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Source link: http://archive.mises.org/4897/success-breeds-resentment-walmart-edition/

Success breeds resentment: Walmart edition

April 11, 2006 by

Three stories running around the Internets of late:

The first is a story regarding Walmart wanting to expand more into the banking industry through the use of the ‘industrial loan corporation’ provision. This would allow Walmart to process its own payments without going through costly regulatory oversight or 3rd parties. This in turn saves millions each year which thereby allows them to cut costs for other goods and services. Critics claim that in the event that Walmart goes belly up or has an otherwise poor year, the rest of the industry will feel its effects. They also suggest that the firm would eventually offer other banking services, thereupon “destroying” the local banks. See retorts here.

The next story ties into the last portion of the first, Walmart is now offering aid to rivals. Essentially, they are going to invest in local firms they directly compete with in addition to offering them educational and training material on how to survive when Walmart sets up shop. Plus they are going to give them free advertising inside their own stores. Due to outside forces, this is beginning to sound more like how tobacco companies were forced to fund advertising campaigns to promote kicking the habit and/or not starting in the first place.

Lastly, some geeks are going wild over allegations that the marketing arm of Walmart in part, decides what video games are ultimately going to be developed. In a nutshell, Walmart will only sell certain types of games that meet certain guidelines. Because they sell a large volume (i.e. have a huge potential market), publishers listen to what they want. In reality, this is no different than what many bookstores practice in terms of marketing adult material such as Playboy. Or video stores like Blockbuster not offering X-rated movies for rental. The list for omission is long and is not unique to a company such as Walmart (other “big-box’ stores like Target have their own guidelines for products as well).


quincunx April 11, 2006 at 10:23 pm

Oh no, private stores deciding what items to sell? That can’t be – that is unfair, we need the government deciding what and how things should be sold. We need a guy with a gun to our back guiding us through those complex warehouses.

We also need to shut down mises.org – have you noticed how it’s all about Austrian Economics? What about the rest of economics – surely this site needs some balance. We need lies mixed in with reality – otherwise people will just have to consume the truth.

There is a story I read recently about an eco-friendly WalMart store (in Texas?), sounds intersting, but how much do you want to wager that once they get the concept spread far and wide they will begin pushing enviro-legislation just like they want the min wage raised?

“Critics claim that in the event that Walmart goes belly up or has an otherwise poor year, the rest of the industry will feel its effects.”

Yeah, they will feel the effects in their wallet. Who in industry is dissappointed when their competitors are having a hard time?

“They also suggest that the firm would eventually offer other banking services, thereupon “destroying” the local banks.”

Well, just let the local banks open up their own warehouses of goods. Oh they can’t? Well then compete in other ways. Can’t do that? Then close up shop and build an IHOP.

Person April 11, 2006 at 11:28 pm

Empirical prediction based on observation of numerous Wal-Mart threads on libertarian sites:

1) Someone will complain that Swanson didn’t list the genuinely bad things Wal-mart does.

2) Someone will ridicule the ideas of the person in 1) as being socialist.

3) The debate will break down to the point where someone will essentially say all current businesses are evil because they rely on government roads.

I can’t wait.

David April 12, 2006 at 10:27 am

“Walmart is now offering aid to rivals.”

Next step will be the “we’re sorry that we’re evil” commercials a la BP. Talk about sanction of the victim.

billwald April 12, 2006 at 8:00 pm

Walmart reports that 28% of their employees are minorities. I suspect that most of the people who complain about Walmart are white people.

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