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Saturday, January 27, 2007

Wal-Mart: Not a Monopoly

Over two years ago, I wrote the two rules of antitrust/competition policy:

  1. You must compete.
  2. You must not win.

It never ceases to amaze me that so many people mistakenly equate competitive success with monopoly. Rebekah relates yet another example and smacks it hard:

Buddy went off on a Chomsky-ite tangent and said, "To the extent that Wal-Mart is a monopoly it impedes the free market."

... Precisely how is Wal-Mart a monopoly, when, even in my relatively rural district — in flyover country — we have within just a half-mile of the Wal-Mart, a Target, a K-Mart, a Sears, a J.C. Penney, a farm-and-tractor supply chain, a home and garden center, two book stores, a video store, and at least two dozen small family-operated businesses, all marketing similar items to those at the eeeeevil monopoly, and they have all been doing well for at least the decade the Wal-Mart has been there? That's a funny-looking monopoly, in my eyes. Of course, if you are willing to use Chomsky's methods to redefine words to suit your immediate want, then, perhaps he has a point.

... The communities which have suffered are those which have not allowed for lower-priced merchandise for the working classes. If I earn a paycheck every week and have no place convenient at which to buy affordable clothes, shoes, toys for my kids, and so on, I'm going to look for a job closer to an affordable neighborhood.

Yup. These are precisely the people the elitist snobs of Stratford, Ontario, don't want living and shopping in their snotty, snooty town, which is proud (not sad) not to have a Wal-Mart.

Posted by EclectEcon on January 27, 2007 in Current Affairs | Permalink


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Of course you are right WalMart is not a monopoly
the Late Sam Walton never intended it to be a Monopoly he was too smart for that. The original idea for his mass merchandising and marketing came from Jewish Retailers in New York City. Ed Mirvish might have become the Sam Walton of Canada but he had other more enjoyable interests. But having said that I detest large retail stores no matter who they are in Canada, but am comfortable in New York and
London - There are three WalMarts in the tiny perfect little and dull City of Moncton NB and they are building two more. Only in Canada eh!

Posted by: Jack MacLeod | 2007-01-27 9:36:46 AM

The problem of socialists with Wal Mart has *nothing* to do with monopoly. Socialists are liars per default.

"Competition" is a cursing word for socialists, like "merit". Ask the employees of Canada Post if they despise the monopoly position of their employer; in fact, their union's primary goal was and is to keep competition away. The same is true in every area, where the government gave certain entities monopoly or quasy-monopoly: education, health care, liqueur store (and think of the wheat board, egg board, etc.).

The true problem with Wal Mart is, that it is not unionized; as such, it is a negative example for the socialists.

One can often hear (from the disappointed unionists), how bad an employer Wal Mart is. One does not hear the same from the employees.

I have not seen any comparison of wages between Wal Mart and Rona, Home Depot, etc. I am pretty sure Wal Mart pays less or offer less benefits, worse working conditions, whatever. However, my observation (based on over ten years, occasionally purchasing or looking for something), that their low prices are "well-balanced" with the lack of quality service in the store. Most employees don't know their products, they don't find anything, can't answer any questions; quite a few of them does not speak English enough to be asked.

I find all this ok, because it is part of the whole deal. One has to realize, that many of these people would not be employed in other stores. The turnover appears to be high, which indicates, that these inexperienced people get some skill in retail and then move to other, better jobs. If my observation is correct, then Wal Mart fulfulls an important role in the market.

Btw, is it surprizing, that the only Wal Mart store, which has become unionized, was in Quebec?

Posted by: Cato | 2007-01-27 11:16:45 AM

Know nothing about the day to day operations of WalMart or Rona or whatever, and don't care. But there is an important aspect of this topic which is important. We found when we submitted a formal complaint to the Federal Competition Bureau that
Federal Crown Agencies such as ACOA etc. are not subject to the provisions of the Competition Act
which I found appalling because these Federal "financial agencies" compete directly with the private sector, and are entirely driven by political patronage. No Company in the Region that I am aware of would hire an individual with the term ACOA as a place of employment in their CV.

Posted by: Jack Macleod | 2007-01-27 12:33:28 PM

Employees at WalMart should not have to be unionized if they don't want to. In fact, nobody should have to join a union if they don't want to. What else does freedom of association mean? BTW Jack, what's ACOA?

Posted by: Herman | 2007-01-27 1:04:28 PM

ACOA is the notorious Atlantic Canada Opportunities Agency which is a fifedom of Liberal and Acadian Patronage. It was initiated by PM Mulroney and now Senator Lowell Murray. The original idea had merit, and consisted of about 75 Bureaucrats all veterans
of "Regional Economic Expansion" a straightforward
agency to provide Federal Funds for Business. Now
ACOA has over one thousand employees, and control Municipal and Provincial Funding Programs which used to be the venue of Public Works and Government Services. MP Peter MacKay is the Harper Minister responsible for the Agency which would put Harper out of Business tomorrow if they could.

Posted by: Jack MacLeod | 2007-01-27 1:38:31 PM

Sounds like ACOA is an out of control patronage outfit. Why the hell should we be putting money into such an obvious black hole?
Senator Lowell Murray is involved? That should send a few people running.
It's tough sledding for The Government to appease all those in Quebec and Atlantic Canada who are always looking for special treatment and handouts.
McKay and Harper must feel they are obliged to continue on for the usual reasons.

Posted by: Liz J | 2007-01-27 2:35:55 PM

Of course - this is what makes Peter MacKay so vulnerable because he is playing the old Pork Barrel
game, millions given to a host of incredibly stupid Projects. More important, ACOA Bureaucrats along with some in DND Industry Canada and Public Works
are behind the Fortier Debacle last week, but Harper deftly resolved that problem. Conservative Think Tank Atlantic Institute For Market Studies has conducted devestating studies on ACOA. MacKay (ACOA)
has promised many millions to the nebulous Commonwealth Games for Halifax HRM which as of right now does not even have a Business Plan.The former Director of the Federal Liberal Party went directly from ACOA to Liberal HQ Ottawa, lucky for Harper he is such a bird brain. MacLeod

Posted by: Jack MacLeod | 2007-01-27 2:47:47 PM

Real Monopolies are: Government owned and operated Liquor Sales in the Atlantic Region, Rogers Cable
in the Atlantic Region, Aliant Telephone and Telecommunications - any substantial entity trading in the public sector which does not have any or any significant competition - MacLeod

Posted by: Jack MacLeod | 2007-01-27 2:51:56 PM

It's pork barreling that kept the Liberals going in the same regions, they are not yet weaned off, so what is a minority government to do? Cold turkey won't work in such cases of dependency, too many layers of hangers on would be on the dole and all hell would break out. We know who the big winners would be in that case.

Posted by: Liz J | 2007-01-27 5:07:38 PM

Wal-Mart from what I have gleamed. Saves the average citizen $2000 a year in savings. Mostly poor families.

No wonder the Elitists from Hollywood to the government hate them. The actual tax paying citizen may get a break. Gee he might even spend money on something the government does not want.

The masses only care for popcorn & beer you know latte crowd.

If you don't believe that, just ask the MSM. They propound it every day.

This is a manufactured attack if I ever seen one. No wonder South park parried it relentlessly.

Same with these SUV haters. People for safely helmets on animals, No child without a bubble, & other such ninnies, Get a life!! Meddlers.

Posted by: Revnant Dream | 2007-01-27 5:15:16 PM

It may be one thing to argue based on their business practices (or the practices of other similar businesses) that Walmart is not a Monopoly. However, it is an entirely different matter to use arguements of social benefit (i.e. cheap products for poor folks)to counter claims of monopoly. As long as people have enough money to buy their goods, the only people Walmart truly cares about are its shareholders. It will be interesting to see how Walmart deals with the appetite of its shareholders who after a couple decades of strong growth have seen 5 or so years of stagnant share prices.

Posted by: ALIO | 2007-01-27 5:26:50 PM

"However, it is an entirely different matter to use arguements of social benefit (i.e. cheap products for poor folks)to counter claims of monopoly. "

True enough, BUT

"As long as people have enough money to buy their goods, the only people Walmart truly cares about are its shareholders. "

Arguing this does not make it a monopoly either.

Posted by: h2o273kk9 | 2007-01-27 5:45:42 PM

Its susceptible to the market as well. Some one new may move in with cheaper prices. Those poor are part of history happening by the way. Just like the MSM is dying.

Unlike its counterparts online or those like the Western Standard who take a Principled stand on issues. Not dogmatic drivel driven by political ambition or connivance.

Most trends do not begin with Kings.

There is a reason people buy there, & askew the traditional markets. Rather than patronize them.

Its up to the company’s effected to change their attitudes or prices. Sooner or later a new kid will be on the block than the usual nuts will jaw drop the regular spiel.

By the way no one should be forced into a Union where every wage increase is plundered for ever more union dues . With the endless leeches attached to them. The nepotism, criminal activity, Sycophants & rats running them. Using peoples money for causes or political parties they despise.

Voting with ones money is probably more honest than the voting booth in the retail world. It shows inclinations with patterns of need or use . As well as social fads.

I will ask you. What’s wrong with people saving money? Does it bother you? Or is Wal-Mart now a symbol of the leftist s hate for any real unplanned market.

As for the shareholder when they loose money you will see howls for change. Since this is not the old soviet Union where you where forced to shop at government stores with items rationed. Is that what you really want? A totally controlled market that has never worked in any socialist country?

Posted by: Revnant Dream | 2007-01-27 5:46:41 PM

"As long as people have enough money to buy their goods, the only people Walmart truly cares about are its shareholders"

As it should be, as Wal Mart is *not* an agency of the HRSD.

Posted by: Cato | 2007-01-27 5:50:02 PM

h20273kk9 - I was not arguing that Walmart is a monopoly, just that I think it is far from socially motivated. I also have no problem with some communities not wanting a Walmart and do not see those having a different vision of their communities (one without Walmart) as elitist (as the original poster put it).

Posted by: ALIO | 2007-01-27 6:07:15 PM

The problem with Walmart is the lefty's just hate sucess that is not unionized. They organized groups to stop Walmart from coming into small towns. Their brains don't work to well, as Walmart will just set up in the next town. The whole thing comes down to this if you don't like the wages do not apply,simple. It is no different than a 24 hour operation if you don't like shifts don't apply. Thats what I do.

Posted by: Ken E. | 2007-01-27 6:26:56 PM

Agreed. They are far from socially oriented as their prime objections but I'm sure there is a modicum of concern once their bellies have been satiated.

As for people not wanting one in their community. Fine, but who determines this and how should we react to a landowner selling his property to WalMart knowing their intentions (zoning notwithstanding)?

Posted by: h2o273kk9 | 2007-01-27 6:29:48 PM

h20273kk9 - I agree with their sentiment but don't know enough about municipal law to identify a fair mechanism to address such grievances.

I perceive that Walmart's shareholder's bellies are always hungry and like our own stomach's stretch when they have been fed hefty portions of growth.

Posted by: ALIO | 2007-01-27 6:49:15 PM

"don't know enough about municipal law to identify a fair mechanism to address such grievances"

WHAT grievances? Envy?

"I perceive that Walmart's shareholder's bellies are always hungry"

Of course they are. What's the problem with that?

Posted by: Cato | 2007-01-27 7:43:02 PM

Alio- Your arguments are not relevant.

WalMart is a business not a social service. As a business, its mandate is to purchase goods from diverse sources and sell them to consumers. Period. Please do not confuse a business operation with a social service.

It must make enough in this exchange to cover its costs, which will include its staff, the cost of the goods, their transportation, the cost of the warehouse, utilities, taxes, insurance, etc. AND, it must make a profit, so that it can pay back the shareholders, who loaned money to the business so that it could build that store, buy the goods, pay the staff, pay taxes and, possibly, put up another store.

Not all the money for this operation will come from the customer; that would require a hefty price on the goods to cover all those costs. Some, a good bit, will come from shareholders.

Who benefits from this process? Everyone. The consumers who get cheap goods. Staff - not everyone is qualified to work as a computer programmer. The town, province etc, with taxes. The shareholders, who have invested their money and get returns.

This is an economic process; it is robust, it enables a lot of good. And it has nothing to do with social services. Don't merge the two.

Posted by: old blockhead | 2007-01-27 8:00:37 PM

Gosh! Defending Wal-Mart is not acceptable. After all all those small inefficient businesses that screw over poor people will go out of business if you let Wal-Mart survive. And then there is the other aspect too. Wal-Mart is anti-union! And you know what that means!! Simply that the union does not get its cut of each product sold. What are you some sort of capitalist (ooooh!) or what?

Posted by: NOTR | 2007-01-27 11:16:59 PM

Alio would prefer the social model of business that Jack Macleod describes that ACOA has become.

To say that Wal-Mart is primarily concerned about its shareholders is the typical rant of socialists. A business, to survive, has to balance three priorities:


In this case it is the shareholders who are presently getting screwed over for the last five years with abysmal returns. So we can count on one thing soon, the business model of Wal-Mart will have to change. Just as Loblaws is finding it has to change. Changing and adapting to new circumstances is what businesses do best. ACOA doesn’t. Unions don't. Government doesn't.

Posted by: nomdenet | 2007-01-28 8:26:15 AM

It's really not the issue of having a Wal-Mart or not - it's whether or not they want to play by local planning documents or not.

In Stratford, council has said they are more than welcome to set-up shop, but that they should do so either in the downtown or in the city's west end where all of the community's future residential growth is planned to occur.

Unfortunately, Wal-Mart wants to open in the city's east end, where there is no more residential growth planned and is already over-sercived with cheap garb.

The point is to have commercial growth where the majority of people live so they do not have to drive across town to get their cheap shit.

More people would be welcoming of Wal-Mart if they simply played by local planning rules.

On an aside, I found it interesting in a recent Wal-Mart commercial that they were playing up quality of life they create in communities. Ironically, they showed an image of Canmore, Alberta, which just happens to not have a Wal-Mart and has pretty much banned through their zoning any major commercial development outside of their core.

Talk about being a little disingenuous with their advertising.

Posted by: Chris Rickett | 2007-01-28 9:33:45 AM

The problem I have with Walmart is that they are always buying up farmland and golf courses to build their stores and parking lots. And they often build outside city limits to avoid city taxes. This destroys existing businesses that are paying city taxes (which have to be included in their prices), and destroys the downtowns and existing commercial districts of cities, and destroys farmland forever. It gives the impression Walmart will destroy whatever it has to -- money overrides all other considerations.

Posted by: Mike Bush | 2007-01-28 10:13:56 AM

Walmart is a business...
why the hell should it be socially motivated???

Don't worry about Stratford snobs...
they will all run 20 minutes down the road to one of Kitchener's Walmarts

Posted by: Paul | 2007-01-28 11:07:27 AM

What puzzles me about comments such as above - is the assumptions.

May I just comment - Chris, please don't insult people who either choose to or must, buy goods cheaply. It's not 'cheap shit'. OK? Why is it deemed almost amoral to purchase goods cheaply?

Chris says that Stratford only wants a WalMart if it will build downtown or in the west end. Not in the east end. Why? Why does a city council decide where development can go? On what basis?

Surely you don't want a large store to build in the downtown area. Think.
This type of store requires a large spatial area for contents and parking. Ahh yes, that will mean high taxes. But those high taxes will simply be passed on to the consumer. The goods won't be cheap to purchase anymore. So- what's the point?

And think - the traffic congestion in the downtown area would be a nightmare.
So- surely a City Council isn't dumb enough to insist that such a store model be set up downtown!

As for the 'east end' - why not? Are you suggesting that only westend people will buy there? Maybe. Maybe from the centre and the east as well. And maybe from other nearby towns - who won't have to drive into the centre of Stratford, since it won't be in the downtown. Or across town, since it won't be in the west end.

Mike - developers of new housing also buy up farmland. And golf courses. Are you going to say that all new housing is 'only about destruction'?

Equally, new roads do the same. Only about destruction?
New shopping plazas, new industrial developments, new hospitals, new schools. They all 'destroy farmland and golf courses'. So?

WalMart does indeed build outside city limits. Why shouldn't they? Why should they increase the prices of their goods to pay for high city taxes?

No, I don't think that WalMart destroys city businesses - that are viable. If a city business sells the same goods for twice the amount of a WalMart - then, the customer has a choice - to go all the way out to WalMart (cost of gas, time).Or, the convenience of the city store. The choice is easier if the cost is maybe only 10% more. There is no reason whatsoever to support that inner city store. Just because it is.

I'm aware, for example, of inner city stores that gouge the customer heavily for food supplies, for hardware, for 'health foods'. The prices can be as much as 40% higher. And, they have their customers. Again, however, there is no reason that I can think of why they MUST be retained, even with their high costs to the consumer.

Posted by: old blockhead | 2007-01-28 11:10:18 AM

First off, I have no problem if you want to buy cheaply made products - go right ahead. I prefer to buy products that last. And, I guess if we really want to get into it, many of these cheap products don't nearly cover all of the negative externalities associated with their production, so they're basically state subsidized crap, which is even more depressing.

Does council choose were development go? Indeed that's one of it's major responsibilites - to ensure the orderly devlepment of a community. On what basis do they do this - it starts off with their powers under the Ontario Planning Act, the Provincial Policy Statement and their local Official Plan and Zoning Bylaw (all created with public input and review).

Why wouldn't you want a large store in the downtown? There's plenty of large stores in downtowns. That's where department stores historically located.

Lots of stores require large spatial areas - but it's all about using land efficiently. There's actually an opportunity for such a store in downtown Stratford. And, given an ear for design (ie. zero setback, etc.), could fit in nicely. All box stores need not be ugly stucco buildings on the edge of our towns.

I'm not sure where your high property taxes comes in. In Ontario, while there is a failing attempt at CV, taxes are based on mainly the building type and secondly on the area. The taxes would essentially be same downtown or on the edge of town.

Your assumption that the only way to deliver cheap goods is by building on greenfields is depressing and completely off-base. Wal-Marts have worked in downtowns in other locations, as have other similiar box stores, so I'm sure the cheap goods could still be delivered in downtown Stratford.

I'm not sure if you've been to Stratford, but the traffic congestion is a disaster in the city's east end - and would only be made worse if the entire population was forced to drive there to get their goods.

On to your next about about why the east end could or couldn't work. Again, I'm not sure if you've ever been to Stratford, as for people coming from neighbouring towns, there is a Wal-Mart already 20 minutes to the east of Stratford so attracting people from towns east is pretty much a non-starter. However, towns west of Stratford are not serviced in this fashion, so it would make sense - not only because all of the city's growth is going to be in the west - but also the potential to have people coming from the west, to be able to shop in the west.

I'm not saying I don't Wal-Mart in Stratford. I wouldn't shop there, but they have every right to set-up shop. Point though is that they should follow the planning documents and vision created by the community.

Posted by: Chris Rickett | 2007-01-28 11:33:51 AM

Walmart plays by good business rules. So if one envy its success, compete with it, invent something better.

I wish more business would have no unions. Unions have become cumbersome and often taken over by people who have nothing to do with the well being of employees.

What I tend to criticize is the way companies are acting on the international level. They disregard national behaviour.

One problem is also the way China is using our markets in order to keep its citizens under tyranny.

Posted by: Rémi Houle | 2007-01-28 11:42:37 AM

Ahh, Chris, so it becomes an issue of morality and intellectual superiority.

You 'prefer' to buy 'products that last', but you will graciously allow me to buy cheap products. Very kind of you. But what, if I, despite, frankly, being your intellectual and moral equal, don't have the money to purchase 'expensive products'? Or, what if I, again as your intellectual and moral equal, prefer, actually prefer to put my money into - whatever, and buy those cheap products??? Don't I have the choice in your world or do I end up being intellectually and morally inferior by my choices?

What 'negative externalities' associated with their production? What 'state subsidization"? Are you saying that all inexpensive goods are such, because they are...?? well? Are all inexpensive goods 'state subsidized'? Are all expensive goods not associated with any 'negativities'? Remember, Chris, you are the one who is bringing in morality and intellectual superiority into this discussion. So?

Are city councils pure and unbiased?

No, in this era of cars, the big stores are not downtown. That's why they have moved to malls, which permit car parking. When you require a large storage and display area and must accomodate car transportation - you go out. Please inform me of the 'lots of stores' require these big areas - for both parking and storage.

I don't think so; downtown taxes are not the same as suburban taxes. City insurance vs suburban rates are different. Costs of land purchase or lease are substantially different.

Please provide examples of downtown WalMarts or similar stores of that size and with that type of car traffic. And don't insert the ad misericordiam false argument of 'building on greenfields'. So do new home, school, industrial, road, etc, etc developments. They too, all built on 'greenfields'.

As to whether you would or would not, in your superiority, shop at WalMarts - that's irrelevant to the issue.

I agree with you Remi, against unions. Unions are parasites.

But I don't know what you mean by companies acting against 'national behaviour'. What is 'national behaviour'?

Come now - China is not using our markets to keep its citizens under tyranny. Don't fall into the McGuire Trap of Blind Ignorance. China is rapidly becoming capitalist - and democracy is inevitable. After all - the US could say the same of Canada. More than 85% of our exports go to only one country - the US. So, the US could claim that Canada is using the US, to prevent its industries from being competitive on the world market. Remember, we insist on the US purchasing our goods. If they don't - we get very upset.

Posted by: old blockhead | 2007-01-28 12:09:45 PM

First off, if we want to discuss externalities and state subsidization, the entire business model of Wal-Mart (ie. greenfield infrastructure, auto orientated, etc.) is based on state subsidies, from the artificially low gas prices to a tax regime that doesn't look to maximize utility of land.

The business model of building on the edge of cities requires cheap fuel inputs. The price of our gas hardly covers the environmental and health externalities that are put on the backs of taxpayers, while subsidies to the industry ($1.4 billion a year to the oil biz) keeps oil prices artificially low and the Wal-Mart business model alive.

I have no problem with capitalism and making profit - I encourage it - but please do not try to pass these subsidies off as the free market. The only difference between the Conservatives, Liberals and NDP is who they subsidize - hardly free market economics accounting for externalities in the purchase price.

So is a product really cheap? Well if you start to account for the negative externalities of that product (ie. cheap oil for transport across the ocean, pollution associated with the production, health ramifications from exposing people who use them to toxins, etc), it starts to add up; but since the state covers these hidden costs through ever increasing income taxes it's alright. I wouldn't have thought this board would be riddled with so many socialists trying to look out for those less-advantaged in society. Miracles never cease I suppose.

As to your comment about councils being unbiased - of course they are biased. They have opinions and democracy allows them to make those decisions. All planning law is created by these democratic institutions and should not be sold to the highest bidder because someone doesn't want to follow them. And, just in case they stray from these documents, there's always the OMB to keep them on track.

There are plenty of downtown box stores that seem to accomidate parking - it's called tiered parking and it's called using land more efficiently, rather than wasting it. I've seen lots of grocery stores with tiered parking in central areas (ie. Toronto, London, etc.) I've also seen lots of Chapters (another box store) in downtowns. I've also seen Wal-Marts in built up areas in Toronto and London. And, yet, they still deliver their cheap (yet subsidized) products.

There is also this thing called transit, that when services are centrally located in a downtown core, offers a choice for people. I thought we wanted choice rather than government imposed conformity.

As to your tax argument could you please explain how they are different? Or are you referring to assessed value? In Ontario, the tax rate will be the same for a commercial development in a suburban or core location, but the assessment could be different. And, again, the problem with the assessment issue is that it isn't based on market value and isn't based enough on the size of the lot, as opposed to kind of structure.

The property tax assessment and rate system Ontario encourages outward expansion, acting as simply a government intervention to support automobile geared development. Damn government regulation screwing up the market again.

Posted by: Chris Rickett | 2007-01-28 1:21:38 PM

"Come now - China is not using our markets to keep its citizens under tyranny."

I like this - no they aren't using our markets to keep their citizens under tyranny, but fund arms to take out satellites and challenge American rule.

I'm sure they'll come around to our way of thinking. Sure they will ...

Posted by: Imperial | 2007-01-28 1:23:20 PM

Chris - I have a problem with your conclusions because they are based on invalid premises.

You state that a company that builds itself on 'greenland' is effectively state-subsidized. You are invalidly redefining 'state-subsidy' to mean the purchase of non-urban land! That's quite the 'dicto simpliciter'! You would have to conclude that any housing development, any new development to accomodate increased population is 'state subsidized'. I think that's fallacious.

Equally, you've redefined the use of a car to being 'state-subsidized' - yet another fallacy. The fact that a car uses gasoline - and you then define that usage as a 'state-subsidization' is breathtakingly reductionistic. And invalid. You know, you can do that with everything. The trucks that bring food from the farm to the town - heck, that's state subsidization too? And wrong?

And, as well, have defined the use of a car as amoral (there's your insertion of morality into a situation where it does not exist)...and as polluting and a danger to the environment and the health of people. So, your world rejects industrialism. No cars.

Chris- farms can pollute the environment. Farming can destroy the environment too; ever heard of how agriculture was the 'root cause' of the dust storms of the prairies? How sheep farming can destroy an ecological zone? How manure gets into the waterbeds? Where, for example, did the plague develop? How's that for toxins? How about bird flu? Toxins?

Your claim that WalMart is 'bad' because it builds its centres on greenland is invalid. After all, at one time, the city didn't exist. Then, it bought up farmland and developed. According to your axioms - this is bad.

No new houses, new schools, new roads. Are you now going to say that a town or city cannot increase in size because 'it takes up greenland'? How do you plan to deal with the increase in population?

Equally, your claim that it is effectively amoral to build something that requires car travel - because cars use gasoline - that's ridiculous. So do trains and buses and planes. You'd outlaw them all?

Why do you permit only tiered parking? You consider the other type - wasteful? That's your opinion of course. But, I've yet to see a downtown store the size of a WalMart. The space required is too large, and the traffic congestion would be a nightmare. No city traffic controller wants a large box store in its midst.

No, Chapters and Loblaws are not similar to a WalMart. Frankly, Chapters doesn't sell cribs, strollers and other heavy items. Of course, you feel that the individual who purchases these goods ought to cart them home on 'public transit'.

As for your suggestion that people use public transport - I find that arrogant. Do you expect some woman, with three children in tow, to go to a Walmart, on the bus, and get her staple groceries and lug them back with those children, on the bus? Of course you do. Otherwise, she is guilty of using gov't subsidized cheap gas and also, polluting the environment, and also, releasing toxins. Thanks.

How is a suburban Walmart a 'government imposed conformity'? You are the one who is imposing your morality and ideology on others. Your view of the world, with its inclusion of judgmental morality and superiority is - undemocratic.

Imperial - I am strongly pro-American, but I don't think that you can claim that China's arms activities are directly correlated with tyranny.

Posted by: old blockhead | 2007-01-28 2:21:46 PM

Mr Blockhead sir. That was breathtakingly eloquent.
A Masterpiece of reason and logic. I thank you for instilling in me the glimmer of hope that not all sanity is completely lost to the vacuous philosophy of the left.

Oh and remind me never to get into a debate with you
Like WOW.

Posted by: Jeff Cosford | 2007-01-28 9:16:36 PM

It's all about the same old same old socialist mentality, that the system will fall as soon as their is an economic monopoly.

I am still waiting for someone to show me where the peasants are these days?

Posted by: Lady | 2007-01-29 11:48:39 AM

I thought I might contribute in some small way to the "dog pile" on Chris.
Just picked a WalMart in Germany at random and Google-mapped the address (http://tinyurl.com/3cdr5k). Looks like it is built as a big box with parking lot as well. I am quite certain that it is not possible to conclude that the gas in Germany is "government subsidized".

Posted by: Another Sean | 2007-01-29 1:10:30 PM


Things are more affordable to poor people, in Walmart.

You want poor people to have to pay prices that are too high for them?

If you want to pay more, then you have the right to choose to buy at places that rip you off!

Go ahead. Be parted with your money!

Posted by: Lady | 2007-01-29 4:01:31 PM

First off my friend I have not talked about the morality of consumption - I don't care if you want to drive a car, live in the suburbs, or shop at Wal-Mart. Do it. Just pay the true cost please and stop externalizing the costs on society.

Automobiles and oil is not subsidized? What do you call the over $500 million given to auto manufacturers then? What do you call the $1.4 billion in tax breaks to the oil industry then? What do you call a government that picks up the tab for the environmental and healthcare costs that are caused by companies externalizing their costs on society?

Sounds like government intervention in the market to me.

As to Wal-Mart and greenfield development - first off, given that many municipalities cover the costs of infrastructure for new edge development, this acts as a subsidy for developers; secondly, yes there will always be greenfield development - I'm not against growth - but this development should account for the maximum utility of land, as opposed to state sponsored profits.

As to this statement:

"Why do you permit only tiered parking? You consider the other type - wasteful? That's your opinion of course. But, I've yet to see a downtown store the size of a WalMart. The space required is too large, and the traffic congestion would be a nightmare. No city traffic controller wants a large box store in its midst."

Maybe you visit a bigger city. Maybe we need a tax regime that doesn't encourage and subsidize sprawl.

As to your rant against transit, again I don't care if you don't want to take transit. If you want to drive a car that's fine - just pay the true cost.

And really, since cities have developed in such a fashion as to destroy transit (thanks to heavily subsidized mortgages and oil), isn't it a little moralistic to try to say everyone should embrace the personal automible?

Shouldn't people have a choice to take transit that is efficient and timely?

I thought we wanted a society with freedom of choice, rather state sponsored conformity. Bring the market back and please let's just get rid of all this damn corporate welfare.

Posted by: Chris Rickett | 2007-01-29 5:32:50 PM

And here's a nice Wal-Mart downtown:


Posted by: Chris Rickett | 2007-01-29 5:39:04 PM

Chris - what's this talk about 'true costs'? And 'society'? Kindly define your terms. Explain 'true costs'. Be specific. Explain 'society' - remember, each one of us is a member of 'society'. You insist on Only One Mode of Behaviour.

Subsidies? What does that have to do with health, environment or ..anything? Did you know that farmers are subsidized? That having children is subsidized? That dairy, egg, forestry, grain production, meat production..is all 'subsidized' in your terms, because of either special taxes, special rates of purchase, etc etc. Health care is subsidized - the society pays for it. Hospitals and universities are subsidized. So-what correlations are you trying to establish?

What you seem to be erroneously saying - is that you feel that if the collective or society does something, then this is a 'subsidy'. But the role of a society is to enable and operate collective actions- such as building roads, enabling economic development, housing development etc. The individuals in that society operate..as individuals..within that society. And, the two 'work' together.

You seem to be saying that IF a society carries out its collective duties, eg building a road, in - then, this is a 'subsidy'. If it enables economic dev't by taxing industries differently than individuals - then this is a subsidy. So what? That's how the collective operates. That's not 'intervention'!!!

Don't bring in fallacious variables such as 'health costs' and 'environmental costs'. Having a horse drawn carriage can be unhealthy and harm the environment.

What you seem to be saying is that industry harms one's health and harms the environment. I've already pointed out that this is an invalid opinion on your part.

Setting up a WalMart in 'greenspace' is not an act of state subsidization. Neither is a new housing development, a new shopping plaze....Kindly define your terms. And you are just repeating your opinions, which are unsubstantiated and invalid.

Again - no city traffic controller wants a high density traffic site in its downtown area. So, a WalMart would NOT be welcome in the downtown.

How noble and kind of you to allow people to drive cars. Especially the woman with three kids, going to pick up groceries and a stroller, whom you think, morally, ought to take 'public transit'. Grow up and don't be so patronizing.

You are the one who rejects freedom of choice. You are the one who views with moralistic contempt the person who drives the car, who shops at WalMart, who purchases a home in the suburbs (or any home for that matter since at one time, all was 'green'). You are the one who denigrates building the school, the road, the hospital - since in your view, they are all built by the society and therefore - are 'state subsidized'.

What do you mean - 'pay the true cost'???? Again, define your terms.

Now, we've got 'heavily subsidized mortgages'. My god - are you going to say that the government is into mortgage subsidization? Are you against people owning their own homes, as well as owning cars, as well as building new homes, as well as building new schools? What else are you against? Oh- you are against government, because it 'subsidizes oil'. Unreal.

You are the one insisting on conformity - where everyone must use public transit - even when they have to carry a week's groceries, three children, a new stroller and a load of laundry.

You are the one belittling new housing. Again - answer the question - where are you going to put the new people???
You are against building new buildings, because that's 'sprawl'. So - explain - how are you going to house the larger population??? Are you going to send all the children to the same one room school?

How are you going to house a population that has grown from, let's say, a small town of 100,000 to one of 500,000? Answer. No new homes, no new schools, no new shops, no industries for them to work at, no hospitals, no..nothing? Because it's all subsidized? Because it all takes 'greenland'? What kind of a Cloud-Dweller are you?

Posted by: old blockhead | 2007-01-29 6:34:07 PM

Okay first the lesson in economics - there are these things called externalities. Some are negative (ie. pollution) some are positive (ie. education). When products or services have externalities it is a sign that the market is operating inefficiently.

For instance, when environmental degredation or health problems occure because of the use of a product (ie. oil), and these are not factored into the price of consumption (where marginal benefit equals societal benefit) it becomes a negative externality.

If we were to have true free market where production was efficient, all of these externalities would be accounted for in the purchase price. Unfortunately, we do not have this - we have a market that externalizes many costs, which are then picked up by the taxpayer.

Your style of arguing is interesting, but getting tired - instead of using the old set up a strawman and take him out, could you please give me some facts to prove that $1.4 billion in tax breaks is not a subsidy to oil companies, or that $500 million to auto companies, or CMHC's actions after WWII to subsidize the advent of mass-suburbia, were not subsidies that have all resulted in an inefficient market? Please expalin to me how these are not government subsidies?

Again I don't care if you want an SUV, a brand new house on the edge of the city, or want to shop at Wal-Mart, but please account for these externalities and let us have a true free market. I support development. I make my living from it - I just want the true cost to be accounted for.

As for Wal-Mart's downtown - every planner wants a lot of traffic and lots of people in their cores. You'd be foolish to say no to it.

What's so ironic about this entire discussion is that you would probably be the first person to rip into welfare, yet you defend state sponsored welfare to no end. I guess this is the problem with most federal parties these days and why people like myself left the conservative party - they forgot what fiscal conservatism looks like.

So please, enough with the straw man tactic, and give me some facts please.

Posted by: Chris Rickett | 2007-01-29 7:57:55 PM

I think what Blockhead is trying to say is that growth can only happen with state subsidies. Poor misguided neo-con.

I like that picture of Wal-Mart in China. I bet you the prices are super cheap because the supply lines are so short!

Posted by: Imperial | 2007-01-30 7:40:16 AM

All corporate welfare should be stopped.

Posted by: Set you free | 2007-01-30 9:23:24 AM

First, imperial,- don't be juvenile with the 'neo-con' names. Stick to issues and don't move into name-calling. Second - I'm not saying that growth happens with state subsidies. I'm saying that Chris hasn't a clue about basic economics and that's it's an error to set up the collective, ie, the state, as the Evil Other.

Now, Chris, you are, I am presuming, young and steeped in socialist/communist ideology which does exactly that - sets up the state or the collective, as the Evil Other. That's just an invalid and totally unworkable view of a society.

Chris says: "Okay first the lesson in economics - there are these things called externalities. Some are negative (ie. pollution) some are positive (ie. education). When products or services have externalities it is a sign that the market is operating inefficiently."

That's not economics; that's nonsense. External to what??? So- any 'externality' (such as education) - is a 'sign that the market is operating inefficiently'?????? Get real.

There is no such thing as X without an effect Y. OK? Is Y your definition of an 'externality'??? A better term, Chris, is 'result or effect'.

Now, if you think that any cause has NO problematic effects - then you are living on some kind of cloud. Food can kill; but the absence of food can kill. A drug can have a positive effect on one organ and also a negative effect on another organ.

Now, first explain how we humans are in full control of the world, that we know everything, and can control everything (ubermensche that we are)...and can both know the full effects of X on Y - both in the short term, the long term and forever?

Then, explain how we build the costs of the long term effects into something. Are we going to say that aspirin must be priced at $$$$ because that price MUST include all the possible potential effects that might arise in the population in 30 years by the use of this drug? Get real.

Are you seriously suggesting that we must build into the price of a car, the long term effects of using that car? How would you price the long term beneficial effects - the ease of transporting goods and enabling cities to grow, the rapid movement of fire trucks and etc? Well?

Do you now, know all the effects? That's unscientific. It's called Godel's Law - and setting up a situation where every result is fully articulated or known - is a violation of that Law.

You are the one with strawmen arguments, Chris, and you still haven't answered my questions on how you would enable development, since you object to taking up 'greenspace', to using cars, to using oil.

Now, you are into a false argument that ALL effects must be known and built into the price. Again - that's impossible (Godel). AND, how do you account for inflation? The effect of X might not emerge for a full generation; the inflationary amount has increased. How are you going to build that into the current price of X?

No, don't move into the false argumentative tactic of 'every A wants B' (ad populam argument). That's false. No, every planner does NOT want increased traffic in the downtown core! That's a nightmare. That's why the big malls are built in the suburbs - so that car traffic moves OUT of the city core. The city core is built, not for cars, but for a large population of pedestrians from 9-5 and public transit. Cars clog those streets. So, don't try fallacious arguments.

State sponsored welfare? What on earth is that? Have you swallowed The Communist Manifesto babble. Define your terms.

I can't imagine that you were ever in the CPC. Never. Not with that communist jargon you've been providing us.

Again - you still haven't, after repeated requests, defined your terms. What is a 'state subsidy'? What is a society? How do you expect a growing population to be housed, fed, schooled without taking up 'greenspace'?

And if you really expect that the nature of X and its results Y can be fully defined, priced, and built into the current costs of X - well, you need to take basic economics and, basic logic.

Posted by: old blockhead | 2007-01-30 9:26:31 AM

Old block:
Really you should avoid talking about economics, you make yourself look like quite an idiot. Externalities are not economics?!? Are you sure??

Posted by: TheEconomist | 2007-01-30 10:17:10 AM

TheEconomist - for Chris to simply repeat what he reads in Wikipedia (and that's what he is doing) is not an explanation of his argument against WalMart. And, as noted, his is a marxist (communist) ideology.

What do 'externalities' have to do with setting up a WalMart in the suburbs? That's the discussion. What does enabling people to purchase cheap commodities have to do with government subsidies? That's the discussion. Chris is not dealing with these issues.

Chris is arguing from a Wikipedia based-communist perspective that ignores basic realities. Such realities as - that all X (causes) have Y (results). Now, the relation between X and Y in real life is never unilinear but is always complex. Chris/Wiki/marxist analysis is unilinear. That's the first error. He is saying that UNLESS it is linear, it has 'externalities'. No- there is no such thing as a linear transaction. It is always complex. That's life.

To attempt to reduce Y (results) within the full control of X (agential causes) is impossible. Why? Because there's no such thing as a simple linear interaction. That's what Chris's leftist socialist or communist 'externality economics' is doing. Reducing complex interactions to unilinear acts. That's impossible. Outside of a Marxist tract or lab - it's impossible.

Furthermore, the definition of a good or bad 'externality' is often highly subjective.

So- Chris's economics is pure socialist/communist dogma - with which I strongly disagree. It is completely unscientific. Unilinear interactions only take place in the lab. Not in real life. Even the most simple direct reciprocity interactions are never linear but complex. To define complexity as 'externalities' by reducing the interaction down to a linear one - and saying that the other aspects of the interaction are 'external' - is nonsense.

Posted by: old blockhead | 2007-01-30 12:32:51 PM

Oh Blockhead your approach to an argument of simply saying the person is not only simple and tired, it's also completely off-base. Please pick attend any first year economics class to get a referesher on how market economies should be running.

Externalities are what happen in an inefficient market plain and simple. I'm talking free market economics in its purest form where society doesn't pick up the tab for corporate profits - which is currently the case in many markets today (including your vaunted Wal-Mart).

You still have not addressed my question - how is $1.4 billion to oil companies, $500 million to the auto industry, or a municipality extending servicing to a new greenfield Wal-mart, not a subsidy?

Please stop your rhetoric of communism (which is the approach of ever-failed neo-con when they can't find facts) and please explain this to me.

Although I must say I really do find it interesting that you are talking about how complex life is and how it can't be caught by simple market forces. You really are starting to sound like those socialists you so despise.

I work in economics everyday. I think you need to start doing the same.

Posted by: Chris Rickett | 2007-01-30 6:38:59 PM

Oh Blockhead your approach to an argument of simply saying the person is a communist is not only simple and tired, it's also completely off-base. Please pick attend any first year economics class to get a referesher on how market economies should be running.

Externalities are what happen in an inefficient market plain and simple. I'm talking free market economics in its purest form where society doesn't pick up the tab for corporate profits - which is currently the case in many markets today (including your vaunted Wal-Mart).

You still have not addressed my question - how is $1.4 billion to oil companies, $500 million to the auto industry, or a municipality extending servicing to a new greenfield Wal-mart, not a subsidy?

Please stop your rhetoric of communism (which is the approach of ever-failed neo-con when they can't find facts) and please explain this to me.

Although I must say I really do find it interesting that you are talking about how complex life is and how it can't be caught by simple market forces. You really are starting to sound like those socialists you so despise.

I work in economics everyday. I think you need to start doing the same.

Posted by: Chris Rickett | 2007-01-30 6:40:04 PM

There's another great irony in this - Old Blockhead asks Chris to stop using neo-con names, and then proceeds to rant and rave about Chris being a communist.

As to his comment about planners not wanting shopping downtown, I don't think he's up on the latest planning literature. Most planners and cities are heading out on visions to turn their downtowns into live/work/play areas, full of places to live, jobs, shopping (ever seen a Loblaws superstore downtown?) and culture.

Posted by: Imperial | 2007-01-30 6:57:53 PM

"I'm talking free market economics in its purest form where society doesn't pick up the tab for corporate profits"

Well, then WHO is "picking up the tab" for corporate profit? Does the stork bring the profit in a free market situation?

Posted by: Cato | 2007-01-30 7:37:53 PM

Consumers and taxpayers. But I guess if it's from the same pot it doesn't really matter.

Just looking for clear lines between consumer choice and true costs, as opposed to the government meddling and mudding of the waters in-between the exchange.

Posted by: Chris Rickett | 2007-01-30 7:52:33 PM

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