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Écrasez l’Wal-Mart

As a nice set piece to my May Day paean to wildcat unionism–that is, workers organizing themselves on the free market, without the suffocating patronage of the government, Ampersand passes along a nice reminder that modern corporate capitalists–the Behemoth from Bentonville chief among them–are not creatures of the free market; they are Frankenstein creations of government privilege for the bosses. Jonathan Tasini at TomPaine.com (2005-04-21) is mired in a host of confusions about free market economics, but he is precisely, and importantly, right to remind us that Truth is, Wal-Mart could not survive in a real free market. Remember that we are talking about a company that routinely robs the land that it needs for its gigantic stores by Mau-Mauing local governments into using eminent domain powers and handing out tax-funded subsidies. Remember that Wal-Mart’s business model for the past decade has been directly dependent on the repression of workers’ wages by the government of Communist China.

Putting aside the morality of forcing people to work in slave-like conditions, the so-called free market does not exist in China when it comes to wages. China artificially suppresses wages by anywhere from 47 to 85 percent below what they should be, according to the AFL-CIO’s complaint about China’s labor policies filed with the United States Trade Representative last year. With Wal-Mart as its willing customer, an authoritarian regime ruthlessly warps the market for wages by enforcing a system that controls where people can work and imprisons and tortures people who attempt to organize real unions or strike. Maybe the rock-bottom labor costs are really behind Wal-Mart’s slogan always low prices, but the company is certainly not an example of how to win in a free market economy.

It’s easy to see why Wal-Mart and its conservative defenders discard ideology: money. By ignoring free market principles, the left-wing Harvard Business School estimates that Wal-Mart reduces its procurement costs by 10-20 percent, primarily by taking advantage of the artificially suppressed labor market in China.

Back at home, Wal-Mart’s free market mantra stops at the water’s edge of the public till. By one estimate, Wal-Mart has pulled in $1.5 billion dollars in taxpayer funded subsidies (see www.walmartwatch.com). And that’s at the low end, because subsidies are sometimes hard to track based on the lack of public reporting requirements. Wal-Mart is happy to cash in on government largess like property tax abatements, infrastructure support, free land and just straight-out cold cash–all of which are the antithesis of free market ideology.

Free software advocates sometimes like to point out that there are a couple of meanings of the word free; there’s free as in free speech and free as in free lunch. The thing about Right-wing blowhards is that they routinely support pro-business giveaways, whether in the form of subsidies to Wal-Mart, endless coercive monopolies for pharmaceutical companies, or government-enforced union busting (see: right-to-work laws; see also: Taft-Hartley). When they start pontificating on the virtues of the free market they never mean it–unless by free market means a market that’s free as in free lunch, i.e. a government-guaranteed market for big consolidated businesses that they don’t have to work for or earn.

That’s the real reason to oppose Wal-Mart: not because they supposedly represent the worst of the free market (it isn’t a creature of the free market at all), and certainly not because of some cracked anti-consumerist claptrap. The problem with Wal-Mart is that they steal your money and use it to keep their business running whether you want to shop there or not. But it’s for precisely this reason that I think the best way to take the fight to Wal-Mart is not to dismiss the free market or to try to block Wal-Mart through local zoning controls. Wal-Mart is what it is today because it’s better at manipulating the State than you are, and there is no reason to think that that’s likely to change substantially as long as they remain what they are. (Trying to turn Leviathan against Behemoth has always been a sucker’s bet.) If Wal-Mart couldn’t survive in a free market, then the best way to fix what’s wrong with them is to make them compete on a free market–a real free market, not the corporatist sham market of today–a market where workers organize in freely-constituted unions that aren’t subject to the constraints of government colonization, where competitors can enter the market without having to buy off town and county governments and homeowners aren’t forced to sacrifice their own homes on the altar of Commerce. The system of state patronage is the problem; freedom, as usual, is the solution.


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1 reply to Écrasez l’Wal-Mart Use a feed to Follow replies to this article

  1. John Lopez

    Although it’s obviously tough to tell, I’d bet that Wal-Mart would continue to outcompete other companies in a free market.

    Yes, Wal-Mart takes folks’ property with the help of the local thugs. So do a lot of other businesses.

    Yes, Wal-Mart has things made in China. So do a lot of other businesses.

    So what’s different about Wal-Mart? Answer is that they have a better business model, and it doesn’t depend solely on the State. (For one thing, they’ve gotten very good at keeping out unions. For another, they’re good at skirting the asinine minimum wage laws.)

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