Conservatives run around singing the praises of Wal-Mart,
proclaiming it an American success story. None other than
Dick Cheney calls the Beast of Bentonville his favorite
company. But what I love about Wal-Mart is the way the
company highlights the phoniness of two centerpieces of the
conservative movement’s sloganeering propaganda: the so-
called “free market” and “local control.”
In the mythical world of the free market—for which Wal-Mart
supposedly serves as a shining example—prices for goods and
labor should rise and fall based on the magic of
the “invisible hand” of market supply and demand. In the
nirvana of the so-called free market, workers can sell
themselves for whatever the market can bear.
So let me introduce you to a place called China. Wal-Mart—in
its never-ending quest to promote its heartland, Arkansan
family values—is a willing customer of the Chinese labor
system, where people work 12- to 18-hour days, earn meager
wages and have no days of rest—all for the honor of laboring
inside factories full of chemical toxins and hazardous
machines, leading to sickness and death at the highest rates
in world history. Wal-Mart says its business with China is
just a virtue of the free market.
Putting aside the morality of forcing people to work in
slave-like conditions, the so-called free market does not
exist in China when it comes to wages. China artificially
suppresses wages by anywhere from 47 to 85 percent below
what they should be,according to the AFL-CIO's complaint
about China's labor policies filed with the United States
Trade Representative last year. With Wal-Mart as its willing
customer, an authoritarian regime ruthlessly warps the
market for wages by enforcing a system that controls where
people can work and imprisons and tortures people who
attempt to organize real unions or strike. Maybe the rock-
bottom labor costs are really behind Wal-Mart’s
slogan “always low prices,” but the company is certainly not
an example of how to win in a free market economy.
It’s easy to see why Wal-Mart and its conservative defenders
discard ideology: money. By ignoring free market principles,
the left-wing Harvard Business School estimates that Wal-
Mart reduces its procurement costs by 10-20 percent,
primarily by taking advantage of the artificially suppressed
labor market in China. One can’t help note the delicious
irony that Wal-Mart’s “free market” leadership is powered by
an authoritarian regime that still refers to itself as
communist.
Back at home, Wal-Mart’s free market mantra stops at the
water’s edge of the public till. By one estimate, Wal-Mart
has pulled in $1.5 billion dollars in taxpayer funded
subsidies (see
www.walmartwatch.com) . And that's at the low
end, because subsidies are sometimes hard to track based on
the lack of public reporting requirements. Wal-Mart is happy
to cash in on government largess like property tax
abatements, infrastructure support, free land and just
straight-out cold cash—all of which are the antithesis
of “free market” ideology.
Here’s a way to get rich, if you could collect the dough:
How many of you wish you had a dollar every time you heard
some conservative rant first about the evils of the federal
government and, then, call for denuding the federal
government and handing more control over decision making to
local communities? We’d all be rich, no? Well, an odd thing
has happened. Conservatives appear to be against local
control.
Conservatives and their allies in the press have been bent
out of shape over recent campaigns to keep Wal-Mart from
opening stores. These campaigns were spearheaded by
community groups nationwide from Los Angeles to Chicago to
New York. Recently, The Economist , the international organ
for the so-called “free market,” railed against the
opposition to Wal-Mart’s entry into the New York City area.
Writing in its April 2nd edition about local legislation
aimed at requiring standards for workers’ pay and health
care, the magazine opined that, “Municipal socialism may
seem an odd strategy for the world’s capital of capitalism
to embrace.”
Oh, I get it: Local control is only a lofty principle when
the goal is to destroy the government’s ability to implement
basic community values like fairness, equality and justice.
But when people rise up to challenge the idea that a
corporation shouldn’t do what it chooses with local
community resources like workers, water, air and soil—oh my
God, we’re teetering on the brink of rampant radicalism and
a titanic battle between socialism and the free market.
Truth is, Wal-Mart could not survive in a real free market:
It would, for example, have to pay Chinese workers more
(which would ruin its low-wage business model) and spurn any
offers of government subsidies. Indeed, it’s fitting that
Wal-Mart, the business model fawned over by free-marketeers,
exposes the so-called “free market” as a lie, no more than a
crude—albeit effective—marketing phrase. By offering the
seductive promise of prosperity through something “free,”
we’re told we have to hand over control of our communities
to some mystical “market” force. But that’s just an illusion
conjured up to hide from us real-life actors who exploit the
sweat of our brows, deplete our natural resources to make
huge profits and take handouts funded by our hard-earned
incomes.
Ironically, Wal-Mart’s behavior does have one redeeming
factor. By puncturing the Wal-Mart-generated myths that it
is good for America, by showing that its low-prices come
with a heavy cost, and by revealing how the company is a
leech on communities, we may begin to pull back the curtain
hiding the true nature of the so-called “free market.”
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Jonathan Tasini is president of the Economic Future Group
and writes his "Working In America" columns for TomPaine.com
on an occasional basis.
http://www.tompaine.com/articles/walmarts_free_market_fallacy.php?datei…