Embracing WalMart
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Currently under revision.
Before yesterday, I was an avid denouncer of WalMart. I even own a copy of "WalMart: The High Cost of Low Prices". Yet, a lot of the arguments against WalMart didn't resonate with me, so after listening to Charles Platt and Russ Roberts discuss Mr. Platt's time as a WalMart employee, I was entirely convinced: WalMart isn't especially bad.
However, I haven't changed my mind on any of the issues that made me dislike WalMart, I just realized that those issues have very little to do with WalMart itself. WalMart is simply a lightning rod for more important questions.
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Two Narratives
WalMart has become the focus of a widespread and entirely valid unease about big business, big box, and corporate run culture. Is WalMart different in some way that makes it "especially bad?" The defenders of WalMart say yes. It's the most successful, and that success makes market-hating Liberals despise it. The Liberal--so the narrative goes--hates the free market and hates WalMart as a symbol of free market success.
The Liberals narrative paints WalMart as a bully beating up on smaller stores, beating up on suppliers, and beating up on employees. WalMart destroys neighborhoods--literally and metaphorically--and is more often than not an unwanted intrusion. WalMart may be great for those that don't have to live near it, but no rational person wants a WalMart next door to their home and the Free Marketeer[notes 1] who says "WalMart is great, just not in my back yard" is a hypocrite.
The Free Marketeer
Both narratives have their points, but are ultimately rather weak. The Free Marketeers fail to appreciate the exogenous costs and unfair advantages that WalMart exploits. WalMart has gotten over a a billion dollars in documented subsidies, and receives many times that in undocumented and indirect subsidy. Maybe WalMart didn't need those subsidies to run the Ma and Pop operations, but it certainly gives lie to the idea that WalMart is bettering them on level playing field.
In my own neighborhood, a WalMart is moving in and as part of the building permit, they're required to do a traffic study. The study said there would be no impact on traffic. This is clearly a lie and immoral, and potentially, illegal. However, WalMart knows they can get away with it so they do.
Why would WalMart lie about traffic? Because if they told the truth, they'd have to kick in to upgrade infrastructure. WalMart is the sole beneficiary of the traffic, the traffic costs money to deal with, so on a level playing field, WalMart should pay for that cost. The taxpayer ends up footing the bill for the infrastructure upgrade. WalMart privatizes the profit and socializes the cost. And BTW, this kind of subsidy doesn't show up in the $1BN, meaning that WalMart's real subsidy--paid for by you and me--is certainly significantly higher.
The Liberal Narrative
The Liberal story is no better for the simple fact WalMart is not a particularly bad business. They pay more than Target.[1] They may make immoral choices, but it's not a company's business to make moral choices. When WalMart lied to me and my city about the effect their store would have on traffic, it was the officials at the city who failed to call them on obvious bullshit who betrayed us, not WalMart.
There is significant evidence[notes 2] that the introduction of a WalMart causes a significant up-tick in crime, but the effect is well documented for other big box and malls (a concentration of retail + big parking lots). While the effect seems to be bigger for WalMart than with comparable[notes 3] this is again a failure of regulation more than a failure of WalMart. WalMart has simply learned to externalize costs better than other retailers, but it's us that allows them to do it.
Deeper Questions
The arch-Free Marketeer Russ Roberts goes so far as to call the special regulations effecting (and effectively barring) WalMart SuperCenters in his home town "disgusting".[notes 4] Yet I've had friends describe shopping at WalMart with that same word: disgusting.
I assert that neither reaction is rational. There are good rational reasons to like WalMart, and good rational reasons to dislike WalMart. But when we discuss WalMart, we're really talking about the bigger issues. People aren't good with abstracts so we choose the best representative we can find and use them as a stand in for the larger questions.
Liberals and conservatives may choose different things to focus on, but they both have points. WalMart is a lightning rod, but the fire it draws is real.
- Big box stores hurt property values, increase crime, and increase traffic congestion all without compensating the injured parties. Even the most ardent WalMart supporter who loves low prices and big selections would be foolish to want a WalMart to open anywhere near them. Drivable: great. In your neighborhood: bad. But it has to be in someone's neighborhood and that someone is burdened with an unfair portion of the cost without compensation.
- Corporate subsides distort the markets and hurt innovation.
- WalMart has done a lot to bring convenience to rural America and it's success and innovation in managing the supply chain can hardly be understated. Specifically, their bottom up management.[notes 5]
A Matter of Taste
For better or worse, WalMart is a symbol. To some, it's a symbol of the triumph of innovation and the free market. To me, it's a symbol of the imperfections of the market and corporate welfare.
That's why even as I move towards acceptance of WalMart in general, there's no chance I'm going to go to a WalMart because I simply don't want to shop there. If New England wants to ban big box stores to protect the "character" of their towns, so what? Free Marketeers decry this sort o thing, but doesn't this merely create a competitive advantage among cities/states? The free market shouldn't stop at WalMart.
To some extent, it doesn't really matter why people do or don't like WalMart. They just do (or don't). Why shouldn't one community vote to keep WalMart in while another loves the convenience and savings?
Notes
- ↑ The term "Free Marketeers" isn't really on par with "Liberal" in terms of general recognition. However, the term "Conservative" isn't really appropriate, while Libertarian is probably too restrictive. My intent is to find a term that most of the people on the "pro-WalMart" side of the debate would freely associate themselves to, and "Free Marketeer" is the best I could do.
- ↑ This 2006 study is the best I've found so far, but googling "WalMart crime" produces a lot of hits. The studies are, significantly, produced by groups already opposed to WalMart, so there is likely a bias. On the other hand, I haven't found much in the way counter evidence. What there is, I discuss in the main article.
- ↑ This tiny sampling of WalMart versus Targets provides a stark illustration, though other studies exist which show a still present, but not so large difference.
- ↑ I assume he'd say the same about WalMart subsidy too, but that's a different issue.
- ↑ Charles Pratt does a good of describing the bottoms up organization of WalMart.
