Achtung Wal-Mart!

Freedom must be a difficult concept to comprehend for those people who support the call to boycott Wal-Mart. Hating Wal-Mart has become a new sport. A leading voice in the "I hate Wal-Mart" campaign is an old socialist, Senator Edward M. Kennedy (D-Mass), who came up with the 10 Commandments of Leadership that Wal-Mart needs to adopt by making all things equal for their employees. He joins the loathsome endeavor by filmmaker Robert Greenwald whose film "Wal-Mart: The High Cost of Low Price" is warmly received by the faux proletariat of ill ilk. His low-budget "documentary" is filled with his political rants against the giant retailer.

The inflamed hatred against Wal-Mart is attracting all the usual left-wing suspects, from women’s rights activists, environmentalists, as well as the academia elite. All groups are eager to join the madness. With the support of the political Left, the anti-Wal-Mart activists want to prevent the expansion of the retailer into their communities. Protesters want to enforce internal policy changes as well as interfere with the retailer’s merchandising.

The charges made against Wal-Mart by the "I know better than thou" crowd, include paying low wages to its employees, the company’s steadfast opposition to forming labor unions, environmental issues, not paying overtime and not stocking emergency contraception for women (the morning after pill) in their pharmacies and lack of providing adequate health insurance for its employees. One of the biggest complaints is that Wal-Mart destroys small businesses. The list goes on, and we can probably include that Wal-Mart is responsible that there is no world peace on earth as well as global warming and every hurricane from Andrew to Gamma.

The Bentonville, Arkansas-based retailer had a phenomenal growth over the past 20 years that currently generates annual sales of $250 billion. The fast expansion in the US that began during the mid-1980’s has now reached 3,700 US stores. When Wal-Mart began entering the urban markets it increased its sales area from a modest 40,000 square feet to over 100,000 square feet of space. During the mid-1990’s the company expanded abroad with 1,500 stores worldwide. It has locations in South America, Canada and in 1996 entered China. In 1998 Wal-Mart began opening stores in Germany and currently employs over 1.6 million associates worldwide. For the past 43 years the discount store chain provided low-priced goods to its customers, which by 2005 includes 138 million customers per week.

The company’s sheer size invites unwelcome attention, usually from those interested in a parasitic source of income. The meddling of busybodies in Wal-Mart’s private affairs has specifically become popular in blue states like Maryland, where unions and competitors are urging the state legislator to pass a bill that requires companies with over 10,000 employees to provide health insurance benefits. Anyone who understands a little bit about retail knows that there is a high turnover of employees. The majority of people employed in retail stores are part-time employees, such as students and teenagers who are often covered by their parents. Part-time workers require no health insurance. Many are married looking for a second income that already have insurance through their spouses, or are hired as seasonal help. The majority of full-time employees receive medical and dental benefits, with profit sharing and 401(k) plans as well as stock options. The company also offers life and disability insurances to its associates. Benefits offered by employers are, after all, a privilege in the first place, and not an entitlement. The employer, as the owner of his own business, has the right to see what’s best for his business. It is the private decision of the employer that determines how he wants to reward those who work for him.

California’s reliable proto-Marxist UC Berkley Labor Center wants to hold Wal-Mart responsible for $86 million a year in state aid. The research claims that Wal-Mart employees rely on food stamps, Medicare and subsidized housing in order to make a living. Should the Wal-Mart hater crowd in California succeed in forcing the company in raising its wages and providing more benefits to its employees, prices will raise to cover the extra cost.

The desire to up Wal-Mart’s cost-price structure completely ignores the fact that the majority of customers are lower income citizens. The higher cost will invariably be passed on to the customer. The retailer operates on a fixed and very low profit margin. A recent independent study completed by Global Insight found that Wal-Mart saved each American household on average $2,329 in 2004. The study also concluded that Wal-Mart also had a net positive economic impact in the form of a .9 percent increase in real wages and the creation of 210,000 jobs nationwide. The availability of goods and groceries at a low cost to poorer neighborhoods supplies an economic group that would otherwise not be able to afford the higher priced goods from Wal-Mart’s competitors.

While it is true that competition with and from Wal-Mart can result in similar but less efficient businesses closing their doors, it can save its average customers money that can be spent in other business and investments. The additional savings can be invested in retirement funds, a car payment or even an overdue vacation. Many towns had to reinvent on how to attract new business to replace those that closed.

East Texas is known for its many antique stores in its small towns. North Texas towns, such as Grapevine and Granbury, are popular for their specialized stores of arts and crafts. The empty buildings attracted new businesses like day spas, ice cream parlors, deli shops, pubs with live bands, and wine shops. It has attracted tourism from upscale clientele who like to settle in the formerly rural areas as urban metropolises spread out further and further. New restaurants have sprouted up as well as custom-made clothing stores. It requires creativity and ideas to attract a new and often wealthier customer base that supplies different kinds of goods and services not found at Wal-Mart.

The average savings of groceries can be 10 percent or more when comparing Wal-Mart’s cost to major grocery store chains. Many stores such as Kroger, Tom Thumb and Albertson’s require the customer to attain a card in order to receive the daily or weekly specials from their ads. If one does not have the card, the customer is out of luck and will have to pay the higher prices. Wal-Mart on the other hand, has no such gimmicks. The prices are available to all customers who will be able to benefit from their specials without the usage of their preferred customer card. Here the retail giant makes no privileged distinction toward its customers. Yet, Wal-Mart’s direct time- and often money-saving approach is the one being foolishly criticized.

Another factor that rubs socialists the wrong way is Wal-Mart management’s socially conservative leaning. It occasionally influences the type and marketing of the chain’s merchandise. It chooses not to sell sexually explicit magazines and books but maintains the rights to sell firearms. Both decisions can be seen as a moral issue. Wal-Mart pharmacies decided not to keep the morning after pill because of its low shelf life, which faces vociferous protest from the left-wing groups such as the Farmington State College student. They envision themselves entitled to having the product easily available. The protesters claim that the company harms women’s health. College students want to blow this issue into a woman’s issue that is entirely outside the responsibility of the company. More than likely a competitive pharmacy will carry the item in question.

This animosity comes from a long held and unfortunately popular belief that a business has no right in making its business decisions. According to their anti-business philosophy, private companies must conform to a "public interest" as defined by them. Surely the Wal-Mart protesters would only purchase items they decided to own without being coerced into making this decision. Yet, they ignore that free market is what truly defines this so-called private interest.

This is not to say that a business has no moral obligation. Any success of a business depends on its moral conduct not to steal and rob others of their property, not to murder for a profit nor to lie about its products. It shall not envy the profit of others, but achieve its success through honest competition. It has no other responsibilities and certainly has no "social responsibility" towards people whose own lifestyle can be considered morally corrupt. The company voluntarily gives $170 million a year to local communities and non-profit organizations.

This of course gets overlooked when self-anointed environmentalist like one Lindsay Robinson thinks that Wal-Mart destroys lush farmland that could provide sustenance for more people. Her claims are that it makes people more car-dependent and the drive to Wal-Mart raises the amount of greenhouse gases emitted and causing consumers to use more gas. By this logic, we would be back to using the sickle – no doubt, with the hammer attached – in no time. How does Robinson propose to feed 138 million people weekly?

Wal-Mart is a supplier who can feed and clothe the poor. The population growth in both urban and rural areas relies on an efficient supply line that brings the needed goods to the people at the best prices. In general, if people can afford a $900 flat-screen TV at Wal-Mart they can also afford a car and the required fuel bill. The majority of low-income families live better than a family did 100 years ago. These families possess items that were considered luxury items only 40 years ago. Does Lindsay Robinson propose to control all supplies and goods as done in the former USSR where people arrived at empty shelves after standing in line for several hours waiting? Population growth requires adequate supply of food to the people. The many choices to shop for goods at an affordable level have never been as available as it is today. Removing these choices from the consumer would create far more trouble for the urban population than Robinson’s concern of greenhouse emission.

The recent Kelo decision by the US Supreme Court to legalize the immoral behavior of removing privately owned property for bigger business has concerned many private citizens and small businesses. Wal-Mart has been known to be a willing partner with city officials in attaining some of their properties in that manner. Although some of the businesses only leased the property, city officials still offered Wal-Mart subsidies in favor of their business. Wal-Mart plays a part in this scheme but it is the cities themselves who play favoritism in their politics. Wal-Mart should closely examine their involvement, since freedom and wealth can only exist without the coercion of government action. Wal-Mart’s own future depends on exercising their freedom. As a private business, success largely depends on maintaining these values and morals.

A point that has not widely been discussed is the vendors and services that benefited and grew as Wal-Mart did business with them. Many services employed by Wal-Mart remained competitive and aggressive in their innovation of new technology. The company I work for has grown and moved abroad with Wal-Mart because of the service we offer to them. Not only did this growth create dedicated teams of roughly 600 of our own employees that service Wal-Mart exclusively, it also spurred on the development of our own technology and invention that was able to meet the growing needs of Wal-Mart. The newly developed technology kept us competitive in that we could generate even more business from other retailers with similar needs.

The accumulation of new capital gained through the association with Wal-Mart allows both small and larger businesses to upgrade their technology that can only improve business. That in turn only creates the demand to hire more employees creating new jobs. We currently employ over 40,000 people on three continents, because to a large part our growing success was jump started with Wal-Mart.

The hate campaign against Wal-Mart reflects the late Weimar Republic Nazi oratory when Hitler’s election slogans were directed against free economy in general and certain prosperous businesses – many of them Jewish owned – in particular. They were deemed "Non-German in their zeal for profit." Never mind that their reason for being profitable was in their success in catering to the German citizens themselves. Hitler’s dubious grasp, his promises of greater Germany despite the NSDAP's destructive economic planning do seem to resonate once again.

Today’s socialism still has contempt for those who produce for themselves and their target markets without paying at least a lip service to the "greater social good." It completely disregards the benefits and freedom the market has brought to a growing population that can meet the basic needs of all people. Culture and progress only come through private ownership and freedom of choice. Neither socialism nor its destructive legalism can produce what the moral power of a free market can do.

November 30, 2005

Sabine Barnhart [send her mail] moved to the US in 1980 and lives in Fort Worth, TX with her three children. For the past 15 years she has been working for an international service company.

Sabine Barnhart Archives

Back to LewRockwell.com Home Page