Wednesday, August 1, 2012

Walmart And The Creative Destruction of Capitalism

Bill,

Your post on consumers immediately brought Walmart to mind. Its an amazing experience to walk into one, with its bewildering variety and depth of goods.  The place simply has an unbelievable amount of stuff. I have little doubt that the company has played a major role in bringing that stuff to consumers at cheap prices. I occasionally buy my meds there, and I make sure that my clinic patients know about the Walmart $4 prescription list. That's a months worth of perfectly good generics for 4 bucks! Fantastic.

Walmart is also the nation's  largest employer, with nearly 4 times as many workers as its next nearest competitor. Along the way it has become the kind of bette noir for the left that makes you crazy. Browsing through Walmart salaries on the Internet I was impressed to see that managers can make a middle class living. Still, with an average salary of $9.85 an hour, it's hard to imagine that working there will serve as a vehicle for upward mobility. Our capitalist system has richly rewarded the Waltons for their energy, forsight and drive, as the six heirs to the Walton family fortune rank as the richest family in the world. Walmart shareholders also enjoyed a remarkable run through through the 90s, although the stock has been mostly been a disappointment since. Some part of the company's economic success (and its ability to subdue its competitors) might be attributable to its effective resistance to unionization. Other successes appears to be a simple matter of effective corruption.

My home town, (population 24,000), has one. It's out on the highway at the edge of town, on top of an old golf course. The town center, 3 miles south on an estuary at the edge of Buzzards Bay, is peaceful in its empty buildings and dense silence. The donut shop, men's haberdasher, barber, and pharmacy (no 4 buck prescriptions there) that I grew up with are all gone. Only the world famous Concordia Boat works remains along with the real estate offices. With the exception of late summer sunsets, almost everything that was once provided there can be now be had at Walmart.  Next door in New Bedford, the abandoned  storefronts line Acushnet Avenue for miles.

This is the creative destruction of capitalism at work yes? Winners and losers. Consumers and workers. Rich and poor. Lucky and unlucky.

When I think about whether, or how, I might I arrange this differently, the answer is not much, but maybe some. Capitalism at its best works because it acknowledges the elements of our nature that produce success: drive, competitiveness, desire, vanity, ambition. Socialism fails because, absurdly, it denies those elements, valuing only resentment. I don't want to wait on line to buy crummy shoes, and if I can buy the same shirt on Ebay for half the price of  Nordstroms  I'll take that deal every time. But I still think think there ought to be some sort of leavening of the harshness. And I can't let go of the notion that "millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same (1)."

Eli

(1) Barack Obama-State of the Union Address 2012

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