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A Free Market Defense of Walmart? Not so Fast.

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http://anarchobjectivist.wordpress.com/2014/05/21/a-free-market-defense-of-walmart-not-so-fast/

 

"In his November 27, 2013 Forbes article, Doug Altner asks the question, “Why do 1.4 million Americans work at walmart?” His answer, presumed to be along free market lines, is that walmart and its employees voluntarily trade value for value to mutual benefit and satisfaction."

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http://anarchobjectivist.wordpress.com/2014/05/21/a-free-market-defense-of-walmart-not-so-fast/

 

"In his November 27, 2013 Forbes article, Doug Altner asks the question, “Why do 1.4 million Americans work at walmart?” His answer, presumed to be along free market lines, is that walmart and its employees voluntarily trade value for value to mutual benefit and satisfaction."

The US is a democracy. All the laws are passed by elected representatives. But feel free to ignore that fact, and continue blaming lobbyists.

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The US is a democracy. All the laws are passed by elected representatives. But feel free to ignore that fact, and continue blaming lobbyists.

Actually you can see from this study: http://prq.sagepub.com/content/66/3/585 that only the wealthy are represented in congress.

 

"I examine Senate responsiveness for the 107th through 111th Congresses. The results show consistent responsiveness toward upper income constituents."

 

Further:

 

"The average American doesn't realize how much of the laws are written by lobbyists" to protect incumbent interests, Google CEO Eric Schmidt told Atlantic editor James Bennet at the Washington Ideas Forum. "It's shocking how the system actually works."

 

www.theatlantic.com/technology/archive/2010/10/googles-ceo-the-laws-are-written-by-lobbyists/63908/

 

"In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)"

 

http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/?_php=true&_type=blogs&_r=0

 

 

"In an example a week and a half ago, the House passed a measure that would roll back a portion of the 2010 financial reforms known as Dodd-Frank. And reports from and revealed that language in the final legislation was nearly identical to language suggested by lobbyists.

It's been a long-accepted truth in Washington that lobbyists write the actual laws,"

 

http://www.npr.org/blogs/itsallpolitics/2013/11/11/243973620/when-lobbyists-literally-write-the-bill

 

 

Repost from a month ago?

 

I wrote it about a month ago, but never posted it here. You may have seen it on reddit, or objectivistliving?

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JamesShrugged,

 

You're making Nicky's point. Even if the lobbyist save the representative the time and effort of writing a particular bill, in the end, who passes it? Petitioning congress is a way of getting involved in shaping policy.

Edited by dream_weaver

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I wrote it about a month ago, but never posted it here. You may have seen it on reddit, or objectivistliving?

Huh?! You posted it on May 21st and I deleted it because it was yet another repetitive commie-anarchist tirade. Did you forget?

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Actually, you can see from this study: http://en.wikipedia.org/wiki/Elections_in_the_United_States that everyone gets exactly the same amount of say in the matter of who represents them.

Okay, you won the semantics game. The question that matters is if the people you select to represent you are competent, ethical, and properly propose laws. Yeah, we all get equal say. So what? That doesn't then mean somehow lawmakers are immune from being unethical, i.e. colluding with businesses in making improper laws. I'm not saying James is right, but you didn't address the issue at hand.

Edited by Eiuol

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James would have us believe the country has minimum wage laws because companies like Walmart pushes for them. That's really all one needs to know about this post of James and all his similar anti-business posts. They all reveal the same fundamental flaw where he steps mid-stream into the causal chain that results in today's laws and cannot see the primary culprits.

 

If you want to (plausibly) criticize Walmart for anything, do so for their use of eminent domain.

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James would have us believe the country has minimum wage laws because companies like Walmart pushes for them. That's really all one needs to know about this post of James and all his similar anti-business posts. They all reveal the same fundamental flaw where he steps mid-stream into the causal chain that results in today's laws and cannot see the primary culprits.

 

If you want to (plausibly) criticize Walmart for anything, do so for their use of eminent domain.

 

"James would have us believe the country has minimum wage laws because companies like Walmart pushes for them."

 

Its actually a matter of fact: http://money.cnn.com/2005/10/25/news/fortune500/walmart_wage/

 

"Wal-Mart CEO Lee Scott said he's urging Congress to consider raising the minimum wage"

 

http://online.wsj.com/news/articles/SB10001424052702304908304579563763405679116

 

""We are not opposed to minimum wage increase, unless its directed exclusively at us," said Wal-Mart U.S. President Bill Simon,"

 

"James and all his similar anti-business posts."

 

I'm actually against cronyism and the mixed economy, not business. EDIT: Im actually not primarily against cronyism, but for free markets.

 

"If you want to (plausibly) criticize Walmart for anything, do so for their use of eminent domain."

 

Did you read the article? Because I said this:

 

"The most direct of Walmart’s cronyism are two-fold. First, Walmart’s push for a raise in minimum wage to push competition out of business, since Walmart can afford to pay the higher minimum wage, but smaller competitors may not be able. Using legislation to destroy competition for customers, also destroys competition for employees and furthers the effect of labor supply inflation that allows Walmart to have the terms of employment it sets be accepted by the labor market. Secondly, the corporation has engaged in the abuse of eminent domain to misappropriate land from private owners by the force, which stops any resistance by a community to the abuses cited above."

Edited by JamesShrugged

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Since Walmart and its business model exist in the context of a mixed economy, and depends fundamentally on state interference into the economy on their behalf, or that, at the very least, give rise to a business model that could not exist unsubsidized

 

This is a totally ignorant statement. Walmart does not depend fundamentally on state interference. Walmart's business model is that of a discounter: low gross profit per good with massive inventory turnover. Discounters exist in many different industries and are the product of free markets. There is no logical relationship between the business model and coercion.

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Actually, you can see from this study: http://en.wikipedia.org/wiki/Elections_in_the_United_States that everyone gets exactly the same amount of say in the matter of who represents them.

So, the question is does the actual practice match up with the theory you posted?

 

No.

 

http://prq.sagepub.com/content/66/3/585.abstract

 

"Using data from the 2004 National Annenberg Election Survey, and multiple roll call votes, I examine Senate responsiveness for the 107th through 111th Congresses. The results show consistent responsiveness toward upper income constituents. Moreover, Republicans are more responsive than Democrats to middle-income constituents in the 109th Congress, and a case study of the 107th Senate reveals that responsiveness toward the wealthy increases once Democrats take control of the chamber."

 

here is more information and quotes from that study: http://www.rawstory.com/rs/2013/08/19/oligarchic-tendencies-study-finds-only-the-wealthy-get-represented-in-the-senate/

 

My question for you is why you appear to have a vested interest in the defense of a nations evils which result from its factual status as a  democratic mixed economy as if it were a free nation?

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This is a totally ignorant statement. Walmart does not depend fundamentally on state interference. Walmart's business model is that of a discounter: low gross profit per good with massive inventory turnover. Discounters exist in many different industries and are the product of free markets. There is no logical relationship between the business model and coercion.

How different would walmarts business model (their actually, current, existing right now in reality business model) be if they

 

* had to pay for the roads that are made by the government for the use of large military vehicles (amounts to a transportation subsidy) how would walmart have built the interstate highway system without taxation and eminent domain? the majority of citizens have no need for those kinds of roads)

* Couldnt use imminent domain to aquire property

* didnt have access to a cheap disposible, artificially inflated labor market created by government regulation

* couldnt use minimum wage legislation to push competitors out of business

* didnt have the healthcare of its labor force subsidize by government

 

Their efficiency as a discounter is a direct result of their ability to take advantage of government intervention into the economy. That in and of itself is not particularly objectionable, as all companies must do so to some degree. But the fact is that walmart is not a free market advocate. They actively advocate governmnet intervention into the economy so that they can exploit them.

Edited by JamesShrugged

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Okay, you won the semantics game.

What I wrote is an attempt to accurately describe reality, the only way one can accurately describe reality: by understanding and carefully weighing the meaning of each word used.

And yes, if I got it right, that means I "won the semantics game". Thank you for acknowledging that. That is, unless that's not what you meant, in which case you should look into the semantics of the word semantic, before using it.

Edited by Nicky

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How different would walmarts business model (their actually, current, existing right now in reality business model) be if they[...]

You may as well speculate how different the world as a whole would be if there was no government interference in the economy.

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How different would walmarts business model (there actually, current, existing right now in reality business model) be if they

 

* had to pay for the roads that are made by the government for the use of large military vehicles (amounts to a transportation subsidy) how would walmart have built the interstate highway system without taxation and eminent domain? the majority of citizens have no need for those kinds of roads)

 

Not very different at all. Walmart already pays far more in taxes than they'd ever have to pay for road use.

 

 

* Couldnt use imminent domain to aquire property

 

Eminent domain, if it has contributed to Walmart's success at all, is completely trivial.

 

 

* didnt have access to a cheap disposible, artificially inflated labor market created by government regulation

 

I don't know what 'disposable' labor is but you're right in stating that labor prices are artificially high. Labor would be cheaper without the government imposed price floor.

 

 

* couldnt use minimum wage legislation to push competitors out of business

 

It is true that as the minimum wage rises, the less efficient companies are put out of business. However, claiming that this is a driver of Walmart's success requires ignorance of the company's history and the history of discount retail- which is why your claims are ignorant. It's not the minimum wage but rather small retailers inability to match Walmart's efficiency and scale that makes them unable to compete. That is why the Walmart business model is so successful. By turning the inventory over at such a fantastic rate, the company can substantially undercut the prices of competitors. It's completely at odds with reality to claim that Walmart's success is due to minimum wage. On the contrary, the company has been substantially damaged by minimum wage.

 

 

* didnt have the healthcare of its labor force subsidize by government

 

Give me a break. Who do you think pays for government healthcare? And to attribute the company's success to the government takeover of health care is moronic. Again, forcing Walmart to provide healthcare and a specific wage to its employees whether or not there are other people willing to work for less is not good for Walmart.

 

 

their efficiency as a discounter is a direct result of their ability to take advantage of government intervention into the economy

 

Naming a bunch of ways that the government affects Walmart is not evidence that their efficiency is a result of the government. Walmart is successful because it sells products for low prices. It sells its products for low prices, not because it has greater access to cheap labor than other companies (it does not), but because it can spread its operating costs across millions of low gross profit transactions.

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Not very different at all. Walmart already pays far more in taxes than they'd ever have to pay for road use.

 

 

Eminent domain, if it has contributed to Walmart's success at all, is completely trivial.

 

 

I don't know what 'disposable' labor is but you're right in stating that labor prices are artificially high. Labor would be cheaper without the government imposed price floor.

 

 

It is true that as the minimum wage rises, the less efficient companies are put out of business. However, claiming that this is a driver of Walmart's success requires ignorance of the company's history and the history of discount retail- which is why your claims are ignorant. It's not the minimum wage but rather small retailers inability to match Walmart's efficiency and scale that makes them unable to compete. That is why the Walmart business model is so successful. By turning the inventory over at such a fantastic rate, the company can substantially undercut the prices of competitors. It's completely at odds with reality to claim that Walmart's success is due to minimum wage. On the contrary, the company has been substantially damaged by minimum wage.

 

 

Give me a break. Who do you think pays for government healthcare? And to attribute the company's success to the government takeover of health care is moronic. Again, forcing Walmart to provide healthcare and a specific wage to its employees whether or not there are other people willing to work for less is not good for Walmart.

 

 

Naming a bunch of ways that the government affects Walmart is not evidence that their efficiency is a result of the government. Walmart is successful because it sells products for low prices. It sells its products for low prices, not because it has greater access to cheap labor than other companies (it does not), but because it can spread its operating costs across millions of low gross profit transactions.

TL;DR: alleged defender of free market comes out in defense of mixed economy, claims regulation is trivial.

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 Like all corporations, Walmart is chartered by individual states. The 'charter' is a glorified license to practice bizness.

 

 States elect their congress and gub-nor by a democratic process. That i may or may not be satisfied with the results is therefore beside the point. For example, here in Gaw-ga,one is free to eleect offishuls who do or do not have sex with barnyard animals while on duty.

 

Likewise, the elected people may or may not choose to pass laws restrain either/both lobbyists and/or corporations. These laws may include open disclosure, registration and contact forms for lobbyists with restraints on gifts.

 

Big box proposals may or may not be rejected based upon merit--such as wage rate, full-time commitment, environment impact, and efficiency cost-benefit versus social benefit of small business.

 

My opinion is that those congress-persons who have sex with barnyard animals are also inclined to take bribes. And since Walmart can afford bigger bribes, they win hands down over Ma & Pa. But ultimately, in a democracy. right-ness resides with the majority--with due respect to individual rights, of course.

 

In this case, I maintain that said majority simply isn't aware of the power that they really have...

 

Now this leads to my second point, which concerns inevitability and natural law. To this end, yes, the mechanisms behind market forces are said to be natural. So yes, big does eat small, and bigness permits the spread of risk, the cheeper purchasing of goods to sell, and the ability to maintain lower profit.

 

But since we all know that, it would be as foolish to say , 'Hooray for market forces' in the same sense that we would pull for all viruses and bacteria just because we make cheese, wine, and certain antibiotics from them.

 

Likewise, we don't blithely ascribe airplane crashes to gravity; rather, why were we unable to better counteract gravitational pull?

 

In other words, being human means having the capacity to use natural forces to our advantage, To this end, yes, the discreet use of market forces is beneficial. This we ascribe under the rubric of 'capitalism'. Offering carte blance, however, is to hopelessly confuse naturalism with moral obligation.

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TL;DR: alleged defender of free market comes out in defense of mixed economy, claims regulation is trivial.

Did you expect this insult to the reader's intelligence to help your argument? Or is its only purpose to insult?

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"James would have us believe the country has minimum wage laws because companies like Walmart pushes for them."

 

Its actually a matter of fact: http://money.cnn.com/2005/10/25/news/fortune500/walmart_wage/

 

"Wal-Mart CEO Lee Scott said he's urging Congress to consider raising the minimum wage"

If the American voter was not sympathetic to a minimum wage, Walmart could rant all it wanted and pay whomever it wanted and nothing would happen. On the other hand, when businesses find themselves in the crazy environment we have today: caused primarily by voters, and only secondarily by politicians and businesses, they react to that regulatory environment.

You will find hundreds of examples of businesses that appear to be championing things they ought to be fighting against.

Most of the time, if you delve into the history of this you will see that the particular business or other like it did put up a fight. However, when voters seem adamant about controlling businesses in some area, the businesses eventually taker a different tack. It makes sense to mold the inevitable rather than being a passive recipient of voter control.

For instance, power companies may fight some type of EPA regulation because it requires them to spend money on new infrastructure. However, if the pressure from voters increases beyond a point, business faces two pressures. Firstly, businesses are basically a bunch of people and if voters overwhelmingly think some such control is good, many in the business start to do so too. The CEO's wife asks him why he's polluting the world. Secondly, the business realizes that they're going to be forced to do something, and that it makes more sense to mold exactly what they are forced to do. They want to make sure any additional costs being imposed on them by voters is also imposed on close competitors, or borne by those voters. And, once the regulations are in place and they have spent the money, they don;t want voters to suddenly change their minds and relax the rules for competitors and new entrants.

 

The voters drive this whole process.

 

Yes, businesses do start some such regulatory processes themselves, but this is not the norm. When they do, they are no champions of free markets, but they're essentially seeing a corrupt system, made corrupt by voters,m and trying to take advantage of it. All the hankering of the bad bankers would not have created a Federal reserve if the voting public did not want the government to protect them by depriving others of rights.

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How different would walmarts business model (their actually, current, existing right now in reality business model) be if they

 

* had to pay for the roads that are made by the government for the use of large military vehicles (amounts to a transportation subsidy) how would walmart have built the interstate highway system without taxation and eminent domain? the majority of citizens have no need for those kinds of roads)

* Couldnt use imminent domain to aquire property

* didnt have access to a cheap disposible, artificially inflated labor market created by government regulation

* couldnt use minimum wage legislation to push competitors out of business

* didnt have the healthcare of its labor force subsidize by government

 

Their efficiency as a discounter is a direct result of their ability to take advantage of government intervention into the economy. That in and of itself is not particularly objectionable, as all companies must do so to some degree. But the fact is that walmart is not a free market advocate. They actively advocate governmnet intervention into the economy so that they can exploit them.

 

Even if you accept that premise, you are still ignoring that Walt got Wal-Mart to where it is at before all of this.  If you have ever studied supply chain management Wal-Mart was a leader in having all members in their supply chain coordinate so everyone could offer the lowest price possible and still proffit.  I use to work in the food business (and still in Transportation) and many were very dismayed when the kids took over and abandoned dad's model.

 

The only question is "If" Wal-Mart does that today, and whether "if" it is justified to survive in a business climate it did not create but still wants to live in. 

 

But the fact is Wal-Mart got there the old fashion way - Good management and creating supply chain management practices before they were a fad let alone standard business.

 

As for the original quote - 1.4 million people work at Wal-Mart because they used their free will as consenting adults and agreed to work there.  They can quit any time they change their mind.  That is what adults do.  I've done any number of times. Game over and tip your waitress on the way out. 

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Even if you accept that premise, you are still ignoring that Walt got Wal-Mart to where it is at before all of this.  If you have ever studied supply chain management Wal-Mart was a leader in having all members in their supply chain coordinate so everyone could offer the lowest price possible and still proffit.  I use to work in the food business (and still in Transportation) and many were very dismayed when the kids took over and abandoned dad's model.

Even today, Walmart's two greatest strengths are size and superb logistics. The size gives them the leverage to get low-price merchandise. For instance, Walmart might buy another chain and find that that chain is buying low-price adult jeans for $12 each and find it impossible to get anything lower; but, Walmart can talk to the supplier and say "instead of 100,000 jeans, what price will you give us if we buy a million". Suddenly the jeans cost $10 each and the bulk of the lower cost is passed on to the Walmart customer. On logistics, Walmart has pioneered all sorts of techniques and technology, from RFID to cross-docking.

James's notion that Walmart pushed out its competitors because of eminent domain and minimum wage laws is just fiction. James clearly has little understanding of Walmart's business, only about these bad things they do. As for roads and healthcare, again he simply splashes down mid-stream. These things help and hurt Walmart, but the key is how they help or hurt relative to the competition. Again, due to scale, Walmart actually has a lower per-capita and per $-of-sales usage of all these services, just as it has lower unit-costs across the board.

These protests against business put the cart before the horse. The Occupy Wall Street crowd sincerely think business causes all sorts of problems. The irony is that they themselves are the ones that cause it. Specifically, people like them, who complained and protested against some other business in a previous generation, thus empowering politicians and increasingly making businesses pay to play.

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Actually, you can see from this study: http://en.wikipedia.org/wiki/Elections_in_the_United_States that everyone gets exactly the same amount of say in the matter of who represents them.

What you did here is provided an argument based on taking "having a say" as therefore having responsibility and/or tacit agreement over all actions taken by a congressmen. It is an argument technique primarily of deceptive rhetoric, i.e. "let me point out a basic fact that most people should know. As my readers know, James is too stupid to know this". If you aren't being deceptive, then you have clearly not thought this through very much. Your winning the semantics just entirely overlooks that there is a further and worthwhile point, namely, to what extent should Wal-Mart be seen as an example of a moral business?

 

James says the bad outweighs the good. sNerd says the good outweighs the bad. Rational discussion is possible. Nicky says "Everyone has the same amount of say, QED" . . . What? Not possible to have rational discussion with that. It's winning a semantics game because it's basically pulling "well, the dictionary says..." trick. Most people don't like that.

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Louie, I don't think you know how to read. There's no way someone with the ability to read could've read this:

The US is a democracy. All the laws are passed by elected representatives. But feel free to ignore that fact, and continue blaming lobbyists.

Actually, you can see from this study: http://en.wikipedia.org/wiki/Elections_in_the_United_States that everyone gets exactly the same amount of say in the matter of who represents them.

and then declare that it says this:

What you did here is provided an argument based on taking "having a say" as therefore having responsibility and/or tacit agreement over all actions taken by a congressmen.

It's just not possible.

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