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skepcindy

Wal-Mart

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Just finished reading "The Wal-Mart Effect" by Fishman. It's remarkably fair, and either a pro or con zealot would take issue with it. The tone made me feel like I'd be a more effect person overall if I could be a little more evenhanded with my opinions.

He talks about the beginnings of Wal-Mart, and reviews the latest research papers on the subject. The results were mixed and barely significant, which means it's real research. E.g. opening a Wal Mart in an area creates and destroys hundreds of jobs, and probably ends up a bit positive. (Study suggests +50) Also, Wal-Mart really does lower prices all things considered, and really does lower the quality of products from companies who do business with them.

He discusses the big negatives, the labor issues, the sweat shop issues, the environmental issues, etc. In every case, law and company policy aren't really the problem. The problem is that you have relentless downward pressure on the prices, which rewards anyone who cheats on policy or the law at any level in the Wal Mart chain, at least until they get caught.

The author's main point was an interesting one. He argued that the company has gotten so big that it can dictate prices to its suppliers. Which kind of breaks free market capitalism. That no company should have that much say in what other businesses can do, and how the American economy is going to move. I have to agree, but I really don't know what the solution is. I do wonder what would happen if we taxed companies like we taxed income, the bigger the profits, the bigger the percentage. I wonder if we'd end up with small businesses and a more agile (if less efficient) economy.

The end of the book had detailed interviews with factory workers whose jobs had gone overseas. It underscored Chris's point, that we need to redirect resources towards creating jobs appropriate for former factory workers. We thought a bit about what that was. If college were free, what percentage of former US factory workers would want to go? Or on average did they dislike academics in highschool, and would prefer a job that takes physical skill and produces tangible products?
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