Zoo Station

Just another WordPress.com weblog

What Real Power does Wal-Mart have?

Posted by Chance on August 21, 2006

Wal-Mart has been getting many jabs from politicians. I was watching the news the other day and some Democratic legislator was criticizing Wal-Mart because it “had too much power in the hands of a few people.”

Now, I have posted on Wal-Mart before. I have defended Wal-Mart. I do admit though, I didn’t give some criticisms that much credit. The concern that Wal-Mart closes down mom-and-pop stores is a legitimate one. However, Wal-Mart is successful because it gives customers what they want. A free market will not guarantee jobs for everyone, but I do believe it provides customers with products in the most efficient manner possible. Small businesses may not be able to compete according to price, but they will have to be create and compete in other ways.

But back to the claim about Wal-Marts “power.” My claim is that Wal-Mart has no real power over us. No one has to go to Wal-Mart. Does my electric and gas company have some power over me? Sure. I don’t have that much flexibility in choosing my methods of power delivery. If I was a progressive criticizing companies, I would go after them. But, I never have to go to Wal-Mart. Never, ever, ever, ever, ever. Wal-Mart has no power over me whatsoever. None. At no point do I have to go to Wal-Mart. I can go to Target to get similar things. I have the choice of several grocery stores to buy what I need. I can go to Home Depot or Lowe’s for stuff around the house. I can go to Radio Shack or Best Buy for electronics.

To be honest, I rarely go to Wal-Mart. I typically avoid it because it is so friggin’ busy. I am willing to pay a little bit extra to avoid the nightmare that is Wal-Mart. Obviously, because it is so busy, other people make different choices, saving the amount of money they do is important enough to them. I was in their position when I was a poor college student, where saving money was more important than avoiding a busy store. So do many on the lower rungs of the economic ladder.

There is also the issue of Wal-Marts employement policies. This is really part of a bigger issue concerning the free market and workers wages. Again, concerning Wal-Mart’s “power”, workers are free to work at other places.

But say that Wal-Mart did pay their workers more. Then, either Wal-Mart would have to raise prices, or Wal-Mart would make less profit. If Wal-Mart makes less profit, then shareholders are less likely to invest in the store. If Wal-Mart raised prices, then it would defeat what is good about Wal-Mart. As I mentioned earlier, Wal-Mart helps the poor simply by offering products at lower prices. So where is the tradeoff. We can’t have low prices and have high wages. One affects the other. So who decides if higher wages or lower prices are better? I say, let the free market decide.

I realize that many of these issues have to do with one’s overall belief in the free market in general. Personally, I think Wal-Mart is a testament to capitalism’s greatest strengths, providing products as cheaply as possible. But there is the part of Wal-Mart that involves low wages for workers. I personally do not think that is a bad thing, because it provides a workplace for those with little to no job skills. If one feels that people are entitled to a certain wage and health care, then they will not care for Wal-Mart. Personally, I believe the pay at Wal-Mart provides a good reflection of what the employees have to offer.

Again, the success of Wal-Mart is due to the customers. People say Wal-Mart should be held accountable to the people. I believe they are, to the people who shop there. When war is declared on Wal-Mart, war is declared on the shoppers.

Advertisements

6 Responses to “What Real Power does Wal-Mart have?”

  1. The Prophet said

    Interesting post. A democrat had a problem with Wal Mart having too much power in the hands of too few people. It all comes down to their opinion of government. Pretty much, Dems make the same complaint with government and probably always will. But when you take into account how many shareholders Wal Mart has, then I’d say there are a lot of people governing the company. If shareholders pull their money from Wal Mart, the company doesn’t have a leg to stand on. Of course, if Wal Mart continues to do well economically, then these shareholders will keep their money there. Capitalism at its finest.

  2. Dan Trabue said

    What of monopolies and de facto monopolies? As a Libertarian leaner, does this aspect not worry you?

  3. Michael Westmoreland-White said

    My concerns about Wal-Mart (other than what they do to local economies by closing down local businesses):

    1)Their militant union-busting. The right to organize and collectively bargain for fair salaries and labor practices must be upheld. As it is, there are far too many Wal-Mart employees who cannot afford even to shop there.

    2) They obtain those low, low prices by making use of slave labor and other exploited labor above. They have dealt in conflict diamonds in Africa (diamonds mined by slaves at gunpoint and used to finance wars and terrorism); they break ecological laws everywhere; they use prison labor in the U.S. which is another form of slave labor.

    Capitalism at its most typical. “Free” markets are amoral.

    But you are right about one thing: Consumers have the power to stop them. That’s why I am part of the nation-wide Wal-Mart boycott.

  4. Chance said

    “What of monopolies and de facto monopolies? As a Libertarian leaner, does this aspect not worry you?”

    Good question. Monopolies destroy the advantages of a free market. The question I am asking myself right now is if the free market naturally destroys monopolies, or if, in this case, it is necessary for government to step in and break them up.

  5. Chance said

    “1)Their militant union-busting. The right to organize and collectively bargain for fair salaries and labor practices must be upheld. As it is, there are far too many Wal-Mart employees who cannot afford even to shop there.

    2) They obtain those low, low prices by making use of slave labor and other exploited labor above. They have dealt in conflict diamonds in Africa (diamonds mined by slaves at gunpoint and used to finance wars and terrorism); they break ecological laws everywhere; they use prison labor in the U.S. which is another form of slave labor.”

    1) I agree with the right for unions to organize. I also agree with the right of a business to choose to work with non-union members. Now, if all of a sudden everyone at a particular Wal-Mart who is already hired decides to form a union, I don’t think Wal-Mart should stop them unless it specifies so in their hiring contract.

    2) That’s interesting, something I will have to look into. It depends what you mean by slave labor. If in fact, it is slaves, I would have a problem with that. If it is, say a young girl in another country who, if she didn’t have the job for Wal-Mart, would resort to prostitution or something, I would be happy she had the job for Wal-Mart. But we may be talking about different things. A voluntary job with a low wage, while morally questionable, I would not consider slave labor.

    I support prison labor for public purposes, not for a corporation.

    Those are reasonable arguments. To be honest, I have not heard much of those before (slave labor at gunpoint and such). I’ve just heard about the criticisms of them closing down local shops and not paying Wal-Mart workers what the Wal-Mart workers want to make (I wish I could make what I want to make, not trying to be a smart alec…but seriously).

  6. Dan Trabue said

    What if you’re a subsitence farmer in a village in Nicaragua and Walmart opens in the nearby town. They are able to undercut your prices and you can no longer sell your product (which was grown in a manner that did not destroy the ecosystem) in the local market.

    Reduced to a choice between starving and working at the local maquiladora (which makes products for Walmart which you can’t afford to buy), you feel you have to work at the maquiladora.

    But the maquiladora doesn’t have any job protection or environmental protection. You don’t have an eight hour shift, you have a 10,000 widgets quota. You stay until they’re done or you lose your job. Period.

    And you certainly don’t have the option of reporting the pollution that is going in to the local stream from the widget production (which runs down to your village). And even if you did report it, CAFTA’s corporation protection means that the corporation would win in a lawsuit if one were even brought.

    The company flourishes (the corporation, not the workers) because they can sell their widgets at half the price that US widget makers can sell them (because the US still has some labor and environmental protections). And so, while it’s miserable and you wish you could have your old way of life back, you’re not dead from hunger at least.

    UNTIL the corporation finds out that they can get employees to make the widgets cheaper still in Thailand….

    I visited Nicaragua three years ago and this is how the villagers there described their options. Sorta sucky.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: