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Posts Tagged ‘Low Prices’

If you regularly read CAI then you need no introduction to the fact that I am a fierce believer in capitalism and the free market as the best means to manage economies.  This will oftentimes lead those who disagree to battle cries of greed, corruption, scandal, more greed, callousness, materialism, greed again, etc.  I have tried my best to be completely honest and say, “Yes, this can exist within this framework.”  I then try to make a convincing case that the alternative is actually worse, and best to try and work within the most complete and realistic of economic policies, in my opinion free-market capitalism, then to embrace the alternative.

One of the shining examples of both the best and worst of this very arrangement is a company like Walmart.  Many people have a visceral reaction to Walmart, and actually hate it as an entity and I believe that is an irrational viewpoint.  I support Walmart and their business acumen, and at the same time I can easily acknowledge their shortcomings in matters of integrity and corporate values.  I believe that good and successful businesses will make good and honest choices as far as how they treat both their customers and their employees.  But that is not a prerequisite of forming a business, and nor should it be forced upon companies.  In general I believe organizations should be able to fall or succeed based on their practices and how consumers respond to them, not on forced requirements.

WalmartOne of the more popular diatribes against the company is the 2005 film Wal-Mart: The High Cost of Low Price.  If you have not seen this, then I highly recommend you do.  While this film is so incredibly biased as to frustrate anyone truly interested in objectivity, it is still interesting to see, especially for it’s testimony from former Walmart employees.  Their testimony definitely shows the underbelly of this company, and some of the demons they have.  This film is hardly a documentary though, more like propaganda, as there is not even an attempt at telling two sides of a story.  For instance, one section of the film comments on the size of subsidies that governments will hand out to Walmart to get them to set up shop in their cities or states.  Subsidies as high as $2.1 million, which is “money that could have saved the 3 schools that we had to close this year,” as one local citizen lamented  A counterpoint that the film could have made is to point out that subsidies are not cash.  The city or state did not give Walmart 2 million dollars that it could have spent on schools, but rather did not require Walmart to pay 2 million dollars in various starting taxes.  A second point could have been to show how much tax revenue Walmart brings in to a city or state.  This article from 2002 talks about Walmart moving a store from Rocklin, CA to nearby Roseville, thus releaving Rocklin of $650,000 in annual tax revenue, 10% of their combined revenue.  So you could see a city being justified in trying to lure Walmart to it’s town when any subsidies they allow could be replenished in a few years, and then have enormous positive generation for years to come.

Here are some other areas where I think Walmart gets shortchanged, or misrepresented.

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