K, I'm going to have to address some of the things that came up earlier. Note I'm not defending Wal-Mart as a company; these are some more universal ideas, and they're all fallacious.
1) It drives other stores out of businesses with "low prices" on anything competing with them.
Just as any of their competitors would gladly drive out their own competition, if they had the chance.
Low prices are good. High prices are bad. If you need proof of that, try living off the land, by yourself, for a while. The highest imaginable price for goods is to spend 16 hours a day literally scratching in the dirt for enough food to survive. In a sense,
all human activity is directed toward lowering prices.
It is not the lowering of prices that is bad; it is the
means by which they do it. I'll get to that later.
2) Once stores are out of business, they jack up the prices
No they don't. That is a myth. They might want to, but the thing is, so would their competition. Because if they raise their prices, in comes the competition to get a piece of the high profits indicated by the high prices.
3) They force suppliers to cave to low prices for their goods, or they won't put them on their shelf.
So does every other store on the planet. Everyone wants the lowest price possible, all the time. The difference between Wal-Mart and other stores is that they have a privileged position that cannot be matched by their competition, and their ability to "force" suppliers is amplified accordingly.
4) Quality goods manufacturers can go out of business if they don't cave to Walmart's distribution, after all, Walmart is the only player in America anymore since they put other retailers out of business.
No they don't. You can go somewhere else and get better goods at a higher price if you want. In fact, I do it all the time.
The fallacy here, though it is well in the background, is the idea that "goods" are a homogeneous blob. They're not. It's not even fair to categorize them as "cheap goods" and "better goods", though that will do for now: poor people can more easily afford cheap goods. Those with better means can afford better goods. The demand for both is alive and well, and the needs of both classes are being met according to their ability to compensate the producers.
5)Walmart also favors cheap Chinese goods that are inferior, but transfers wealth to China.
And so, the lives of many Chinese people who would otherwise be forced to choose between starvation and prostitution are vastly improved. Hooray! I don't know about you, but my love for humanity is not contained by any set of borders.
Anyway, my point is not to ride to Wal-Mart's rescue, but to point out that people often see problems and then blame it on business, without looking deep enough to discover the root cause. Which, in this case (as in many others) is political privilege. Wal-Mart is not a shining example of the free market in action. It is a particularly well-disguised version of crony capitalism. "Well disguised", because it provides, at least on the surface, something which people desperately need: inexpensive goods. "Crony capitalism", because the corporation is so deeply entwined with the government that it cannot be properly viewed apart from it.
Wal-Mart uses the government to leverage its way onto the top of other companies through corporate welfare and by taking advantage of politically-imposed costs of doing business which they can absorb much more easily than smaller companies. That does not impugn free market competition in any way, because it has nothing to do with free market competition. Their low prices are not due alone to efficient manufacturing and economies of scale. They are subsidized, both directly and indirectly, by the state. That is, the government takes money from us, then pays them to keep their prices low. (That is perhaps an oversimplification of the process, but I believe it is accurate enough to make my point.) Therefore, Wal-Mart's low prices are illusory, because we pay twice for their goods: once in an obfuscated manner, through the government; and then again at the checkout line.
They also take advantage of the condition imposed on foreign peoples, particularly the Chinese,
by those peoples' governments, to ensure a source of cheap labor. Just as competition in business tends to lower the prices of goods, competition
for labor tends to
raise the price of labor (that is, wages). But in many third world countries, governments secure monopolies for large companies and prevent such competition from arising. This makes Walmart a pseudo-monopsony ("sole buyer") for labor, and thereby strips the workers of their ability to effectively demand higher wages. But again, the problem exists not because of some problem inherent in the market, but because of political power.
Wal-Mart is not a bad company because they make cheap goods at low prices. They are a bad company because they use political means to do so. I believe we would be much better off without companies such as Wal-Mart. But only because other companies, removed from political cronyism, could give us honestly what Wal-Mart
appears to give us, and in a far more equitable way.
I'm well aware of the beefs people have with Walmart. But the fact remains that they're burgeoning and successful all over the globe for a reason. And the fact remains that, for low-income families, Walmart HAS been a lifesaver, and will continue to be. You think you can do it better, go for it.
