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Tuesday, February 12, 2008

Saint Samuel of Kingfisher

Saintsamuel_2 At a time when pretty much everything written in Canadian media about Wal-Mart is reflexively anti-corporatist, it was truly refreshing to read Fazil Mihlar's piece in the Vancouver Sun calling for Wal-Mart to receive the Nobel Peace Prize and be beatified by the Vatican. Though it was surely written tongue-in-cheek, and the second proposal is admittedly quite silly, men like Sam Walton  should be seriously considered for the Nobel Peace Prize, he's far more deserving than Al Gore or the IPCC.  Mihlar's article is no shameful apologetic for a necessary evil but a brazen defence of the uplifting effect that Wal-Mart  has for people around the world. To those who say that Canada doesn't need more Wal-Marts, Mihlar answers that consumer demand determines their necessity, not the edict of some community activist, newpaper columnist, bureaucrat, or politician. His argument in brief:


- Provides employment to 1.9 million people; the best defence against poverty is a job.

- Creates thousands of job opportunities for people in developing countries like China and India; this keeps hunger at bay in many households.

- Doles out hundreds of millions of dollars each year in dividends that help fund the retirement of millions of people; the company had sales in excess of $348 billion and a net profit of $11.3 billion in 2007.

- Sells food, clothing and other necessities to Canadians, Americans and others at prices that are 15 to 25 per cent below what other supermarkets charge; this helps millions of low-income families stretch their dollars.

- Pushes the inflation rate down and helps keep interest rates low; this comes in handy for millions of families when borrowing to buy a house or household appliances."

While all of this is true, and Wal-Mart is undoubtedly one of the best beneficiaries of poor and middle class Americans, there are some real problems with the way Wal-Mart conducts its business. I'm not talking about their unwillingness to provide all employees complete health-insurance, their unfriendliness to unions, or their "preying upon" the "defenseless poor," the two practices I'm concerned about are these:

Wal-Mart has a nasty habit of aggressively lobbying for minimum wage increases at the federal and state level. Minimum wage laws are perhaps the biggest source of unemployment amongst those who need work the most, those with few skills, little education, and no options. The main reason behind their support of minimum wage increases is that Wal-Mart, due to its better efficiency, can successfully cut costs to be able to afford wages above the minimum and still make a profit; its smaller competitors often cannot. I'm all for  free-competition but this tactic of getting the government involved in bullying its competitors out of business is not acceptable and is not free-enterprise.

Secondly, if this  2004 report is to be believed, Wal-Mart is a queen amongst corporate welfare queens, with over $1 billion in direct and indirect subsidies to the company taken from the pockets of taxpayers. The losses are not only for the taxpayer, but retailers who don't get such extensive government support operate at a disadvantage. This isn't free-enterprise either.

On balance, Wal-Mart is a shining example of  the ability of enterprise to lift multitudes out of poverty and improve the lives of millions, I just wish they would stop sullying the good name of capitalism by bringing further government intervention into what should be the purely private realm of business where the rules of voluntary contract, free association, and private property rule the day.

Hat tip: Steven Horwitz & Brad Spangler

Posted by Kalim Kassam on February 12, 2008 in Trade | Permalink


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People who hate Walmart must really hate poor people. Walmart, like capitalism, raises the standard of living for the poor dramatically.

Posted by: Zachary Young | 2008-02-12 4:55:39 AM

Everyone should go to youtube.com and look up "Penn and Teller's Bullshit" They had one about Wal -Mart that was simply amazing. Before warned if the "F-bombs" and such offend you, do not watch it. For the rest of you, it well put the whole "Wal-Mart" debate into prospective.

Posted by: BullSh++T | 2008-02-12 6:03:56 AM

Companies exist to make money for shareholders. If you don't like it don't shop there and if you don't like me shopping there well, you gots a problem buddy!


Posted by: Epsilon | 2008-02-12 8:58:09 AM

Let's not forget the fact that Wal-Mart is also a very well run retailer. Plenty of well trained staff, and an efficient lay out.

I have lived and/or worked in a number of smaller communities that have opened Wal-Marts within the last couple of years. One of them an Army Base community. I think all of them have seen positive results, with fewer locals heading to the big city every time they need supplies. The Army town I mentioned was in the worst need of reasonably priced merchandise. Army families always take it on the chin in these little towns.

Most of the local businesses that suffer have been getting away with robbery for generations, so they get very little sympathy from their former victims.

Posted by: dp | 2008-02-12 9:11:46 AM

Just connecting a few dots here this morning.

WalMart is doing more for China than any other country on the planet. Eventually China will be the major consumer as well as the producer of WalMart products. Let's see how we like that when it happens.

Who will do the cheap desperate labor Walmart when the Chinese have had enough of it?

Will China simply buy Walmart?

As China becomes more wealthy and bold in the world, will the Islamic Jihad turn on them for being Capitalist pigs and start immigrating there for welfare and to take over and destroy their culture as they are doing in Europe and North America?

Let's not dole out the Nobel Prize just yet.

Posted by: John West | 2008-02-12 9:33:02 AM

Sorry guys... but this spew is making me puke. China might as well buy Walmart. Walmart belongs there...

Posted by: Dawn | 2008-02-12 9:52:04 AM

It's a drop in the bucket but China has a muslim population in the millions already. I'm assuming they behave a little better than ours. The Chinese system is probably easier for them to relate to.

I'd be more than happy to pay extra for a Canadian made shirt. I used to find them in the high end shops, but no more. The expensive shirts still come from India or Pakistan, so why bother?
Are they better allies than China?

Chinese made electronics are so poorly built that we might see a shift away from them. There are so many component failures that the lower cost just isn't worth it. And it doesn't look like Chinese cars will catch on any time soon. It will take them decades to even pass safety codes.

If the threat from Chinese products becomes too great, we can always slap duties on them. Turnabout's fair play, right?

Posted by: dp | 2008-02-12 10:03:22 AM

Your being manipulated and coerced to buy sheit you don't need! Those 1.9 million jobs came at the cost of 2.3 well paying jobs.
And I thought socialism was the road to serfdom!
You don't know how or where the products you buy are made!So you do not know what you do!

Posted by: notloz | 2008-02-12 2:29:33 PM

you guys nit pick facts and omit reality on the subject to justify the unjustifiable!

Posted by: notloz | 2008-02-12 2:30:25 PM

you guys nit pick facts and omit reality on the subject to justify the unjustifiable!

Posted by: notloz | 2008-02-12 2:30:41 PM

I see notloz must be high again on something. As to people being manipulated and coerced to buy things they do not need, no one can be coerced and only feeble minded people may be manipulated into buying what they do not need. In any case this is called advertising and everyone does it including the brain dead lefties.

Posted by: Alain | 2008-02-12 3:18:19 PM

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