Cig, I think it would be accurate to describe your posts as presenting WM’s business philosophies as being destructive to private enterprise and to the detriment of communities and workers, and the laws of incorporation as being flawed toward pooling capital. I respect your arguments, they’re well thought out and well written, I simply disagree with them. I believe WM’s business philosophies are more beneficial than destructive. There are two sides to every coin.
And I believe the laws of incorporation have allowed for generations the pooling of capital necessary to create successful large businesses. Today we have an entirely new business models created by Microsoft and by the internet, but the old business model still functions in the POS retail business. Remember too that incorporating protects investors from the loss of personal assets should the investment go bust, allowing those whose investments promote innovation the freedom to take risks, without which few large corporations would exist. Also remember that those same laws of incorporation allow Boeing. Huges Aircraft, MacDonnell Douglas, GM, Ford, Chrysler, and the countless other corporations necessary to keep our economic engine turning. Small private companies could not have built B52 Bombers, missiles, rocketships, and skyscrapers. It takes pooled capital to do these things. Laws of incorporation allow, and even encourage, the pooling of capital.
Wentwest, It’s surprising how multifaceted most people are.
Many years ago when I was young and arrogant I worked on a classified program for a large DOD manufacturer. Our offices were secured behind a concrete block wall with a cypher locked door and a guard/gofer posted immediately behind it. There was a very polite elderly gentleman who filled the position. He came in every day with a nice suit and tie. I initially assumed he was a retired man on a fixed income working a low level job to make ends meet. Strangely, every day at lunch he read the Wall Street Journal. I took the time to get to know him and eventually learned that he had owned a successful restaurant chain in NYC, sold it for millions, invested the money and moved to NH to retire. His wife had passed away, he grew bored, and took our job just to get out among people. He was reading the Wall Street Journal to keep track of his investments.
I never forgot that man. He taught me never to make assumptions about people.
I reject the premise that WM has greater selection and lower prices. Just take a look around the store. Half of the square footage is Kmart or dollar store quality soft goods that are not a great value. Small electronics with little selection and unknown models. Hardware is a joke as well as the minimal auto supplies. Paint? Not much variety there and all one brand. Personal care? Very limited selection and a tiny office supply section. Garden store is a joke too with plants stressed and unlikely to make it to the next season. Products are packed especially for WM but not labeled as such. My TP example of narrower rolls and smaller rolls compared to the same brand in other stores is no great value. Cut the size of the product to reduce the price so it appears to be cheaper. Snapper mowers and blowers? They were redesigned especially for WM as cheaply as possible. Go to a dealer and the products are different but the color is the same giving the illusion of the same quality. Its a great fraud on the public as they fall for the marketing line. Value? Variety? Good for the underclass? I think not.
Now its not just WM. The other big boxes have gone down the same road where you best not buy power equipment there and hard to find quality power tools. When the public finally wakes up to buying this throw away junk and IF a local will offer better quality, locals will thrive again.
mountainbike, let me just sum up by saying that I find all large organizations, both public and private to be very disturbing. They are inconsistent with the “spirit of '76.” And I do spend a lot of time interpreting the world’s problems in terms of the negative externalities produced by those large organizations. The current mind-boggling level of scandal and corruption in the Ukraine, for example, would not have been possible without large states AND the (now-globalized) laws of incorporation. So I emphasize and daily see the dark side.
You are coming from the standard mainstream side touted by the economists and many historians, and running though all of our textbook understandings of ourselves over the last century and a half. It emphasizes the positive externalities. It’s important and not “wrong” - but it is only one side of the coin.
I am well aware of the kinds of things that are taken to be the positive externalities. But on the whole, I don’t actually think that many of them are positive. And I think they are outweighed by the negatives. Yet there is always a strong tendency for the negatives to be explained away as something else - such as deficiencies in the character of persons or something (whether corrupt organizational leaders or lazy workers or whatever). I will tell you that I would at least feel better if our culture was full of a more honest attempt to come to grips with both sides of the coin. If we could at least teach kids that markets and corporate capitalism are not synonyms that would even be helpful. The pools of capital matter - A LOT - if you want to have a free and open society.
The old charter system was there to try to reap the positives and minimize the negatives. I don’t think it would work anymore. But I’d rather have stuck with it.
On this point: “Small private companies could not have built B52 Bombers, missiles, rocketships, and skyscrapers”
That’s not necessarily all that true. It will depend some on the job and on how the small firms are organized. But all of the business people and economists are very hot on the “network firm” these days. There is ample evidence to suggest that small firm networks are capable of achieving impressive economies of scale along with more innovation and better quality and variety of goods and services. At the same time, this kind of thing greatly reduces the centralization of power and reduces negative externalities. The small firms can also carry limited liability, btw. Some degree of limited liability has its benefits.
I would also mention that another cultural tendency we have to chalk up our “big” industrial “achievements” (railroads and skyscrapers and B52 bombers) to “private enterprise.” Just about everyone grossly underestimates the very active role of government at all levels in our economic history. It should actually be quite obvious in the case of B52s, missiles, and rocketships. But there isn’t any major areas of the economy that is as simple as private enterprise.
We’ve had similar conversations before mountainbike, and I enjoy them and appreciate it.
Walmart’s business has become a “tail wagging the dog” scenario. Walmart does not invest in brick and morter factories or even lease factories to employe workers, Walmart finds ambitious, often unscrupulous entrepreneurs in 3d world economies who will establish manufacturing facilities in dangerous, unhealthy settings and hire workers at pennies per hour to produce merchandise at 1/10 the price of a beter quality domestic product and sell it for 1/2 the price of the domestic. The fortune is in the spread.
People recognize that generic cereal is just unbranded Kelloggs or Post and somehow relate that reduced price resulting from contracting for marginal productivity to Walmart’s ability to discount. Walmart’s great success has come from their choke hold on those wannabe wealthy unscrupulous entrepreneurs who jump through Bentonville’s hoops in hopes of becoming millionaires, expecting their workers to jump through hoops for a few pennies an hour. A great many are desperate and do for a while. And quite a few burn to death.
And the grandest of ironies is that the party that for decades demonizd Communism is the party that now so vehemently supports trade with the Communists of China and Vietnam. They do have their price, apparently.
I have only one response to those who feel that paying their employees a fair wage, offering outstanding benefits and charging higher prices to cover their exemplary employee treatment will undercut their competitive edge and cause them to wither and die… LL Bean. What did LL Bean do when they had surging profits this year ? They gave nearly all back to their employees in bonuses and benefits. Anyone got a relative, friend or acquaintance working at LLBean. Ask them what it’s like. They could have expanded many times over but are doing it in a slow strategic way to maintain the ethics they long ago established in the treatment of their employees. It has little to do with putting others out of business.
Notice the difference between the wording in the checkout line between Hannaford Bros. grocery stores and Walmart. It says a lot about their attention to detail and their obligation to their customers.
Walmart…in their express lane check out; " twelve items or less"
Hannaford Bros. in their express lane check out; “twelve items or fewer”
Now most don’t really care, including dumb butt me, but my English major wife did who thought at the very least, the printed word should be as grammatically correct as possible as a responsibility we all have to our young.
So being a wise guy, I and I’m sure others, mention it to Hannford Bros and Walmart when at one time both said…"or less"
One changed, the other I guess is too big to bother.
Rod, WalMart is not a manufacturer. Never was, never claimed to be. There is no evidence that Walmart seeks out anything other than the lowest bid. What manufacturers in third world countries do is up to the governments of their respective countries to regulate. Frankly, these manufacturers may be taking advantage of their employees by our standards, but many of them would probably be starving were it not for those manufacturers. Visit a third world country with no manufacturing at all and you’ll find starvation, no hygiene at all, beggars in the streets, prostitution, disease, and death. Even paltry wages are a huge improvement for these people.
As to the English question, well, I never really did very well in English. Physics is easy. It makes sense. It does what it does with total disregard to any “rules” we might invent, and we simply need to figure out why it’s doing what it’s doing. And once one understands it, it isn’t a “commit to memory” thing. English, on the other hand, is to me a whole bunch of made up rules all of which have exceptions and many of which change over time. It works, and for that I’m grateful, but it ain’t exactly a science. No disrespect meant to those who teach it, as it is a critical skill for communication and for success in our country, and those who teach it play a critical role in our childrens’ well being, but it was never my forte. I can’t remember all those rules.
Whew ,some salient points however,I do not mind families making a good living,when they are worth more then the GDP of several third world countries,I have a nagging suspicion that the playing field needs a little grading,when 85 people control over half of the worlds wealth,something seems a bit askew.
But thanks to this discussion,I believe my shopping habits may change a little LL Bean and the Duluth Trading company my get more of my business in the future,employee oriented businesses should be lauded and upheld,I’ve seen the same thing happen around here that the Fat Cats really get upset when somebody that treats thier employees better moves in and does the job for less,greed,greed and more greed,when is enough,enough? OL’ Henry had a lot of shortcomings but He sort of pointed some businesses in the right direction and the government does make Mega Manufacturing possible-Kevin
Actually mountainbike, what poor nations do is more frequently up to the World Bank, IMF, and WTO. Many of those impoverished beggars were just fine before global capital tried to “modernize” them, entrapping them in debt, and then imposing structural adjustment programs on them. I’m not saying that the intentions were bad either (though obviously there frequently are some). It’s just the results of “modernization theory” gone awry. The fact that we have access to so much so cheaply is very directly tied to the fact that they have so little.
Its also the case that no governments are actually independent of global capital any longer, including our own, though obviously the US govt can stand up to it better than say, that of the Ivory Coast or Bangladesh. The wealthier areas of the globe are much more able to avoid the “race to the bottom” and to have the resources to represent themselves in the face of global organizations.
Regarding Third World products let me pose a question or two. The introduction is this.
My youngest son is an accountant and once while at home over the holidays during his college days I perused one of this accounting books concerning Business Law. There was a real life case example of an incident some years ago that was spelled out in this book.
Containers of Third World sweat shop shirts arrived in the U.S. port. These shirts were manufactured with no neck labels. The containers were sold to various companies who sewed in their own tags and then resold to various retailers. (Part of the story was that several containers were stolen.)
Some of those shirts end up with what we will call the ABC brand tag and sold at Wal Mart and the like for 15 bucks.
Some of those shirts end up with what we will call a “flippity” XYZ name tag and sold at higher end boutique stores for 150 bucks.
Same shirts made in the same sweat shop factory in the same impoverished country. So the questions are; why is the boutique store not vilified in the same manner as Wal Mart?
Is this boutique store not guilty of the same thing that WM is being accused of?
Ironic question I heard today, given NSA voter rights etc., Why are we trying so hard to push democracy on others while at the same time trying to deny it to ourselves?
Come to think of it, @cigroller, when the vast majority of Americans were subsistance farmers who eked out a living with the opportunity to get ahead a few dollars in good years they were “relatively” better off than the poor today. And farmers and fishermen in the 3d world today are likely enjoying a better life than those who work in the factories.
Those that were fine before we tried to modernize them are a very small part of the poor peasants of the world. Most, including south African nations, far eastern nations, some of the former Soviet nations, and the mideastern nations, are struggling due to internal conflicts, international conflicts, and corrupt governments. They’re not suffering because we tried to modernize them. We were not a factor in their suffering.
I offer as two illustrations Korea, the north of which is under corruption and the south of which is capitalist, and Viet Nam, who many years ago was under communist rule and then internal conflict, and is now emerging as a more open and capitalist culture. China is another. The majority of China is still an impoverished peasant population, whereas that portion of China that is turning to capitalism is faring far better. Perhaps the clearest illustration is Korea. The dramatic contrast between the north and the south is an excellent illustration of the benefits of free market capitalism. And yes, I recognize that there are other forces at work too. But you have to admit, in these nations capitalism has not caused poverty and hunger, but rather exactly t he opposite.
ok4450, the title of the thread is “speaking of wal mart…” No one who pays any attention to the uglier underside of the global economy worries about WM exclusively. Actually, people who do pay attention to it are more likely to focus on the activities of things like the World Bank and IMF. But plenty of large companies have taken plenty of heat, especially in garment and electronics industries.
I obviously wouldn’t know anything about the specific “boutique” shop(s) that were involved in that case study, but small shops do not command any great power to shape global supply chains. But big ones do - the WalMarts, Nikes, GAPs, Apples, etc. Incidentally, what you describe is one of the things that makes it hard to buy car parts anymore. I won’t buy the “big box” AP store house brands because I don’t trust them. But obviously sometimes those things are identical to the ones in the box that say “MOOG” or whatever. How often are we merely buying “branding” at the AP store?
I will say again, it’s not because of people behaving badly. Most of the people actually involved in the operations that involve sweatshop type labor think economic globalization is the answer to the world’s problems. They think things like “well, we’re bringing jobs and industry to the ‘stone age’” and rescuing people from lives that are nasty, brutish, and short - full of poverty, disease and misery.
But as Rod Knox implies (as I did above) most of those people you catch on the “feed the children” ads were perfectly able to feed their children until the decision was made to turn their farm plots into “export processing zones” to generate cash flow. Well, if cash flow was that important, and life was so precarious without global corporate capitalism, then one has to wonder how humans made it through the first 200,000 years on the planet. It wasn’t by global capitalism. And most of the time it also wasn’t even all that difficult.
Incidentally, levels of self-reported happiness in the U.S. peaked in the 1950s sometime. For all of the increasing amount of cheap crap we all all have, no one is getting any happier. I suppose that’s not much of a surprise though, as things like worker productivity, corporate profits, and executive pay levels increase while average wages remain stagnant. Worker productivity has climbed steadily - yet real hourly wages have been about flat since about 1970.
I find the whole “benevolence” argument for shutting down sweatshops tiresome (if I’m in a good mood); offensive (if I’m not).
Third-world people aren’t necessarily any stupider than you or I (less educated, perhaps)…they rationally choose whatever is perceived as being in their best interest. If a person seeks employment in a sweat shop, it’s because that choice–lousy as it may be–is the “least lousy option” available to that person.
An economic book I read (maybe one of the “Freakonomics” series…or not…I can’t recall) looked at outcomes after a child-labor sweatshop was closed. By and large, children fared even worse outcomes in the aftermath of the closure; a distressingly large minority took up child prostitution.
Speaking of which…another tiresome/offensive “third-party work action” is when bourgeois college-educated females (95% of whom I’ll flat-out guarantee have never had to come up with money, tomorrow, to avoid eviction, afford medicine or bail out a loved one) do unwanted activist work “for the good of…” here.
Third-party work actions, as a whole, make the “haves” feel better…generally irrespective of the effect on the (putative) beneficiaries.
Well, I’ll just say that my wife worked for quite a while at several Wal Mart stores and she wasn’t disgruntled with the pay or the benefits. Her only complaint was having to listen to office politics generated by women in a room who would rather gossip than work; and that’s the reason she finally left WM.
The wife is a “get it done” person and just tired of the slackers.
@SameMoutainBike
I hear what you say about English; but all communication and all languages have nuances and subtleties and contradictions as language has a base that shifts with time. What is correct now was not correct years back as common usage changes many things. If it’s not your common use, It may make little sense. So, it’s not unusual for many of us who speak English to feel that way. But, other countries have a language that I’m sure promotes those feelings too.
My way out is simple. My wife needed help in math and science, I needed help in English and history, so it seemed natural for a math major with a minor in biology to marry an English teacher.
"I find the whole “benevolence” argument for shutting down sweatshops tiresome (if I’m in a good mood); offensive (if I’m not).
Third-world people aren’t necessarily any stupider than you or I (less educated, perhaps)…they rationally choose whatever is perceived as being in their best interest. If a person seeks employment in a sweat shop, it’s because that choice–lousy as it may be–is the “least lousy option” available to that person. "
Seriously? First of all - no one has said a thing about benevolence.
Secondly, get a freaking clue. “Choices?”
My son brought his high school “Economics” syllabus home from school this year as I was supposed to sign it. After looking at a syllabus full of “choices this” and “choices that” I really had no choice but to write on the margin something like “Will we be learning anything at all about how the choices that various people have become available?”
Frankly, if your whole understanding of global political economy amounts to individual persons making choices, then just say nothing at all until you actually do know something about how the “choices” get shaped. Mind boggling. Have you ever even heard of a structural adjustment program? An export processing zone?
Every time I offer my kids the “choice” of brussel sprouts or broccoli, they choose the broccoli. Therefore, its quite obvious that anytime they are eating broccoli, it was a matter of their own personal choice. Pull your head out of the impossibly small and miniscule keyhole through which you are viewing the world.
Sorry. This is why I promised myself at the beginning that I would ignore this thread. I am weak.