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Is Walmart a Monopoly?

by rdf Tue Jan 24th, 2006 at 11:29:20 AM EST

The short answer is no, it is a monopsony.

Walmart does not control the national retail market, although it does have a big part of it. It may be an effective monopoly in certain locales where it is the only big box store. But, even then alternatives exist, mail order, shopping further away, using specialty stores, etc.

An explanation below:

As a monopsony it becomes the single buyer in a market. This term is usually associated with a labor market, but also can be applied to products as well. So in a company coal mining town, for example, the company is a monopsony in the local labor market. In pro baseball, "Major League Baseball" has a monopsony in the ball player market. Much of agriculture is run by monopsonies, companies like Cargill and ADM contract with farmers to buy the entire crop at prices determined by the firm. Oil companies operate similarly with respect to drillers and refiners.

In the case of Walmart it has effective control of the production of many of the items it buys. The example of the Chilean salmon farming is the perfect example. Without Walmart the business would not have been created. It is also probable that there are contracts in place which prevent the fish farmers from selling to other suppliers. There are many other stories of companies being forced to change their business practices by Walmart even when the firm only purchased twenty or thirty percent of the total output. Recent stories have concerned Rubbermaid, Haynes, Snapper, and Vlasic, just to name a few.

This economic behavior is occurring more frequently as we move to industrial consolidation and transnational companies. For example the major auto companies are monopsonies with regard to their parts suppliers. Thus, as Ford and GM do poorly their suppliers (Visteon and Delphi) are forced into reorganization. Similarly the cable and satellite TV companies are monopsonies with respect to the channels they carry. Just today the Lifetime channel was forced to take a full page newspaper ad to complain about their being dropped by Dish Network.

Monopsonies produce the same economic distortions as do monopolies, just at the other end of the supply chain. Instead of overcharging customers, they under pay suppliers. This eventually forces the suppliers into uneconomic behavior which leads to poorer working conditions, outsourcing or off-shoring, poor capital utilization and supplier failures.

The US has stopped enforcing the monopoly laws, so pursuing companies like Walmart under them is not only unlikely, but would be the wrong remedy. What is needed is a new series of controls on monopsony power, both domestically and as part of international trade agreements.

This has international impact as well. In the days of United Fruit it was a monopsony with respect to the "banana republics" that it did business with. Today we see the same pattern in the oil business. The relationship between Nigeria and Shell Oil is a good example. As recent social unrest in the region indicates this can have political repercussions as well. When the monopsonies are big enough they can pressure their home countries into helping enforce the firms economic interests. This used to be called "gunboat diplomacy", but now it seems to have been replaced by the IMF, World Bank and invasions as a final resort.

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Is Walmart a Monopoly? | 78 comments (78 topical, 0 editorial, 0 hidden)
Re: Is Walmart a Monopoly? (none / 0)
Good column, Robert.  I'm not sure I'd go so far as to call Wal-Mart a monopsony (or a monopoly).  It still faces competition from Target and, to a lesser extent, K-Mart (which I believe is now owned by Sears).  It will also likely face stiff competition as new companies enter the market in the coming years.  But something I've picked up on in my own experience is that Target seems to be grabbing for a slightly higher-end market, while Wal-Mart concentrates, obviously, on the lower end.

K-Mart is, in all likelihood, doomed.  It's in direct competition with Wal-Mart, and, honestly, it's not much of a competition.  Both are terrible stores that sell garbage, but K-Marts, in my area, are in such poor condition that it seems to be only a matter of time before they shut down.

There's a similar fight going on between grocery chains, at least in the South.  Winn-Dixie is getting smashed by Publix and Albertson's.  Publix dominates the Florida/South-Georgia market in a way similar to Wal-Mart.  People will, literally, drive past a Winn-Dixie to go to a Publix.

Anyway, I wouldn't worry about Wal-Mart's market power.  There was a time when a company called A&P -- I think it was A&P -- dominated the market and eventually crumbled.  Someone will build a better mousetrap.  It's not a market that lends itself well to being dominated by a single firm.  Microsoft, for example, has far greater control over the operating system market than Wal-Mart has in retail.  Wal-Mart receives too much attention.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jan 24th, 2006 at 02:08:47 PM EST
Re: Is Walmart a Monopoly? (none / 0)
Drew:
You are arguing against Walmart being a monopoly which is something I said at the outset I don't think is true.

I suggest you read the most recent series of essays by Jonathan Rees at The Writing on the Wal
about Walmart's treatment of suppliers.

Also there is a new book out by Charles Fishman "The Walmart Effect" which details Walmart's strong arm tactics with suppliers.

Neither of these writers calls Walmart either a monopoly or monopsony, that's my doing.
I think monopsony power is going unrecognized even though it has become very prevalent worldwide. Just think of the large number of contract factories that have opened in Asia to supply a single (or very few) large companies. All the popular brands, Nike, Levy's, etc. use this model. It's not just the off-shoring, but the relationship between the buyer and the seller that has changed.

A&P was an earlier model and it got into trouble because of it. It's behavior resulting in corrective legislation. See here:
http://en.wikipedia.org/wiki/The_Great_Atlantic_and_Pacific_Tea_Company

My point, as usual, is that unbalanced concentration of powers can only be corrected by appropriate government intervention. Yours seems to be that things will sort themselves out, eventually. I'm afraid history is not on your side.

The reason I cross-posted this essay on ET is because I think the issue of monopsony abuse goes beyond Walmart and affects all countries. The stronger need to look into possible abuses and the weaker need to see if they are being taken advantage of.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Tue Jan 24th, 2006 at 02:50:34 PM EST
Re: Is Walmart a Monopoly? (none / 0)
I guess this is just adding to what you are saying but even if some company outdoes Walmart (in the market fixes all scenario) and replaces them, they just become the new monopsony.

In fact, I think this is a pattern in certain industries (auto springs to mind) that competitive changes are just changes in the monopsony holder.

by Metatone (metatone [a|t] gmail (dot) com) on Tue Jan 24th, 2006 at 04:11:44 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
In essence, yes, I'm saying this will remedy itself, based upon the nature of the market.  Retail is not an inherently monopolistic sort of market -- hence my statement, "Someone will build a better mousetrap."  The long-run concentration of power is dependent upon the nature of the market.  In (say) the operating systems market, the need to have a standard trumps prices, since businesses have to be able to communicate properly.  Ergo, Microsoft can maintain its near-monopoly power.

(I submit to you that it is a mistake, on Microsoft's part, to engage Apple in the office applications market, because it makes the problem of moving to the Mac operating system less severe -- thus allowing the possibility of the "pros" outweighing the "cons".  But Bill Gates has covered his ass, here, in that he has invested a great deal in Apple.)

On the other hand, there is no such need in retail.  If you can produce better clothes (or prescriptions, or tools, or whatever) at lower prices -- and someone will -- you can beat Wal-Mart.  True, it will take an enormous level of investment and one hell of a commitment, but it can, and will, be done.  I'll place a gentlemen's bet with you that, ten or twenty years from now, Wal-Mart will not dominate the market.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue Jan 24th, 2006 at 07:21:54 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
this is somewhat like the endless arguments (though this one is brief so far) over whether BushCo counts as "fascist" or not, whether the US is becoming "fascist" or not, does it fit the definition, etc.

the real question is, does Wal*Mart wield enough power to exercise unelected, unaccountable centralised planning authority over the marketplace, i.e. do Walmart elite planners privately make decisions which control the supply, price and quality of goods rather than allowing customer choices and the "free market" to work?  and I think the answer is very plainly Yes, whether we call this monopoly or monopsony or oligarchy or just Bullying:  the issue is control and power, or the centralisation of control and power into the hands of a small unaccountable elite.

the same bullying will almost certainly manifest in any business enterprise allowed to grow beyond a certain size.  it will by sheer market share exercise "undue" influence over the marketplace, restricting consumer choice and meddling in the affairs of smaller businesses.  another good example would be the 2 giants Borders and B and N, who in the US publishing market are no longer just book sellers, but are invited by some publishers to preview and judge the proposed list for the coming year;  promising authors can be rejected, and house editors' judgment overturned, by the marketing departments of these two retail bullies.

a side effect of this bullying behaviour is that innovation will be stifled as the lumbering behemoth, driven by its simplistic profit motive [the lowewt common denominator that holds together a huge corporate monoculture organisation where personal quirks and passions are verboten] and beholden to ever-larger groups of investors and interests, will be loath to take risks.  it will use its undue influence to stifle competing products and businesses;  and as with US publishing, TV, and movies, the largest outfits will stick to recycling the same old formula that succeeded last year and the year before that.  Gargantua will be most unwilling to risk anything on new talent or unusual ideas, and unable to change its organisational direction any faster than a BCC.  the cultural stodginess and tedium of the old Soviet Union was imho partly ideological and partly an inevitable byproduct of gigantism and bureaucratic, centralised management:  the Peter Principle works itself out most fully in large organisations.

I'll propose the following: when any commercial enterprise reaches a certain critical threshold of size and power, it should either be broken up into smaller competing firms or nationalised.  if it is to remain a giant, it will exercise government-like power over lives and buying decisions, and should therefore be broken to the bridle of the democratic process -- with full transparency, citizen oversight, elected officials, and strictly limited profit margins.  below a certain size, a business should be allowed to pursue independent policies, take risks, grab for high rates of return at high risk, and frolic in the free marketplace of ideas and goods with its competitors.

good candidates for nationalisation and public utility status:  centralised energy, public transport, telecomms infrastructure, water delivery and treatment, policing, firefighting, security.  bad candidates for nationalisation:  restaurants, theatre, the arts, farming, publishing and newspapers.

any takers?  where would the size threshold be?  what else aside from size distinguishes good vs poor candidates for nationalisation?

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Tue Jan 24th, 2006 at 07:43:46 PM EST
Re: Is Walmart a Monopoly? (none / 1)
Regardless of the threshold you choose, Microsoft is going to be way over it. Until the US and Europe show some ability to face down Mr Gates, discussion about WalMart's position is virtually pointless.
by asdf on Tue Jan 24th, 2006 at 08:32:15 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (4.00 / 2)
Salon.com has a very good article about Chilean salmon for Walmart. The article is actually an excerpt from the book "The Wall-Mart effect" by Charles Fishman.
[..] The salmon is a "farm-raised product of Chile," according to the sign, and it's fresh. It managed to get from southern Chile to a small town seventy miles outside Philadelphia - more than five thousand miles - without even being frozen. The salmon fillets are priced at $4.84 a pound. Almost any American over thirty is old enough to remember a time when you could hardly buy a quarter of a pound of salmon for $5.00. Any American over forty can recall an era when salmon was a delicacy. A half pound of smoked salmon, the kind you'd put on a bagel, might have cost $16.00 or $20.00. But there it is, in the Wal-Mart display case -- pink, oily, and alluring -- salmon fillets for $4.84 a pound. That's not a special; it's the everyday low price, and available in most supercenters from one end of the country to the other. It's a couple of dollars a pound cheaper than farm-raised salmon at a typical supermarket. It's less than half the price of the farm-raised salmon sold by Whole Foods.

Salmon for $4.84 a pound is a grocery-store showstopper. If prices contain information, if prices are not just a way of judging whether something is expensive or affordable but contain all kinds of other signals about supply, demand, prestige, and even the conditions under which products are made (bad freeze in Florida, expensive orange juice; hurricane on the Gulf Coast, expensive gasoline), then salmon for $4.84 a pound is a new, unintended Wal-Mart effect. It is a price so low that it inspires not happiness but wariness. If you were so inclined, you couldn't mail a pound of salmon back to Chile for $4.84. It's a price so low, it doesn't seem to make sense if you think about it for even a moment. Salmon at $4.84 a pound is a deal that looks a lot like a gallon jar of Vlasic dill pickles for $2.97 -- it's a deal too good to be true, if not for us as the customers, then for someone, somewhere. What exactly did Wal-Mart have to do to get salmon so cheaply?

"Five years ago," says Rodrigo Pizarro, "salmon wasn't on the list of exports. Chile didn't have any salmon twelve years ago." Pizarro is an economist who heads Terram, a Chilean foundation dedicated to promoting sustainable development in Chile. Understanding the impact of salmon farming is one of Pizarro's most urgent projects. When he says that twelve years ago Chile didn't have any salmon, he's not exaggerating for effect. He means it literally.

Not only is the Atlantic salmon not native to Chile -- the Chilean coastline, of course, runs along the Pacific -- but as Pizarro puts it, "Atlantic salmon is an exotic species in the whole Southern Hemisphere." The Atlantic salmon doesn't appear naturally anywhere south of the equator. Farming salmon in Chile is a bit like farming penguins in the Rocky Mountains. Now, however, not only are there far more Atlantic salmon in Chile than people, there are ten times as many, maybe even one hundred times as many. More salmon are harvested in Chile now than anywhere else in the world, including Norway. Even as the price has drifted down, the value of Chile's salmon exports has risen nearly 70 percent in five years. Chile wants to increase the amount of salmon it exports by 50 percent again by 2010.

I could copy all 3 long pages of the artcile...

But the article indicates that it is not really so that "without Walmart the [Chilean salmon] business would not have been started":

If you look at the growth of three things between 1990 and 2005, the graphs are near perfect shadows of one another: farmed-salmon production in the world, farmed-salmon production in Chile, and Wal-Mart's grocery business. They all start low on the scale, and go almost vertical after a few years. Wal-Mart did not create the farmed-salmon business; Wal-Mart did not plant the salmon farms in southern Chile. But the dramatic growth of domesticated salmon drove down prices for salmon and fed Wal-Mart's ability to deliver salmon to the fish counter; and the dramatic growth of Wal-Mart's grocery business created a huge opportunity, and a huge appetite, for salmon that has fed the salmon-farming industry.

What I am concerned most is the ecological effects. James Lovelock, the author of the controvercial Gaia hypothesis, had said that the most crucial part of Gaia's mechanism are the oceans/seas, since the water covers most of the survace, contains half of the biomass, and provides key chemical feedbacks. Especially arable regions of continental shelves can be vulnerable. Look what is happening in Chile now:

"Have you ever seen a hog farm?" asks Gerry Leape, vice president of marine conservation for the National Environmental Trust, a Washington-based environmental nonprofit group. "These fish [salmon] are the hogs of the sea. They live in the same sort of conditions, it's just in water. They pack them really closely together, they use a lot of prophylactic antibiotics, not to treat disease, but to prevent it. There's lots of concentrated fish waste, it creates dead zones in the ocean around the pens." [..]

"The density of fish depends on the nation, but they grow tens of thousands of fish per net, 1 million or 1.5 million per farm. Then they all go poo. There is a huge amount of waste going into the ocean. People say, oh, that's natural, all fish go poo in the ocean. But not in that kind of concentration. It just smothers the seabed." One million salmon produce the same sewage, says Leape, as sixty-five thousand people.

The ocean pens suffer from another source of pollution -- excess feed. Any food that isn't consumed settles to the ocean floor, adding to the layer of feces. The waste itself contains residues of antibiotics and other chemicals used to keep the fish healthy during the two years it takes them to grow to harvestable size.


by das monde on Wed Jan 25th, 2006 at 01:12:46 AM EST
Re: Is Walmart a Monopoly? (none / 0)
There's a review of the Fishman book and another one on Wal-Mart in the SF Chronicle:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/01/22/RVG9QGMOMN1.DTL

It's pretty good if I do say so myself.

"The end of all intelligent analysis is to clear the way for synthesis." H.G. Wells "It's not dark yet, but it's getting there." Bob Dylan

by Captain Future (captainfuture is at sbcglobal dot net) on Wed Jan 25th, 2006 at 06:03:30 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
Since we're on the subject, as well as the supply, I'd also like to mention the "demand" side.  People in the cities keep wondering why anyone would shop there, but they're really capitalizing on the misery of small, dying towns.  I call it economic strip-mining.

They go into these places, promising jobs and reasonable prices, and they get all kinds of tax breaks.  While they're open, the smaller businesses die off.  When the tax breaks expire, they just abandon the towns.  

A family member of a friend of mine is a Republican Mayor of just such a town and he's been fighting tooth and nail to keep Wal-mart out.  He lost.  Local stores are laying people off before the damned Wal-mart is even open.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 02:05:17 AM EST
Re: Is Walmart a Monopoly? (4.00 / 2)
It's called predation... Wal*Mart and its ilk run down the weak of the herd -- towns with struggling economies, small businesses -- rip their guts out, feast, and leave the carcass for the crows and hyaenas, moving on to the next kill).  It's a mode of interaction that's frankly maladaptive when exercised within the kin group...  families that eat their own family members don't survive as well to pass on their genes as families who cooperate.  I think we can see by the current parlous condition of the US economy that the predation model seriously weakens the state that permits it to be practised freely.

BTW, I should note (on the salmon theme) that the fodder source for many of these fish farms is ocean-caught fish, i.e. the product of the indiscriminate slaughter conducted by factory trawlers.  Farmed salmon does not necessarily alleviate the pressure on wild species;  the wild species, regardless of size, age, or rarity, are "harvested" (stripmined or clearcut would be a more accurate term) to make food for the factory fish.

Also the salmon farming industry is one juicy target for the gene vandals;  the "invention" of mutant faster-growing salmon was originally for factory farming purposes (to accelerate the life cycle of the fish and reduce the time from spawn to marketable meat).  Of course these mutant fish are not going to stay neatly confined in the coastal farms, and in the wild they will compete successfully and outbreed indigenous salmon varieties, or other native fish species.

It's worth remembering that the fish species we like to eat are almost all top predators in their marine or river niches.  Eating them as a staple food is like eating lion, or bear, or wolverine as a staple food.  They are relatively rare and play a key role in functioning food chains.  Their elimination or reduction to pathetic levels has enormous destabilising impact because of their predator role...

At the same time, human activity is chopping and chipping away at the very bottom of the ocean food chain, (1) by global warming which threatens plankton populations worldwide in warming waters, (2) by nitrate and pollutant runoff which creates enormous dead zones off many industrialised coasts, and (2b) by antibiotic and estrogen-mimicking compounds which interfere with disease resistance and with reproduction of marine species (3) by incredibly destructive bottom-dragging nets which literally scrape all life off the seabed in a wide swathe, destroying hundreds or thousands of species to get at a few valuable "catch" species (a kind of "collective punishment" applied to hunting, like fishing with dynamite).

It is sheer vandalism, and all so that proletarians in the wealthy countries can emulate the diet of aristocrats of a generation or two generation ago...

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Jan 25th, 2006 at 02:55:28 AM EST
[ Parent ]
Re: Diet of Aristocrats (none / 1)
Until the first decade of last century Cologne/Bonn/ Koblenz chamber maids and kitchen staff were very attentive not to sign employment contracts if it contained a clause obliging them to have salmon for lunch/dinner more often than three times per week.

As to Walmart in Germany, here is what the Economist writes:

"In Germany, Wal-Mart ended up with egg on its face. Even Mr Scott has admitted that the company's arrival was "somewhat embarrassing", although the situation is improving. Wal-Mart entered Germany, the third-biggest retail market after America and Japan, in 1997-98 by buying two local retail chains, Wertkauf and Interspar, for $1.6 billion. Whereas Wertkauf was well-known and profitable, Interspar was weak and operated mostly run-down stores. Wal-Mart has lost money in Germany ever since. Problems have included price controls, which prevent below-cost selling, rigid labour laws and tough zoning regulations, which make it extremely difficult to build big stores.

Wal-Mart also faced well-established rivals in Germany, like Metro, and hard discounters such as Aldi and Lidl, already comfortable with razor-thin profit margins. Many retailers in Germany are owned by wealthy families whose business priorities are not always the maximisation of shareholder value.

But there was more to it than that. Wal-Mart's entry was "nothing short of a fiasco", according to the authors of a study at the University of Bremen. At first, Wal-Mart's expatriate managers suffered from a massive clash of cultures, which was not helped by their refusal to learn to speak German. The company has come to be seen as an unattractive one to work for, adds the study. In part this is because of relatively low pay and an ultra-frugal policy on managers' business expenses."

When Walmart first came to Germany they asked employers to attend morning staff meetings where they were supposed to hold hands and sing the 'Wally hymn'. It did not work, the employees wouldn't do it. They considered it Kindergarten paedogogics. And still worse: They were derided by their friends, who made jokes about them. The next desaster was the Wally staff guideline on sex at the workplace. The unions sued the company and won the case. It was largely reported by the press as a prudish AngloSaxon attempt to de-humanise and illegally control inter personal staff relations at the workplace.

Moreover Walmart is seen by the public as selling cheap imported crap of low quality. They have not managed to compete with Aldi and Lidl, which also sell cheap stuff but which is considered of top quality.

I was curious enough to drive to one of the few German Walmart stores last summer. It looked very 'Russian' to me. I found that the hyper-market had the atmosphere of a soviet style supermarkt as I had seen it in East Berlin on Alexanderplatz before German re-unification. Huge piles of worthless cheap crap. It would have sold in Prague and Bucarest until five years ago. Since then people have ever more become acustomed to the West European aesthetic standard of product displays, which is less chaotic and more eye catching than the Walmart display.

Product display at Centrum supermarkt Berlin/DDR

 

"The USA appears destined by fate to plague America with misery in the name of liberty." Simon Bolivar, Caracas, 1819

by Ritter on Wed Jan 25th, 2006 at 05:57:55 AM EST
[ Parent ]
Re: Diet of Aristocrats (none / 0)
Not really directly relevant but I just thought I'd mention that I found food shopping in Germany (Koblenz, Bonn) to be a miserable experience. You could choose between very poor quality and poor selection supermarkets for a reasonable price, or good quality but quite expensive city center specialty shops and open air markets. It was funny, going on my research stay I was dreading the shopping experience in Poland but it never occurred to me to be worried about Germany. Poland was fine - full mix of supermarkets from very cheap low end ones to great high end ones with what by NYC standards are reasonable prices, whether local minichains or massive Carrefour stores. (I'm a bit of a food nut and love to cook so this was a pretty important issue for me)
by MarekNYC on Wed Jan 25th, 2006 at 04:33:32 PM EST
[ Parent ]
Re: Diet of Aristocrats (none / 0)
Interesting. When were you in Bonn? When I lived there it took me a while to find good supermarkets as they were a bit hidden (I lived a bit out of the centre tho) but once I found them, all was well. I'm also a bit of a food nut, so it's not like I'm completely easy to please.
by Metatone (metatone [a|t] gmail (dot) com) on Wed Jan 25th, 2006 at 05:29:26 PM EST
[ Parent ]
Re: Diet of Aristocrats (none / 1)
I was in Bonn a couple years ago. I stayed there for two months after four months in Koblenz. I can't remember the name of the village/suburb where I lived but it was a good ways up the Rhine (i.e. south) from the city on the east bank of the river. I had no car so my exploring was   a bit limited. I didn't really mind paying high prices since I was living in very cheap accomodations - much cheaper than I expected or wanted - the only furnished short term rental I could find in Koblenz was a basement room with a sink and two burners and a shared bathroom in the hall. But it worked out to about $200/mo so I was flush with cash.
by MarekNYC on Thu Jan 26th, 2006 at 11:37:26 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
There's more to it than that.  Many of these small towns are crippled by economies that are not diversified.  The Carolinas are a perfect example.  My father, who used to be an accountant for a retail and real estate company in Miami and Columbus (he now owns his own small business), liquidated a few bankrupt textile companies -- Pillowtex the largest among them; that story was all over the news -- a few years back for his old boss.  (The equipment was bought by two companies -- one from South Korea, the other from Germany.)  It, literally, took over half the jobs out, and one of the towns, Rocky Mount, was left with little more than a McDonald's.

You see the same thing in Michigan's old auto towns, like Flint (home of Michael Moore and the subject of his movie, Roger & Me, which I highly recommend).  Flint was once a perfect example of middle-class, suburban, blue-collar America.  Today, it has one of the highest murder rates in the country, and its fall began when GM pulled its Buick plant out in the late-1980s.  The city had no other economic activity.

The problem is deeper than Wal-Mart.  Wal-Mart is simply a chain of stores that sells cheap shit.  What's happening in small-town America goes well beyond any damage Wal-Mart might cause.  Mom & Pop businesses die when Wal-Mart comes to town because consumers choose low prices and brand names.  Now we can say this is monopolistic, in practice.  But it's really not, when you consider the outcome.  Wal-Mart is simply able to beat the other companies' prices, which is what is supposed to happen.  If Wal-Mart attempted to set prices too high, the low barriers to entry, coupled with innovation, would allow other firms to move in (as they will).

It's one thing to call everything out as being the fault of Wal-Mart.  I don't even shop at that store, because it's impossible to walk through the aisles due to the high concentration of overweight hicks and their obnoxious children who have a tendency to run shopping carts into the back in my ankle.  (It also doesn't carry my beer of choice, and the meat selection is just pathetic compared with Publix.)  But I don't blame Wal-Mart for these issues.  Wal-Mart is a company, and companies are best viewed as machines rather than living beings (in other words, stick to the positive over the normative -- it is what it is).  The real question to ask is, What are we going to do about it?  Are we going to regulate the shit out of Wal-Mart?  I think that would be a mistake.  You'll only end up raising prices on poor people, and, frankly, they need lower prices whenever possible.

No, what we need to do is build on the educational base, and expand it (that includes adult education and training).  We also need to rebuild infrastructure, because, at least in America, infrastructure spending has been woefully inadequate for thirty years, and counting.  It's time to stop playing short-run games with long-run issues.  Instead of criticizing a system that generally works well, we should be seeking to build and improve upon it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 12:10:49 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Great post. We have
  1. a refutation of Division of Labour and Comparative Advantage because specialization due to trade leads to loss of resilience of local economies
    Many of these small towns are crippled by economies that are not diversified.
    And
  2. a call for government spending in education and infrastructures
    No, what we need to do is build on the educational base, and expand it (that includes adult education and training).  We also need to rebuild infrastructure, because, at least in America, infrastructure spending has been woefully inadequate for thirty years, and counting.
    Maybe we need to rethink the free movement of capital, goods, services and workers, given that (as Adam Smith said: always back to the good old guru of liberalism) labour is the least easily transported of all factors of production.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 12:30:04 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Labor also thinks for itself, unlike capital.  Capital is a planned input, one-way.  Labor requires negotiation and conscious decision making on the part of the input.

Services, as a practical matter, are also not moved very easily, in many cases.  An Indian operator may be able to take over the job of Dell's customer service, but he can't put your money in the cash register at Wal-Mart, or sell you a phone at Nextel, or fix your iPod at the Apple store, or whatever else you may need.  You can't, for example, outsource the work of a locksmith.

I don't see what you mean by a refutation of the Division of Labor and Comparative Advantage.  Both are largely true, in my opinion.  In many cases, the economic losses in these small towns are the result of the citizens having elected a state or local government made up of total fools.  Rural states have skewed their policies, usually in favor of agriculture, and, today, they wonder why all they can produce is heavily-subsidized agriculture.  (Gosh, that's just shocking, "in'nit"?)  Hence why I've made it a habit to attack rural, Red-Staters as being the true "welfare queens" (to use Ronald Reagan's words), because they're completely dependent upon the tax dollars of urban, coastal cities (the Blue States, or the Blue areas of Red States).

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 01:38:34 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I mean, division of labour and comparative advantage lead to specialization which leads to loss of resilience. Since Labour is the least mobile of the factors of production it is also the one that bears the brunt of the consequences of lack of resilience when the conditions change. Labour is people which means it is the one factor of production where ethical considerations are most important. You can't have resilient local economies and, at the same time, global pressures towards specialization.

I could try to write a diary about this, but it would be exclusionary.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 01:51:05 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
There's more to it than that....  The problem is deeper than Wal-mart

I never said the whole thing was Wal-mart's fault.  Still if a mugger robs a poor guy of his rent money and the guy ends up homeless, do we give the mugger a pass because he's not responsible for the guy being in trouble in the first place?

You describe a lot of valid problems with small towns and the economy.  No one's saying Wal-mart caused them nor that getting rid of Wal-mart would fix them.

Still, as I said before, they're capitalizing on the problem and making it worse.  I called it economic strip-mining, DeAnander called it predation -- whatever you want to call it, it's a bad thing and they deserve as much criticism as we can dish out.  They are part of the problem.  They're making things worse and a pretty big scale.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 02:22:44 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
But let me ask a question: What happens if Wal-Mart pulls out of these small towns?  Suddenly, a situation of having low-paying jobs is replaced by a situation of having no jobs -- turning a depressed economy into a collapsing one.  Wal-Mart is, in no way, analogous to the mugger robbing the poor guy.  The mugger is breaking the law by stealing.  Wal-Mart is moving into a market where it believes it can turn a profit by selling goods and services at lower prices than its competition.  Consumers buy the cheaper products, and Wal-Mart turns that profit.  I don't follow the reasoning behind Wal-Mart being part of the problem.  The problem is that small-town economies have historically been dependent on a given industry -- cars, textiles, agriculture, and so on.  Now that businesses are able to produce the same goods, at lower prices, overseas, those small-town economies are left with nothing.  Wal-Mart is not strip-mining these small towns.  It's taking advantage of a labor surplus.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 02:51:25 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I'd still make the same argument about specialized economies and resilience. The path of least resistance leads to specialization and loss of resilience, and then when the path of least resistance leads to the coal mine, Ford or Walmart to pack up and leave you have a huge problem.

So clearly just because the market is good at picking out the path of least resistance doesn't mean the market is best, or even good.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 02:57:28 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Don't let the minor detail of what's legal stand in the way of seeing the truth.  30 years ago, most of Wal-mart's current business practices would have been illegal.  

The only difference between them and the mugger is that they had the clout to get the laws changed to allow them to mug people.  In that way, they're worse than the mugger -- he has no clout that would let him get his actions written into law.

Wal-mart can and does pull out of these small towns all the time -- it is strip-mining because they're capitalizing on the collapse.  They hasten it by causing the surrounding businesses to close and taking whatever public funds they can get with them when they leave.

These things aren't just an unfortunate situation that Wal-mart finds itself in -- they count on the desperation as part of their business model.  

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 03:09:45 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
30 years ago, most of Walmart's current business practices would have been illegal.

What are the business practises that were illegal, that were changed and Walmart now benefits from?  

Honest question, no spin. :-)

by wchurchill on Wed Jan 25th, 2006 at 07:15:17 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
OMG -- where do I even start?  If you look at the landscape, the protections for labor were very different 30 years ago than they are now.  That's not because of workers -- it's because of business fighting, challenging, and gutting the regulations.  It's been a tidal wave of court battles -- some big, some small.

In general, full time workers received healthcare, pension, and other benefits, as well as certain protections regarding hiring and firing, and things like sick leave, maternity leave, and vacation time (remember that?).  

There were regulations so businesses couldn't subvert the law by, say, hiring all their employees for 39 hours a week.  There were also rules about who, why, and for how long someone could be hired as a temp or a sub-contractor.  Remember when temps were actually, y'know, temporary workers?  filling in for someone on vacation?  And this doesn't even touch on outsourcing, etc.

Now it's just a free-for-all -- at least down here with the hoi polloi.  It's not just Wal-mart, they're just one of the big guns.  But it's basically been a class war, although if you point it out, people accuse you of instigating a class war.  That's why it's taken so long to notice it if you aren't on the front lines.

If you seriously want to know about this, you have a lot of reading to do.  I suggest you start with the congressional pdf report linked on this page.  Here's a summary (bold is mine):

The report also provides a comprehensive review of Wal-Mart's numerous anti-worker practices, including union-busting activities, discrimination against women and disabled workers, violation of child and undocumented labor laws, unpaid overtime, and unsafe workplace policies, like locking workers into stores overnight. Wal-Mart has been the subject of thousands of lawsuits and critical media scrutiny on all of these issues. The Washington Post just reported on labor abuses in China at the hands of Wal-Mart.


Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 07:56:38 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I was specifically trying to understand this point in your comments: 30 years ago, most of Walmart's current business practices would have been illegal.  Because my impression is that the legal changes have generally benefited, and not inappropriately, workers.
In general, full time workers received healthcare, pension, and other benefits, as well as certain protections regarding hiring and firing, and things like sick leave, maternity leave, and vacation time (remember that?).
If I might challenge your first two points on healthcare and pensions, there have not been changes in our laws that have disadvantaged workers on these two points.  There was no requirement 30 years ago, legally, for companies to provide healthcare or pensions.  Many did of course, because they were competing for employees in the marketplace, trying to offer competitive pay/benefit packages.  But I personally worked a number of jobs in the '60's and '70's that did not provide healthcare or pensions.

Regarding sick time and maternity leave, I think these issues have been more state by state, but the laws have improved these benefits for employees.  And on vacation time, there have been no laws taking away vacation time from the '70's, compared to now--and believe me, I do remember that.

You also mention a report that links to a "congressional report", which I reviewed.  the congressional report is actually not a congressional report, it is a report by a particular democratic congressman that is replete with inaccuracies, and obviously pro-union to the point of distorting the facts.  This article should be compared to the Walmart website to at least get both sides of the story.

by wchurchill on Wed Jan 25th, 2006 at 09:12:56 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Illegal, in a general sense, does not necessarily mean criminalized.  I'm using it in the sense that the rules and the enforcement of the rules were much different 30 years ago.  So even though steps may have been taken "legally" to change the climate for labor, it does not change the fact that what is allowed now was not allowed then.  Obviously, you know quite well how things have changed over 30 years.  If you want to insist it's not harmful, fine.  You and I simply disagree.

I'm sorry if I used the term "congressional report" to describe a report from a congressman.  Honestly, wchurchill, when you get in an argument, you make SWEEPING generalizations, false assertions, and then demand absolute proof and accuracy from everyone else.

I'm glad things are fine in your world.  You're among the elite.  If you have a genuine interest in finding out what the state of things is for the majority in this country -- do your own fucking research.  The fact that Wal-mart workers get shitty treatment isn't really in dispute by anyone but assholes.  I'm not going to argue about it.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 09:26:01 PM EST
[ Parent ]
p.s. (none / 0)
This article should be compared to the Walmart website to at least get both sides of the story.

This is ridiculous.  Look at the four pages of fucking sources at the end of the report.  

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 09:35:50 PM EST
[ Parent ]
Re: p.s. (none / 0)
You're among the elite.  If you have a genuine interest in finding out what the state of things is for the majority in this country -- do your own fucking research.  The fact that Wal-mart workers get shitty treatment isn't really in dispute by anyone but assholes.  I'm not going to argue about it. .....This is ridiculous.  Look at the four pages of fucking sources at the end of the report.
I think this falls into the category of Dodo rules on when one does not need to reply,,,I'm so tempted to respond to these points (it's just so hard to not say that I worked in retail in the '60's and '70's--shut my mouth--I should do my own research, like I don't know Walmart and have friends that work and shop there, being the elite that I am),,,,but I'll let my initial comments stand.
by wchurchill on Wed Jan 25th, 2006 at 09:54:37 PM EST
[ Parent ]
Re: p.s. (none / 0)
Fine.  Take the high-road you bastard... grrrr.

You're right.  I apologize.  My remarks were over the top.  But for some reason I find you particularly infuriating.  That's not an excuse, just an explanation.  And it's probably because you don't seem like a bad sort otherwise.  If you really were just an asshole, I could ignore you quite easily.

That said, you should read some of the links in the sources of the pdf.  To state that you don't think Wal-mart workers are unhappy when over half of them live below the poverty line, or to question whether their practices now would have been allowed 30 years ago seems... disingenuous at best.

Anyway, there's good reading in the sources.  I'm browsing through the PBS one now.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 10:02:23 PM EST
[ Parent ]
another p.s. (none / 0)
it's just so hard to not say that I worked in retail in the '60's and '70's--shut my mouth--I should do my own research, like I don't know Walmart and have friends that work and shop there, being the elite that I am

Oh, but you did mention it!  And it has nothing whatsoever to do with whether or not you're among the elite.  From what you've said on this site, you've attended the whositz school of economics, you've travelled, you've been in charge of companies and hiring and firing people, you live in the Bay area, and you invest in the stock market.

None of these says anything about you as a person, but you're certainly in a privileged position, by your own telling of it.  Still, it's your lack of understanding of how the lower half live that betrays you... <ducks and runs>

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 10:13:17 PM EST
[ Parent ]
Re: another p.s. (none / 1)
ah, Izzy, you really are great,,,clever, funny,,,bright,,,on and on.  I literally smile and laugh out loud at some of your comments.  And I also sense you are kind and generous.  Sometimes emotional and quick to anger, (not bad traits, and I am the same).  But I imagine you have a group of very bright friends that consider themselves lucky to be your friend.

I often don't know where to start responding to some of your comments, because I have so many comments, but can't write all night, or take up all this space on ET.

First regarding your comments on me, and I don't want to say to much here, but you're basically right accept for the "lack of understanding of how the lower half live that betrays you".  At least I pray that is true--the lack of understanding part.  I guess over the course of writing on these blogs one might reveal more about oneself that intended.  But you have recounted a part, and it is true.  I've waited tables, worked retail (liquor stores), worked heavy factory work (great and needed money at the time--a teamster, btw), and many more jobs like that.  Saved the money to go to school, undergrad and grad,,,worked my way up through business,,,jobs in Europe that were eyeopening (culturally and in business), and have finally,,,ended up, I guess, "elite" in a financial sense.  But don't feel elite, because my friends, in addition to successful business friends, are friends like i've always had.  I was pretty happy when I waited tables,,and i'm pretty happy now.  For me, life is life--I take some pride in success,,but at the same time know others are more successful,,,and still others far better than I have achieved less financial success--often more core, spiritual success.  

I only say that in response to your comments.  I do know the lower end of the financial scale--the retail and the physical work.  And actually it always helped me in business, because I admire people at all levels, truly.  People seemed to see that, and share things with me, regardless of my position.  (which is a huge advantage in senior positions in business--understanding the view from the production line, to the sales force to the customer).  My friends I worked with on the production line were real people, just like my friends in offices later in life.  

I say that to acknowledge that the comments you made, my retail life to my in charge of companies life to my life today, are in fact accurate.  

I have a view as to why you and I, and many others like us, have such contrary views on Walmart.  Walmart is a retail store, it competes in a retail market,,,,it should not be expected to pay a lot more than the average retail salaries and benefits.  Their jobs should not be compared to jobs in other industries.  They don't compete for employees with Intel, General Motors, Merck, etc..  They compete with a lot of Ma and Pa's, Target, Walgreens,. etc.  And, in retail, lots of people want the part time jobs, the odd hours, etc. because it fits with the rest of their life--raising kids, a second job, going to school, or whatever.  So I think if these studies that are made by the Congressman were made to Walmart's market for employees,, to its competitors, they would be the same or favorable.  It's just a fact that retail jobs at the lowest levels (stocking, cash register) pay below the "American" poverty line.  that's true now, and it was true 30 years ago.  I would really like to see some employee satisfaction data from Walmart employees--my sense based on admittedly very small sample size, and some feedback from people who know people who work at Walmart, is those employees feel fairly treated.  

Regarding Walmart's other competitive practises, I don't think I can add much more to what Drew has said above.

Do you personally know any Walmart employees, or know people that shop at Walmart?  My limited experience on both fronts (granted, very limited) is they have happy customers, as well as employees who feel well treated.  I guess the fact that they are the nation's largest retailer would substantiate the customer side.  And where I live on the West Coast, the lines to get hired at a new Walmart near me would seem to attest to the employee side.

Anyway, apologies for the length of my comments,,,and maybe for infuriating you (but maybe not--this dialogue may be good for both of us).  Thanks for making me laugh at your humour, and think about your comments.

by wchurchill on Wed Jan 25th, 2006 at 11:51:18 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Two replies.

  1. To Drew again: You repeat some of the conventional wisdom about Walmart (low prices, etc) which are only partially true. The issues with Walmart are, unfair labor practices, unfair subsidies from local governments in terms of tax breaks and infrastructure improvements, low prices only when they need to be (that is there is a strong competitor in the region), substitution of lesser quality items to keep the price down compared to others, and excessive pressure on suppliers to keep prices low.

  2. The last item was the main theme of my original essay. Walmart has become so strong that it causes suppliers to  commit economic suicide to meet their demands. The owners of the failed business, in effect, subsidize Walmart because it can then use a new supplier until the cycle is repeated. Walmart gets the benefits, the supplier's backers take the risk.

I tried to offer examples in other industries so that this would not turn into another Walmart bashing thread. Excessive buyer power has been around for a long time, but has now expanded to be a global phenomena and I think its impact is not fully realized. Even the EU is focused on monopoly power which is only half of the picture.

I'm not going to repeat all the references to my allegations about Walmart's misbehavior, a quick search will reveal all the sites devoted to this in detail. One can not praise Walmart as an exemplar of the free market model if it achieves it's success by breaking the rules.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Jan 25th, 2006 at 12:39:00 PM EST
Re: Is Walmart a Monopoly? (none / 0)
It's only breaking rules that the local governments allow it to break.  The unfair labor practices are unfair, only in the case of illegal immigrants being hired illegally.  Otherwise, the workers do not have to take the jobs.  There may not be any others jobs left, and so the worker will make his/her decision.  But there's nothing unfair or illegal about this.  Wal-Mart is simply capitalizing on a soft labor market and a demand for its jobs.  This is a textbook concept.

It forces suppliers to set prices extremely low, but that, too, is not unfair.  The suppliers don't have to put their goods on Wal-Mart's shelves.  They may go out of business if they do not, but, again, that's a choice they must make.  What you call unfair is really the way in which the system is supposed to work.  Wal-Mart needs to keep its prices low to remain the leader in the sector, so they push suppliers to keep prices low.

Similar arguments have been made about Home Depot, in the past.  But, here again, Home Depot must now compete with Lowe's and, to a lesser extent, Ace Hardware.  (Ace has smaller stores, so you pay a premium for the company not taking advantage of economies of scale.  But you also pay that premium for convenience, since the stores are often closer to people's homes.  CVS and Wal-Mart would probably be a decent comparison.)  Home Depot is notorious for beating up on suppliers, and yet the suppliers stay and we enjoy lower prices for wood (which is critical in my state during hurricane season, as anyone, who watches the news, knows).

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 01:52:28 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I strongly disagree.  The labor practices may be legal, but that doesn't make them fair.  In fact, the processes by which the regulations were changed were unfair also.

Just because Wal-mart isn't the only one doing it and the change has to go beyond them, doesn't mean we shouldn't criticize them for it.  We must call out the companies who indulge in this to highlight the real-world consequences of our current system.

Wal-mart's business practices are unfair -- they're just not unique.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 02:16:00 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I completely agree that we should call out companies for their practices, when we, as a group, deem them unfair.  Similarly, you should call them out, as you see fit, as should I, as I do -- that being in individual circumstances.  But the term, "unfair," is subjective.  What you consider unfair, I may not.  How do we measure "fairness"?  I submit to you that an objective analysis of what is and is not "fair" is nearly, if not firmly, impossible.

The process by which regulations are changed is determined by a democratically-elected state government and the administrative agencies it oversees.  I'm completely in agreement with you, in that the state and local governments should not have offered tax breaks and subsidies to companies.  But they chose to do so, and they can be voted out, if the people are sufficiently angered by it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 02:27:35 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Well, I just don't see people getting angered by it enough to do anything if no one's calling it out and people can't see what the problem is.  You have to describe a problem before you can fix it.  Elected officials represent our views -- they won't do anything for us if we don't tell them what our views are.

When they're mulling over whether to give tax breaks -- someone's gotta say it's unfair.  Wal-mart isn't.  They're saying it's unfair to have to pay for healthcare or pay to build a road to their store or whatever.  They're presenting their side.  Our job isn't to make excuses for them that that's just the climate and conditions we're in right now.  Our job is to speak up for ourselves and other people and pressure our representatives to work in our interests, not for corporate interests.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes

by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 02:39:40 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Well, I just don't see people getting angered by it enough to do anything if no one's calling it out and people can't see what the problem is.  You have to describe a problem before you can fix it.  Elected officials represent our views -- they won't do anything for us if we don't tell them what our views are.

And so the answer is to tell people about what is going on.  If they see this, and care enough about it, they will act.  Part of the reason Kerry lost the election was his failure to properly explain what has been happening in the economy -- e.g., how Bush's tax policies have hurt workers.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 03:18:30 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
According to you, what is going on is that Walmart is providing a public service by giving people crap jobs as an alternative to unemployment. Sorry, I just don't get your point.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 03:23:37 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
No.  I'm saying Wal-Mart is moving into a market where it believes it can make money.  It has nothing to do with public service and everything to do with bringing in money.  There are potential consumers, so it assumes demand is present.  There is a labor surplus, so supply is present at lower wages.  I think you're engaging with the issues of what should be, while I'm simply trying to explain what is and why it is.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 03:57:59 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
giving people crap jobs as an alternative to unemployment

What do you base this opinion that Walmart gives people crap jobs on?  It's the employees that decide if it's a good job or not.  Have you talked to a lot of Walmart employees, and thus derived this opinion?  Do you have some unbiased survey of Walmart employees that substantiates this?  What is this based upon?

by wchurchill on Wed Jan 25th, 2006 at 07:25:37 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Right.  So we tell people that Wal-mart's business practices are unfair, just like we should say that Bush's tax cuts hurt.  That's what I've been saying.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 03:24:30 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Bush' tax cuts were supposed to be good for small buissinesses, right? Where are those small buissinesses, and where are the jobs they offer?
by das monde on Thu Jan 26th, 2006 at 12:50:14 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
There may not be any others jobs left, and so the worker will make his/her decision.
Please expand on this.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 02:16:05 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Sure.  What I'm saying is that employment, so long as you are not forced into a job via some form, state or otherwise, of coercion (as in the case of a Soviet labor camp or something to that effect), is decided in negotiation between two parties: Labor (or the individual worker) and management (or the individual employer).  If labor does not wish to accept the terms of the employment, workers will not accept the position.  If management does not wish to accept the terms, it will not offer the position.

In the case of some small towns, few jobs exist to take, now that manufacturing plants have closed and the old jobs have been moved overseas.  Workers can take positions at (say) Wal-Mart, to continue with the example, if they're willing to accept low wages and a lack of decent benefits.  They are, however, not forced to do so.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 02:36:41 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
By that definition, only slavery is a problem and everything else is merely a choice.

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 02:41:19 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
That's called the Chicago School of Economics.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 02:49:10 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
No, the Chicago School maintains in its models that involuntary unemployment is logically impossible, which, as anyone who lived through the depression can tell you, is bullshit.  What separates the two is that, during the depression, investment had collapsed and companies were not willing to hire.  Involuntary unemployment occurs in this sort of scenario, as it does, to a lesser extent, during recessions.  It's the difference between there being no job vacancies and there being low-paying vacancies that some workers are not willing to take.  It's a distinction that, I think, must be made.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 02:59:35 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
But then if Walmart decides to leave, what? This Flint, Michigan but starting from a lower point?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 03:01:46 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
If Wal-Mart leaves, it will mean more unemployment and, at best, even lower wages.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 03:15:23 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
But that is not very different from mining company towns or Flint, Michigan. Specialization of the local economy leading to inability to weather changes in the conditions.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 04:54:36 PM EST
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Re: Is Walmart a Monopoly? (none / 0)
What!?  This is bordering on outlandish.  I took econ courses at the U of C.  What are you talking about on Izzy's slavery comment is the U of C economics thinking?
by wchurchill on Wed Jan 25th, 2006 at 07:30:28 PM EST
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Re: Is Walmart a Monopoly? (none / 0)
What is the alternative to a crappy job in a small town with few jobs? That's the key bit you keep leaving out.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 02:48:41 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I'm not keeping it out.  It's still voluntary.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 02:55:54 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
You are not describing the alternative, which is unemployment. You sound like those economists who claim that unemployment results from a rational calculation of utility maximization between crappy job and no job and so it's always the fault of the unemployed person.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Jan 25th, 2006 at 02:58:58 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
No one seriously believes that actors in the economy sit down and calculate their maximized utility functions.  That's just a way for economists to convey characteristics of a consumer in a model -- her appetite for risk, her preferences, etc.  It's a way of saying, "Person X like Starbucks better than Maxwell House and, given the choice and price level, she'll consumer y units of each."

The alternative may well be unemployment.  You're, of course, right.  But it's still the choices of situations similar to that -- obviously we would all prefer it to be a choice between two jobs -- that determines any number of other things.  The worker is not forced into the job by some sort of strong-arming.  He's taking the job as the alternative to unemployment.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 03:14:02 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
so it's not strong-arming if the force being applied is economic, i.e. homelessness, hunger, lack of medical care -- rather than direct threat of GBH as in a baseball bat to the kneecaps?

I tend to suspect this is the thinking of a person who has never been homeless or hungry, or put their kids to bed hungry :-)  choices are exercised in a context.  Wal*Mart and similar large combines have the power to shape and control the context within which people make their choices, narrowing the field and presenting enough large sticks that no carrot is really necessary.  how can such choices be called "free"?  they are no more free than "the lady or the tiger," and the odds are worse.

a strong distinction should be made between choices seeking to find the least of many evils, and choices where the chooser exercises the option to reach for a gest among several goods.  the latter is what I would call a truly "free choice" -- the choice of a gifted child of affluent parents between several excellent colleges, for example, seeking to select the one best suited to a solid education and good career prospects.

the "choice" of the resident of a gutted small town to scrape by on welfare and charity, or to take a crap job from a paternalistic, abusive, cheapskate, tax-dodging employer like Wal*Mart, does not strike me as "free".  nor is the economic history of these towns a textbook example of rational actors maximising utility.  corruption, violence (force and fraud, the nemesis of libertarians), chicanery, undue influence, nepotism, enclosure, loan sharking, price fixing, all have engineered the demise of the peasantry and the yeoman farmer.  to some extent gullible rural populations swallowed carefully prepared poison bait and participated with initial enthusiasm in their own execution, but over the last 150 years many resisted and found resistance futile in the face of concentrated capital.

according to Drew's pseudo-darwinistic model of commerce as expressed here, it seems to be simply natural and right that the clever and unscrupulous should amass wealth and use the gravity field of that dense wealth to amass yet more without any effort, leaving it to their children and grandchildren, snowballing over the decades, until we re-create feudal baronialism in all its glory.  and this is the situation that ideas like participatory democracy, land reform, Jubilee and other Levelling impulses were invented to correct:  the luxury of the few and the misery of the many.

if this were a peaceful and contented state for humans to live in, there would never have been any revolutions :-)  we don't meekly accept feudalism forever.  seems to me what Drew is arguing for is a lack of the kind of preventive regulatory intervention (modest Levelling of the kind that even the wealthy admitted was wise in the time of FDR) that reduces the probability of violent revolution.  I would prefer a degree of tinkering that flattened out the cycle of concentration and dissipation of wealth, rather than an episodic crash-n-burn cycle of violent extrema.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Jan 25th, 2006 at 04:44:40 PM EST
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I tend to suspect this is the thinking of a person who has never been homeless or hungry, or put their kids to bed hungry :-)

I never claimed I had ever gone hungry or been homeless, or that I had ever put my children to be without food.  (I don't even have children.)  Instead of actually discussing the topic, you chose circumstantial ad hominem.

Surely you're not equating economic pressures with a thug breaking someone's knees with a baseball bat.  The distinctions you're drawing on choices is not one of freedom vs. a lack of freedom.  Choosing between excellent colleges is a nice choice.  Choosing between welfare and Wal-Mart is not.  Both are free choices.

I'm not sure how my views are "pseudo-darwinistic" (whatever that is).  Don't you mean socially-darwinistic?  (I'm not that, either, as plenty of my comments will demonstrate.)  And where did you get this idea -- that I support the wealthy amassing more and more wealth at the expense of the many?  That's one hell of a straw man.  You point on my views of regulatory intervention is flawed, to put it charitably.  My point was that the kind of regulation that is often discussed would be useless, at best, and counterproductive, at worst.

In any event, perhaps you could read my comments properly and discuss the topic, instead of trying to discredit me (by attacking me) with logical fallacies.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 06:06:09 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
Surely you're not equating economic pressures with a thug breaking someone's knees with a baseball bat.  The distinctions you're drawing on choices is not one of freedom vs. a lack of freedom.

Not equating with, but certainly comparing with.  No two threats can be precisely equated.  A baseball bat is less imminently terrifying a threat than a gun to the head.  A fist in the face is somewhat less terrifying than a baseball bat.  Being threatened with a beating is not so bad as being threatened with the imminent execution of your entire extended family.  Watching your children go to bed hungry is somewhat less awful than watching your children beaten or raped.  Going hungry is less awful than being napalmed.  in any case where a more awful threat can be imagined, should we claim that the lesser threat doesn't constitute real coercion?

But unless there is a viable alternative to surrendering control of your life to the wealthy, i.e. being wage labour on any terms the wealthy care to set, then wage labour is not a "free" choice.  Going without basics like food, clothing, housing is not a viable or "equal" choice;  it is a threat, dating back to the enclosure of land and the control over peasants by hereditary landowning classes.  There are two reasons why the peasant must not hunt in the lord's woods;  one is that the lord wants to preserve the game for his own sporting purposes, but the other, more important one is that the peasant must remain dependent on the lord's largesse and favour for survival, to keep him properly subservient and obedient.  For the peasant to be able to feed himself and family by independent effort, without any noble's grace and favour, undermines the system of force and fraud that enforces unfree choices.

I don't consider it ad hominem to mention the obvious... that privilege -- yours, mine, anyone's -- can lead us to minimise in our minds the fear and coercion experienced by people who do not have our resources or armour against arbitrary power.  There is nothing inherently wrong with never having gone hungry -- would that no one ever did!  But as with age, disability, racism or any other burden, the fears and the behaviour-modifying potential of unemployment and poverty are harder to assess if one has never experienced them.  It is easy to tell other people how "free" their choices are when they are choices that I myself have never had to make, nor am likely to.

Or, to reverse the sense of what I just said, a dogmatic insistence on "choice" in unfree situations enables us to go on minimising and denying the degree of coercion and unfreedom experienced by those who actually have to live in those situations.  I can't remember whether it was Sartre or Camus who said that even on the way to the gallows we have the freedom to decide how we will approach the gibbet;  but that should not, imho, make us dismiss the experience of being hanged as a minor inconvenience.

Why would we draw an arbitrary line and say that one form of coercion (muscle or arms) creates bona fide unfreedom in the coerced, whereas another form of coercion using money (backed by muscle and arms in the end anyway) is not really coercion at all, and leaves its victims in a state of freedom?  I don't see any great distinction between money and muscle, when it comes to the workings of force and fraud in the real world.  In fact muscle could conceivably be seen as a more legitimate form of power than money -- since most of the greatest concentrations of money are unearned and inherited, the result of other people's effort, whereas to be a muscleman you at least have to exercise :-)

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Jan 25th, 2006 at 07:48:29 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
In any case where a more awful threat can be imagined, should we claim that the lesser threat doesn't constitute real coercion?

That's just absurd.  You can try to compare economic pressure vs. threats of physical attack as much as you'd like, but the threat of being attacked is not comparable to choosing between a shitty job and welfare.  Should we prosecute Wal-Mart for refusing to pay a higher wage when employees have few, if any, other job choices?  I don't think so.  But if Wal-Mart executives hired thugs to force you to agree to take a position at the store, the executives would, without question, be prosecuted.  It's not a reasonable comparison.

The situation is, in no way, like that of the hereditary landowners and peasants, either.  You, unfortunately, seem to be looking at Wal-Mart as a Marxian fantasy of the poor being somehow enslaved by the wealthy because of capitalism -- as though the entire system were simply based on a game for the "elites," in which the rest of society goes nowhere.  This is simply foolish.

There are rarely, if ever, "equal" choices.  The choice is still a free one, and it is this sort of choice that helps to determine the wage level.

The wealthy only have the power to "set the terms" because of the surplus of labor, just as unions have, in the past, had the power to threaten companies like GM and Ford with walkouts.  Is this not, also, coercion?  When demand for labor contracts, as it does when the plants move out of town, the wage falls and fewer people are hired.  What you're seeing is what any basic model will predict.  It's not a matter of advocating social Darwinism, which I do not.  (Accuse me of it all you like.  I feel no obligation to defend myself against false accusations.)  At the international level, the addition of over two billion people to the labor market -- and that's only in China and India -- represents a massive expansion in labor supply and a new, lower market wage in some sectors, like manufacturing.  So, to answer a separate comment down the thread, it is not necessary to connect economic thought with ideology.  There is some (admittedly far-from-perfect) science to the subject.

You have engaged in circumstantial ad hominem.  You're essentially saying, "Drew doesn't understand what is happening to the lives of working Americans, because he's a member of the elite!"  Well, I've got news for you: I'm willing to bet that you earn at least two or three times more than I have ever earned.  I've worked for several years in retail, doing heavy lifting and stocking, and often for twelve and (on a few occasions) twenty-four hours at a time.

And at wages lower than those offered at Wal-Mart, with no benefits.  Now I don't claim to have endured a difficult life thus far.  In fact, I won't hesitate to admit that I've had it pretty easy.  But don't attempt to cast aside my claims based solely on what you think my background includes, because you don't know my background.

That's how people debate when they have nothing constructive to say in response to an opponent's point: They abandon serious thought and engage in plays to emotion, hoping their opponents will be too gutless to fire back with opinions that are likely to be unpopular.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jan 26th, 2006 at 05:12:00 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
When demand for labor contracts, as it does when the plants move out of town, the wage falls and fewer people are hired.

and these events "just happen," like the weather, without any will or planning or policy decisions made by the elite for their own benefit?  the plants, like browsing brontosaurs, just happen to wander out of town on their own, without the ownership and managerial class making any decisions which benefit their own narrow interests and injure the interests of less wealthy people?

does the relative 30-year fall in the US of average income for the average working person, compared to the enormous rise in the average income for planning and ownership elites, signify absolutely no will, planning, or intention on the part of said elites to rig the economic game in their own favour?

the greatest ideological triumph of what we currently call "economics" is the pretence that a system  designed by and run for the benefit of a small elite is somehow a natural formation, like a crystal or an electromagnetic field, and as morally neutral.  to my ear this is as hollow and self-evidently propagandistic as the earlier rationale that the feudal order was ordained by God in heaven and reflected accurately the divine order, or that it's silly to pass laws against rape because "it's human nature, boys will be boys".  things are how they are (say the winners) because that is just how things are.

a surplus of labour is created by conscious decision making, just as wars are fought by conscious decision making.  those decisions are made by elites who do not fight and die in the wars, or risk any personal loss by reckless economic mismanagement.  the big lie of the dogma (not, imho, the "science") of economics is to render this conscious human decision-making, the exercise of elite power and planning invisible, to pretend that these carefully engineered systems "just happen" and must be accepted as we would accept gravity or the laws of thermo.  it's a brilliant ideological hat trick -- as beautiful in its way as the Divine Right of Kings and more clever, because instead of teaching us to worship the ass who sits in the throne it teaches us to ignore the man behind the curtain.

I suggest Debunking Economics by Keen, which confirms my long-held suspicion that the math behind current economic dogma is shoddy as Ptolemaic planetary mechanics.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Jan 26th, 2006 at 05:37:02 PM EST
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Re: Is Walmart a Monopoly? (none / 1)
Again, the Marxian babbling about some grand conspiracy of the "elite".  Of course the closing of plants does not occur randomly, as in the way the weather changes.  Wal-Mart closes and opens stores to make, and increase, profit.  Its job is to maximize the value for shareholders, which requires it to maximize benefits to consumers.  What else is it supposed to do?  Keep the store open and lose money when the demand is not there?  You seem to believe -- and correct me if I'm wrong -- that Wal-Mart has some sort of obligation to these towns.  It's obligated to follow the law, or face punishment.  That's it.  This is why I said companies should be viewed as machines.  Charities do charity work.  Companies do business.

The "elites" do not have the power to "rig" the economy.  Who rigged the economy to the extent that you were able to buy a computer with high speed internet access?  Who rigged the economy to give you the choice of a Dell, an Apple, a Compaq, a Sony, or an HP?  Who rigged the economy to give you choice of Ford, GM, Honda, Toyota, or one of the other brands of cars?  Who rigged the economy to give you the choice of untold numbers of brands of beer?  Who rigged the economy to give you lower prices at Wal-Mart, instead of the overpriced, equally-worthless garbage at Sears?  Did the "elite" at Yahoo! "rig" the economy to give you Google?

No.  You have choices and lower prices because of competition and innovation among "elites" and "non-elites".  You appear to be so wrapped up in 19th-Century fairy tales about the Evil Capitalist SystemTM that you've become completely ignorant of what is really going on, and incapable of thinking seriously about it, as adults are supposed to.  The system works the way it works because of the need of the firm to please consumers and investors -- not out of some desire to rape the working class.

Keen claims economic theory is not verified.  Really?  The Volcker Contraction that began in 1979 spoke fairly clearly in favor of the Keynesian and Monetarist explanations of what would happen when the money supply fell.  When WWII began, and massive public spending programs took off as the US began its war economy, what happened?  The US reached full employment and, when the war ended, the US and Europe went into a period of incredibly strong growth.  It worked roughly as Keynes said it would.  Unfortunately, FDR was not able to spend on that level until war preparations began on a massive scale.

Worst of all, Keen judges economics against perfection, a horrible academic sin and a near-sure sign of intellectual dishonesty, and that's only in the first few pages.  This is the same ridiculous style of argument engaged in by communists: "Haha, see?  The market doesn't, like, work perfectly, man, so we, like, need a revolution or something."  And, yet, to continue with my half-joking, hypothetical communist quote, they completely ignore life in countries where capitalism is not the economic system.

Or, as the Wizard put it, "Pay no attention to that man behind the curtain."

He comments on the Russian transition, yet he ignores the fact that there were two major sides to the debate over how the transition should take place.  Some, like Joseph Stiglitz, advocated gradual change.  Others, including a few of my old professors and the IMF, advocated rapid change, or "shock therapy".  No one was sure of the correct answer -- hence the use of the term, theory.  But, to fools like Keen, it's all about the Shock Therapists, for they must be the true representatives of economic thought.  Forget about Russia's default.  That had nothing to do with it, right?

And never mind the silly detail of those in favor of rapid transition being a group of people for whom the best economists have never held respect.  No, no!  Steve Keen, Detective Dipshit, is off to the races, seeking to set a record for the number of straw men set up in one book!  Someone had better get the good folks at Guinness World Records on the phone.

Please.

Note, by the way, that every name Keen mentions, from Stiglitz to Samuelson, with some sense of respect is the name of a follower of Keynes.  And, here, we see why the foundation for Keen's book is crumbling, already.  He is separating them, because he wants to concentrate on Classicalists and Neoclassicalists.  Implicitly, he then assures the reader that the theories of the Classicalists are the "true" economic theories, completely ignoring the fact that Keynesianism remaining the dominant school of thought.  (Macroeconomics was originally named Keynesian economics, and Keynes is known in history books as the Father of Macroeconomics.)  It allows him to make generalizations about the field, using theories that do not actually represent the field, in general.  He can then claim that economists (say) believe all markets are perfectly competitive, because that's how the Classicalists' models are built.  The problem with this approach is that modern (or "New") Keynesian models are built on the assumption of imperfect competition, and even monopoly, in some cases.

It doesn't sound like a book that is worth $27.

If you want to read serious thought on the subject, read Keynes's The Economic Consequences of the Peace and A Tract on Monetary Reform.  Also, Krugman's Peddling Prosperity and The Return of Depression Economics are good choices.  If you like those, read the counterpoints in Milton Friedman's Capitalism & Freedom.  Stop reading books that simply pander to your settled prejudices.  That's a game for cowards who are afraid of what they may find in writings that offer a different view.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jan 26th, 2006 at 10:52:12 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Drew: You continually ignore the issues of Walmart breaking the law.
Here are just a few examples:
http://money.cnn.com/2005/03/18/news/fortune500/wal_mart_settlement/

http://writ.news.findlaw.com/sebok/20040809.html

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/12/23/MNG6DGCJ9L1.DTL

http://www.commondreams.org/headlines05/1223-07.htm

These are all settled claims with the exception of the sex discrimination suit which is pending. It is also the largest class action suit labor suit every undertaken (1.5 million).

What you don't want to understand, or choose to ignore because it doesn't fit your libertarian beliefs, is that Walmart has a deliberate policy of violating labor laws. They figure they will either get away with it, or the fines will be less than the savings.

Before you continue to promote your theoretical arguments about labor and capital, do a little background reading. If you persist in your fanciful interpretations of corporate behavior you run the risk of not being taken seriously.

When a multi-billion dollar company negotiates with a small town with an annual budget of a few million the town usually doesn't have the ability to defend their position. Walmart can afford to spend more on lawyers to win concessions such as zoning changes than the entire budget of the town.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Wed Jan 25th, 2006 at 03:45:16 PM EST
Re: Is Walmart a Monopoly? (none / 0)
With all due respect, Robert, it is you who has failed to listen to me.  And, honestly, as I mentioned in Agnes's (or Izzy's?) diary on fashion-obsessed consumers, I've never been too concerned with having my views agreed with by others.  (That's why they're my views and not those of someone else.  It would be a tad boring if we all agreed on everything.)  Agree or disagree where you like.  Whether people take me seriously is their own business.  I take it that you do not, and that's perfectly fine with me.

As I said above, Wal-Mart will only get away with what the government allows it to get away with.  You've failed to recognize the obvious point -- that Wal-Mart has gone to court and lost in these cases (with the exception of the pending sexual discrimination case).  That's how the system is supposed to work.  If you allow the company -- any company -- to break the rules, without prosecution, you can't be surprised when it breaks the rules.  When you allow people to smoke dope, you can't be surprised when they become less hung-up about smoking dope.  I haven't ignored this, in any way.  If the company breaks the rules, it should be taken to court to have the plaintiff's claims addressed.

Yes, Wal-Mart can spend more on lawyers.  But, at the end of the day, voters and consumers have the power, because the government sets the rules, and Wal-Mart can only sell what consumers will buy.

You can call it "libertarian" or "liberal" or "conservative" or "communist" or "fascist" -- whatever you like -- but the views I'm expressing are none of the above.  They're my views related to economic theory and how I think that theory relates to the real world.  It has nothing to do with politics, and to cast what I've said aside as ideologically-based is to avoid the real discussion.  But that is your right.  We can debate ideology, if you'd like, but I'm not going to bring ideological arguments into a discussion of economics.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 04:28:49 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
The disingenuity or naivete of imagining that economics can somehow be separated from ideology, is perhaps the most ideological of all possible statements...

The difference between theory and practise in practise ...
by DeAnander (de_at_daclarke_dot_org) on Wed Jan 25th, 2006 at 04:46:34 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
btw, that was Agnes's thread, but it was me you were having the discussion with.  In fact, I don't think you ever did respond to my last brilliant and stunningly-definitive point. ;-)

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 05:14:29 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I don't think I did, either.  Got a bit sidetracked.  Which point was it?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Jan 25th, 2006 at 05:21:56 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 1)
Great debate.
by MarekNYC on Wed Jan 25th, 2006 at 04:23:49 PM EST
Re: Is Walmart a Monopoly? (none / 0)
Yes, this is a very interesting discussion.

It is extremely difficult to separate the issues of monopoly, globalization, business ethics, small town economic problems, and worker's rights, in the context of WalMart. On one hand there is a visceral hatred of WalMart because it is mostly utilized by low class fat rednecks and is run by a bunch of unethical Arkansas monopolists, and on the other hand there's a fundamental belief among many Americans that capitalistic business operating under reasonable government regulation is the best way to run a country.

The biggest problem I have with the discussion is that in my personal very limited experience, I have not see WalMart ruin small businesses. On the contrary, the traffic pulled in by these big box stores (Home Depot is another example) seems to result in a surrounding halo of small specialist shops--restaurants, muffler repair, furniture, pornography, music, etc. And it is certainly true that there are people working there who would have a hard time finding a job elsewhere.

That's what I've seen, at least, but it's hard to sort it all out.

by asdf on Wed Jan 25th, 2006 at 11:00:37 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
According to this PBS link, as of May 2000:

Wal-Mart stores are often the size of four or five football fields - huge in scale compared to many of the small communities that they neighbor. Criticized for deserting stores that under-perform, Wal-Mart has left behind more than 25 million square feet of unoccupied space across the country

And they also have this quote:

People are surprised that Wal-Mart would even want to locate a store at Ashland, with another one 10 miles away. But that's part of the Wal-Mart saturation strategy. They place their stores so close together that they become their own competition. Once everybody else is wiped out, then they're free to thin out their stores. Wal-Mart has 390 empty stores on the market today. This is a company that has changed stores as casually as you and I change shoes.


Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Wed Jan 25th, 2006 at 11:11:06 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Yes, that is apparently one of their strategies. One way to look at it is that they are subsidizing the construction of new buildings for Home Depot!

But that's not the same as putting small businesses out of business...

"Critics of Wal-Mart and some academic studies, particularly out of the University of Iowa, claim that Wal-Mart displaces locally-owned stores resulting in the reduction of locally-owned corporate assets and real estate, and the destruction or displacement of higher paying jobs. Other studies, including several recently from the University of Missouri, have claimed that Wal-Mart stores either do not have negative impacts or have been found to positively impact a community by effecting lower prices, increased employment, and increased establishment counts."
http://en.wikipedia.org/wiki/Wal-Mart

Obviously this topic is so controversial that one may question the accuracy of the Wikipedia article...

by asdf on Wed Jan 25th, 2006 at 11:26:39 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
That would be the same U of Missouri of which Sam Walton is the most illustrious and famous graduate?

"In September 1992, Wal-Mart founder Sam Walton contributed $3 million in scholarships to the. University of Missouri-Columbia."  (www.centerforethics.org/Walmart.PDF)

And if you think that large friendly donations to educational institutions couldn't possibly result in nice warm fuzzy publications about the donor's family and interests, then you ain't been around academia (in the US anyway) for long :-)

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Jan 26th, 2006 at 02:07:36 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
The U of Missouri studies I've found were done by Prof. Emek Basker -- one of them for a Wal-mart conference.  Even these results were mixed.  From Business Week -- Some Uncomfortable Findings For Wal-mart

Maybe we can eventually make language a complete impediment to understanding. -Hobbes
by Izzy (izzy at eurotrib dot com) on Thu Jan 26th, 2006 at 02:42:29 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
thanks for the interrsting debate. I am with rdf (I agree that the concept of monopsony is fundamental today) and DeAnander/Izzy on this one.

I'd like to also link Migeru's comments about the lack of resilience to our earlier discussions on hysteresis and irreversible effects (i.e. - after WalMart has "stripmined" a city  and leaves, the old stores do not re-open - there is a net, permanent effect)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jan 25th, 2006 at 06:37:17 PM EST
Re: Is Walmart a Monopoly? (none / 0)
just briefly Jerome I would like to connect this to complexity and diversity as essential traits of healthy biotic systems;  the loss of complexity is an entropic process i.e. is irreversible in that the status quo ante can never be restored.  over time a new complex order may evolve to fill the ravaged niche, but the original functioning system cannot be reproduced.  a renewal or renaissance of small town American culture may happen, but the new version will not replicate what was lost.  in some ways this might not be such a terible thing, as some of what was lost was not so wonderful, but there is also the issue of the enormous difficulty of recovering from the stripmined high-entropy state.

loss of complexity (monoculture, reduction of species count per acre) reduces overall biotic productivity and simultaneously reduces resistance and resilience in face of pests, adverse weather, etc.  this seems to be true whether the ecosystem is a reef, a farm, a town, a city, a compute cluster, a power grid, or an economy.  

monoculture equals increasing risk of single point catastrophic failure with poor/costly/slow recovery prospects.

the lesson I derive from this is that Wal*Mart is inherently a bad thing, and so are company towns.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Wed Jan 25th, 2006 at 08:32:25 PM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
I will mention this Gaia theory again. It basically says that beside evolution of organisms there has been evolution of the Gaia "superorganism". The Gaia takes care of healthy environment. Does Gaia also have methods to deal with occasional parasites?

Gaia theory is criticized along the lines that individual organisms or species cannot cooperate since "altruism" is not beneficial to them; organisms waste resourses only for themselves. But if the uncompromisingly selfish behaviour would be optimal, then all species would behave like locust:

Very few species have the luxury of eating up everything they come accross. Most species probably have instinctive or genetic stops not to destroy their own environment. After all, surviving throughout long millenia means not only overcoming stuggle to establish your own niche, but also surviving your own success. The Earth had seen many species that "discovered" unbounded success, and perhaps many of them learned to control their vitality so to keep livable environment.

by das monde on Thu Jan 26th, 2006 at 02:47:39 AM EST
[ Parent ]
Re: Is Walmart a Monopoly? (none / 0)
Right on, De Anander and dasMonde.

This morning I woke up with an idea for a diary Against Efficiency. We'll see whether it happens.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Jan 26th, 2006 at 06:16:57 AM EST
[ Parent ]
Against Efficiency (none / 1)
One argument that intrigued me a while ago against the "reform" of the French State to make it more effective and reactive was that the role of the State was also to introduce slowness, and ponderation into some decisions, and thus inefficiency was not necessarily a bad thing.

There is also a series of short novels by Frank Herbert where the hero comes from the Sabotage Bureau (or something) which was created to fight the super efficient bureaucracy made possible by a special kind a aliens, by sabotaging it and making it work slower. It sounds strange, but there is, as always with Herbert, some very interesting background and thought involved.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Jan 26th, 2006 at 06:49:58 PM EST
[ Parent ]
Monoculture (none / 1)
I remember being struck in a sci-fi novel by Nancy Kress where she described a special GM grass that was the most effective biosystem to transform nutrients into organic matter (itself), and was thus an incredibly energetic crop. The problem was of course that this grass, if left alone, would have taken over the whole planet (except a few large trees wit hvery deep roots) and killed every single other crop.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Jan 26th, 2006 at 06:44:48 PM EST
[ Parent ]
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