A weblog titled “The Neighborhood Retail Alliance” offers what it calls the “Conservative Case Against Wal-Mart in NYC“, an economic study for the case against Wal-Mart, which being served from a small business alliance, should make the reader question the inherent bias and accuracy in which they present the issues The “study” engages in the trade-deficit fallacy when discussing how the dollars are exported and thus diverted from the local economy.
That aside, they do make one compelling point regarding the subsidization of Wal-Mart’s employment costs which happens because of existing nanny-state freebies such as healthcare, food programs, housing subsidies, etc (which absent of, the argument goes, Wal-Mart would have to raise salaries substantially to compense). Whether you hold that against Wal-Mart is an area of discussion I expect Austrians, libertarians and mutualists to clash ideas over.
If anyone is interested in preparing a rebutal, I would love to see it.
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The “economics” part is trivial to rebut.
Consider that estimate of how much money “stays in the community”. Compare two businesses. One hires extra local people in make-work jobs. Suddenly it looks better in terms of the amount of money that “stays in the community”. But the community is actually worse off than if those people were instead doing something /useful/ with their time.
Then there’s the “predatory pricing” nonsense, which some find an appealing myth but has no supporting evidence…
The cure is simple: vouchers. People will get a certain number of coupons (or vouchers) periodically from a new gov’t agency. The vouchers indicate how many dollars may be spent at each of the various licensed vendors or businesses in a community. Only a few are vouchers for Wal-Mart use, then there are vouchers for Macy’s, Mom & Pop’s Deli, and 7-Eleven, etc. That way, all business get a fair share of the consumers’ dollars. It is the only way to be truly fair to everyone.
..and these vouchers (though they were called “coupons”) where used by the Soviet Union to ration scarce goods to consumers.
Somehow “people’s servants” were able to supplant these supposedly fair coupons with supplies from “special dipensaries”.
Eventually they figured that even with that they’re worse off than “poor” in US. So long, USSR.
There is one point to be made about the subsidy to Wal-Mart. The social security systems of various countries do not simply provide transfers and indirect subsidies, they switch one form of externalised cost for another; without them you get vagrancy costs instead. Whereas a proper solution would promote people out of poverty, present systems aim at maintaining them in poverty or leaving them in it, as the case may be. Without the present subsidies Wal-Mart would not have to raise wages; the true alternative is that it would contribute further to vagrancy costs by unloading all but the most value adding of its employees (and it might not then be a viable business approach, which of course is what the small retailers want).
I dont really understand the hatred for walmart. They actually pay better than their competitor’s (kmart, sears). The only thing that pisses everyone off about them is that they are hugely successful
I dont really understand the hatred for walmart. They actually pay better than their competitor’s (kmart, sears). The only thing that pisses everyone off about them is that they are hugely successful
Ah, there you have it, the Great American Driving Force of Politics: Envy. Success is okay, just so long as you are not too obviously much more successful than someone else..
protectionism and speculation, two monsters to deal with before having faith at wal-mart, microsoft, citigroup, kraft, general electric and exxon-mobil.
gambling is a problem when its more usefull to bet everything than to save what you have, when foods and health care are in the hands of individual with no sharing responsability then there is no need to have faith, you risk because there is no choice. The obligation to risk became a condemnation, is it right??
And when they consume, they buy to others with no obligation to anyone, pay the debt you got when you were born it says, then you will have a chance to try!
Their dreams are eternity, so unless we help them get this, they wont become patient and compassionate. Also there as to be a part to make accessible information and basic needs, but what is a basic need? what are basic responsability that makes this possible?
I agree that envy plays a roll, and maybe a big roll. But i can’t help wondering how much different it would be if the masses simply just understood economics, believed in free markets, and could see how much better they are off allowing the market to decide if Wal-Mart will prevail.
The ‘masses’ don’t have the desire to understand economics. For that matter the intelligentsia don’t either, unless the theory or twisted version of it supports the ends they insist on achieving, practical or otherwise. The other problem you have is that following decades of government subsidies and public education; the ‘masses’ enjoy a better lifestyle than they could if they were less lazy and the fundamental education level they have doesn’t facilitate an understanding of economics or American history. In order for envy to be squashed, people need to have the desire (to not be lazy) and the capacity (basic understanding) to learn about economics – that is an end that cannot be achieved on a large enough scale as long as the politicians keep the people distracted and complacent. The funny thing is the people that complain about Wal-Mart’s business practices are hurting themselves (unless they are too high class to shop where the rest of us do) and the very wage-earners they purport to defend. Envy is a sin that can only be overcome by sound economics.
I find it amusing when people oppose Wal-Mart as something their community doesn’t want, but refuse to put that to the test by letting Wal-Mart open a store. If the people who live there really value their mom & pop stores more than Wal-Mart, then they won’t go to Wal-Mart instead. Political intervention in the economy is the fallback position of those who fear letting the consumers determine things themselves.
I think the prime motivation seems to be some aesthetic standard that has little to do with the actual material welfare of people.
It’s also funny to hear moaning about the big stores followed by excitement about low prices at one of them. There’s no connection between capitalists and the way living standards have increased.
A) Form a purchasing distribution alliance/co-op or leverage a existing one e.g. Kmart and eliminate distribution costs at local level where local sourcing is possible.
B) Keep overheads and financing costs lower than WalMart
C) Price similar goods at/or below the cost of travelling to WalMart and time/effort spent there
D) Differentiate with variety (not breadth)/quality of goods
E) Employ web based information systems for ordering tracking and accounting
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