

  George please be a little more civil.

  I have been infinitely more civil than the situation demands. I have been more civil than Cheryl, and every other Republican, deserves. They cheers on this hoard of thieves and murderers they call 'government.' They are willing participants in one of the largest con games in the ugly history of humanity.

  Do these criminals have to come to your house and point a gun at you and your children before you recognize them for what they are? Is this all just an academic exercise? This is real life, not a debating society. They are stealing from us at this very moment, threatening us into compliance, and openly announcing their intentions to increase their rate of theft.

  I am sorry that so many people in this day and age, with technology at our fingertips that virtually no one in the history of the planet has ever enjoyed, live in such ignorance. I am sorry that they labor under such profound logical fallacies. But you either genuinely believe that the modern nation-state has no legitimacy, or you don't.

  I don't. This group called government is just another mafia organization. They are just Vikings. They are pirates in suits.

  What civility should one show to pirates and mafia thugs when they come to rob you?

  Published: April 24, 2007 10:27 PM

• Bill

  I am suprised that there are Republicans that hate poor people as well. If this wasn't true they why do they insist on taking choices away from Walmart customers and employees. Then to make matters worse they pass minimum wage laws that DO NOTHING BUT HELP WALMART and OTHER LARGE EMPLOYERS!!!! AND HURT LOW SKILL LABORERS!!!!!!

  Cheryl, did you vote for a hike in the minimum wage in your state? Did you vote to take choices away from the poorest consumers and least skilled workers?

  I find it funny that the party of Regean and Goldwater dispises the science of economics almost as much as it dispises poor people.

  If you need proof look at government payments to individuals and businesses. MOST are affluent and NOT POOR!!!

  You wonder why I am a Liberterian AND FORMER REPUBLICAN!!!!

  Published: April 25, 2007 8:12 AM

• Yancey Ward

  Cheryl,

  When you can supply evidence of WalMart marching employees into the store at the point of a gun, then your points will be taken seriously. However, it is very clear that every employee works there voluntarily.

  I have a question: do you own a business?

  Published: April 25, 2007 9:00 AM

• Andrew T

  "Wal-Mart has no right to exploit them in this manner"

  Last year 25,000 applied for 325 openings at a Wal-Mart in a Chicago suburb, Chicago itself, I believe, was acting responsibly and looking out for the poor by forcibly denying them an opportunity to improve their lives. I guess there's still work to do because those 25,000 didn't get the memo that they're being exploited.

  Published: April 25, 2007 9:13 AM

• TDJ

  George please be a little more civil.

  I have been infinitely more civil than the situation demands.

  Thank you for responding appropriately and well to Tom Rapheal's, uh... thing. In the world of indirect thief/murderer appeasers, there are no more dire offenses than reason and straight talk.

  Published: April 25, 2007 9:52 AM

• Paul Marks

  People who go to work for Walmart get paid more than they did in their previous job - how is this "exploiting" them?

  The only bad things I can think of concerning Walmart are that it sometimes gets local governments to spend taxpayers money on improving roads to Walmart stores (and other such). Something that should not be done - if Walmart wants better roads it should pay for them itself.

  And, of course, that it keeps trying to make nice with various leftist groups - groups that will try and destroy Walmart no matter what it does.

  Published: April 25, 2007 11:29 AM

• lester

  "I have been more civil than Cheryl, and every other Republican, deserves"

  oh brother. and you wonder why haven't discovered libertarian ideas

  Published: April 25, 2007 1:52 PM

• Scott D

  George please be a little more civil. I have been infinitely more civil than the situation demands.

  Thank you for responding appropriately and well to Tom Rapheal's, uh... thing. In the world of indirect thief/murderer appeasers, there are no more dire offenses than reason and straight talk.

  True, true, and I also think that everything the George Gaskell said is true. And, George's response wasn't any more imflammatory than Cheryl's. However, I sometimes wonder when these posts appear (Cheryl's) whether in responding, we're trying to persuade or simply trying to defeat the other party so that we don't have to hear from them ever again.

  I suppose it is all a matter of how you perceive people. Do you see a lying, freedom-hating government stooley, or simply someone who has taken to heart the ideas pushed on them over and over by the media, schools and all of the various other institutions that promote coercive ideals. Cheryl might be beyond reaching an understanding of why all of these ideas that she has been force-fed are wrong, but she is more likely to see reason if we don't cloud the issue by insulting her.

  Anyway, take that however you will, and I'm not trying to pick on you George, but more as a general commentary to the worse offenders. Maybe I'm a foolish optimist for thinking that some people might actually listen and change their views if we use more civil tactics of persuasion.

  Published: April 25, 2007 2:26 PM

• Jim Tetzlaff

  Wow! The responses to Cheryl make me wonder if she is just pulling everyone's chain or truely a socialist democrat. Either way I suggest she go live in a cave, hug the nearest tree, give up her SUV ands air conditioning, electricity and forget about how nice Walmart has been to the LOWER classes of people with very modest means. Capitalisn helps the most people with the least impact- just vote with your own wallet. Best product, lowest price.
  Amen,
  JimT

  Published: April 25, 2007 9:37 PM

• Björn Lundahl

  People like Cheryl are a danger to society as they propagate for certain anti market policies that would, if adopted, make the society poorer. They believe in so many fallacies and they never bother to examine them. They are, therefore, really unjust and wrong before they start talking. In politics people get paid for saying fallacies like the ones that Cheryl does, fallacies which superficially sound true, but are untrue. Politicians play on those strings all the time. The better they play on those strings, the more votes they receive.

  Now then, if I accept a low wage (if wages are low or high at Wal-Mart is another story) that is not to subsidize anyone as I wouldn’t accept that wage if I had better options elsewhere. Obviously, if I accept the low wage I have therefore gained.

  Workers are also consumers and lower prices on goods and services increase their prosperity.

  Businesses have to adopt and change in accordance with new market conditions. The better resources are allocated in a nation, the higher standards of living will the population have.

  If the U.S. adopted free trade, recourses would be allocated to those areas where the U.S. is competitive and productive and wages would be higher and prices on goods would be lower.

  Even in China they are starting to learn this and their wages are now higher than ever.

  If people believe that employees are exploited at Wal-Mart they need not go shopping there and could boycott it. They would, though, be deluding themselves if they made that choice as the employees would be poorer because of those actions. The employees would be less demanded and, therefore, less paid and some of them would be unemployed or “underpaid” as employees for other employers.

  Björn Lundahl

  
  

  Published: May 1, 2007 3:42 PM