Do we need a national law outlawing Mega Retail Centers from small communities?

Since its inception as the largest corporation in the world, Wal-Mart has been the source of much controversy. Particularly, Wal-Mart’s business practices have put the company under public scrutiny. Critics of Wal-Mart allege that much of the company's financial success is due to business practices that are harmful to the local economy, the employees (sweatshops overseas), and the environment. Therefore Wal-Mart, like Carthage, must be destroyed. I am suspicious of the reasons for this controversy, and I believe that Wal-Mart has fallen into Wood’s Law – that someone will eventually call to curb or abolish any market innovation that benefits the poor. By now you may be asking how much Wal-Mart has paid me. Please, allow me to explain.

In a capitalist economy, markets require that businesses either compete or go out of business. That may seem harsh, but it is not necessarily a bad thing. In fact, failure can be part of the trial-and-error method by which consumers and business owners learn vital lessons about what works and what does not. If you are a critic of Wal-Mart, you may be screaming, "Tell that to the hundreds of business owners that went under because of competition from Wal-Mart!" I hear you. I understand that some might be suffering from "the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of [widgets] that he is flooding the domestic market with it at an incredibly low price." Coming from a small town and being a supporter of the local economy, I hate to see small businesses go under, but Wal-Mart doesn’t deserve all the blame. That trend started years ago with strip malls, K-Marts, Sears, the whole suburban sprawl and all the other discounters that preceded Wal-Mart. It is caused by our preference (in the case of the poor, it’s hardly a preference) to buy based on price, rather than quality. In this context, criticizing Wal-Mart seems contradictory, since the consumers, you and I, direct the buying power. Contrary to popular thinking, Wal-Mart does not put small businesses out of business: customers do by choosing to shop at a store that does a better job of supplying their wants than do their established competitors.

Consider the origins of the free market, or capitalism (for my purposes the two terms are interchangeable). Most of Wal-Mart’s business practices are justified by the concept of the free market. In the United States, we call our system of trade collectively "capitalism." All forms of trade in a capitalist economy are driven by incentives for both (or all) parties. This incentive of personal gain has deep roots in human nature. Arguably, the very foundation of capitalism can be credited to the driving force of self-interest in human nature. Capitalism is, after all, an economic system supporting the pursuit of profit and personal interests. In the free-market, Wal-Mart’s practices, like turning a blind eye to the sweatshops of their contractors, is acceptable.

Nowhere is it written in any principles of the free market (or capitalism) that a business has an obligation to make sure everyone is satisfied. Since the concept of capitalism has limited analytical value, it is harder yet to define obligations or values. Capitalism certainly wasn’t delivered to the people from a mountain top. No one said, "wouldn’t it be cool to have a behemoth of an industrial economy with a "survival of the fittest" ethos, where 90% of the world’s wealth is concentrated in the hands of less than 10% of the people." Capitalism doesn’t entail that the highest form of the pursuit of happiness is to settle down with a nine-to-five job, then come home to suburbia, with a couple of cars in the garage and slew of stupid things sold to us by this behemoth that few of us have ever taken the time to understand. People didn’t get together and decide to do this and call it capitalism. It just emerged out of the social constructs of natural human development. Capitalism was and is the inevitable adaptation of human behavior.

The point here is that Wal-Mart has to be beneficial in some way, to survive as a business. Wal-Mart has to be beneficial to a large population; otherwise its financial success simply would not be possible. In the words of the economist and social philosopher Ludwig Von Mises, "The profit system makes those men prosper who have succeeded in filling the wants of the people in the best possible and cheapest way. Wealth can be acquired only by serving the consumers. The capitalists lose their funds as soon as they fail to invest them in those lines in which they satisfy best the demands of the public. In a daily repeated plebiscite, in which every penny gives a right to vote, the consumers determine who should own and run the plants, shops and farms." Next time someone criticizes Wal-Mart for economic reasons, ask them if they have bought anything at Wal-Mart or tell them to recall the story about the people who advise

Your argument is flawed in a number of ways. Consider:

1.) That Wal-Mart moves in and destroys local businesses may be true, but to say that they give little back in the way of taxes is simply misleading. What about local sales taxes? I know that not everywhere has them, or even state sales taxes (Oregon being an example), but the multimillion operation that your average Wal-Mart Super Center is pays a significant amount of other local taxes, like those on the property upon which it resides or from the utilities that it uses. You also fail to note that if Wal-Mart doesn't pay much in the way of local taxes, then those poor, widdle, defenseless local businesses that your group seems to champion wouldn't pay much either, unless the smaller Mom and Pop stores are being taxed unfairly at a higher rate by virtue of them not being a big box store, which is unconstitutional.

2.) Employees. Like any business, Wal-Mart typically draws their employees from the community, who then spend their paycheck in the local community. Hardly harmful to the local community, and it has the same effect as employees hired by the small businesses, who do the same thing.

3.) There's also something to be said about the expansion of federal power. Wouldn't it be better to have local officials, who are much more accountable to and more representative of the people who elected them, determine which business is able to be built, than some bureaucrat in Washington who was probably appointed by some politician who may not represent local interests?

I would have to say, then, that Wal-Marts have a overall neutral effect on the economy of the community in which they are located.

I'd note that when you make an argument based on emotion and conscience without considering economics and calm-headed reason, then you are much more susceptible to histrionics and manipulation by demagogues.

Cheers!

©2010 SinisterMatt. All Rights Reserved.

No. Perhaps a national law affirming the rights of individual communities to decide, but no National law on this. It should be the right of any community to decide what type of stores it wants in it's community... So, maybe Town A doesn't have a Wal Mart, or a Liquor Store, and Town B has both, but doesn't have Gun shops. America works best when local governments make the laws, because local citizens can effect local governments. (because of the small, democratic scale)

The private industry a community chooses, should represent the moral and ethical judgement of the individuals living in that community. Not necessarily a National-Ethic. (what I've always believed to be a myth)

The little mom and pop stores are out dated.

The selection is poor or non existent and the prices are to high because the little stores can't deal in high volume.

But you know the mom and pop stores could buy stock in Walmart.

Some of you have never walked 5-10 miles within a 1 mile radius to go shopping all over the neighborhood looking for everything you need.

No national or state laws to regulate mega retail centers. This should be left to the towns and cities themselves. If a town doesn't want a walmart, it can pass an ordinance banning it, if it does, it can invite one to set up shop.

Hell no.

Let Walmarts destroy them. Yeah, it sucks for the local business owners. But we consumers benefit greatly.

What makes you think Wal-Mart doesn't give back in taxes?

If you ask me, Wal-Marts have been the greatest Anti-Poverty program ever created, because they allow poor people to get so much value for their money.

By the way, I rarely shop at Wal-Marts, because I just hate the shopping experience. It's always a freaking zoo in there and everything is dirty. I much prefer paying a bit more and going to Target.

I think so, where I live a ton a small businesses have popped up over a few years and now Wal-greens has moved in and Wal-Mart is coming to crash the party, they actually demolished a middle school to make room for wal mart

Encouraging (without law or regulation) local small businesses to succeed and discouraging retail homogeny and urban sprawl should be viewed as good ideas by everyone. Sucks that it gets the troll treatment....

The only thing keeping those centers there are the citizens.

So no, if the community wants the center gone, they'll have to exercise enough self control not to shop there.

That decision should rest with the community, many have resisted their invasion.