Rebirth of Reason


Wal-Mart: A Big Business With a Backbone
by Andrew Bissell

Hi, my name is Andrew and I’m a Wal-Martaholic.

That may sound silly, but to many of my friends, shopping at Wal-Mart is something to be ashamed of, a personal weakness like alcoholism or lecherousness. It needn’t be so. Wal-Mart’s only “crime” is doing its job—selling goods to consumers—so well that it has come to dominate the retail market. It did that by outmaneuvering and underselling its competitors for decades, thereby earning its station as the top global retailer.

Like many successful businesses, Wal-Mart has come under fierce attack from a mob of politicians and self-appointed “community leaders.” They have tried to shut down the retail giant’s stores and block construction of new ones, using discriminatory ordinances and tax policies. Their grievances against Wal-Mart, though, sound more like praise for its competitive success than indictments for wrongdoing:

“Wal-Mart’s low prices force out smaller Mom-and-Pop retailers, who can’t compete.” Yes, when they have a choice, consumers pick the businesses that charge the least for goods of comparable quality. Besides, what entitles these stores to a captive customer base and perpetually guaranteed operations?

“Wal-Mart’s stores put a strain on roads, water, sewer, and other infrastructure.” This is because so many customers drive to Wal-Mart, and because so much business is conducted there every day.

“Wal-Mart refuses to let its workers unionize.” A cart of groceries costs 17 to 39 percent more at unionized stores, where the costs of artificially high wages are paid at the checkout counter.

“Wal-Mart’s huge bargaining power hurts suppliers.” Progressives get all mushy for proposals to have the state engage in collective negotiations for insurance and pharmaceuticals, to bid down the price of health care. But when Wal-Mart effectively accomplishes the same thing with retail goods, why, that’s a big nasty corporation crushing the poor suppliers under its massive thumb!

“Just look at Wal-Mart’s customers.” This last complaint is a favorite among an especially vile crowd of left-wing elitist snobs. The fact that so many low-income families shop at Wal-Mart is a testament to its success in making goods available to the poorest workers.

Big government types despise Wal-Mart because it achieved what decades of regulation, antitrust lawsuits, money supply manipulations, and “consumer advocate” agitation couldn’t: a genuine productivity revolution that raised living standards across the board. Productivity growth is the key factor in lifting real wages, and was the driving force behind the massive economic gains of the 1990s.

It was Wal-Mart’s innovations in supply-chain management and logistics that drove those gains. According to a report by the McKinsey Global Institute, “Productivity growth accelerated after 1995 because Wal-Mart's success forced competitors to improve their operations…. From 1995 to 1999, competitors increased their productivity by 28 percent, while Wal-Mart raised the bar by further increasing its own efficiency another 20 percent.”

In response to the attacks on its business, Wal-Mart has launched an aggressive public relations campaign in its defense. Of course, the anti-Wal-Mart torch-and-pitchfork crowd is shocked—shocked!—that the company would dare to answer the allegations leveled against it.

They expected Wal-Mart to roll over and play dead. They were counting on the sort of meek appeasement we’ve seen from tobacco companies, which settled lawsuits and ran anti-smoking ads; or from Wall Street investment banks like Citigroup, which gave into pressure from the Rainforest Action Network to stop financing projects that “cause global warming;” or from biotech firms like Monsanto, which caved to Greenpeace demands that it halt research into genetically engineered wheat.

It’s about time one of America’s persecuted big businesses stood up for themselves, stopped apologizing for their achievements, and proudly asserted their right to exist and do business.

Mom-and-Pop stores, union workers, and organic “fair trade” sustainable all-natural hippie-dippie vendors aren’t entitled to our business. Our shopping dollars are not some communal pie to be carved up and dished out by legislators and city councilmen picking favorites from a list of underdog competitors. They are our individual tools of choice, which we use to pick the best product, at the best price, from the best vendor we can find.

For me, Wal-Mart isn’t just the store with everything I need, at the best price I can get without buying in bulk. It’s also a corporation with the guts to stand up and demand that my right to do business with them be preserved.

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