Abandon Text!

W. H. Auden once said: "Poems are not finished; they are abandoned." I have been abandoning writing projects for many years, since only the pressure of deadline and high expectations ever got me to finish, or even start, anything of merit. This blog is an attempt to create a more consistent, self-directed writing habit. Hopefully a direction and voice will emerge.

Tuesday, January 16, 2007

The Wal-Mart Effect, noch einmal

I finally finished reading Charles Fishman's The Wal-Mart Effect, about three months after starting. I would definitely recommend it to most anyone, though its thoroughness might encourage some to go for an abridgement.

Occasionally I've seen reviewers refer to this book as a "Wal-Mart expose," which feels a little too tilted to the anti-Wal-Mart side to be fair. The book does take an awfully critical view of some of Wal-Mart's practices, sometimes scathingly so. But it doesn't delve into those issues until it's spent at least the first half of the book trying to understand where Wal-Mart came from and how it really operates. The book is absolutely fair in extolling the virtues of Wal-Mart's culture and its stated mission of thrift: "Always low prices." If anything, Wal-Mart has become such a behemoth precisely because it has been scrupulously true to its mission, never losing focus on cutting costs. Wal-Mart is not a hugely profitable business; every efficiency it wrings out of the supply chain is dutifully passed on to the consumer in the form of lower prices. In that sense, Wal-Mart comes across less as an icon of corporate greed than as a symbol of misplaced values.

Nor was Fishman extreme in his prescriptions of what ought to be done about Wal-Mart. He did not propose restricting what Wal-Mart could do. He did not propose stopping Wal-Mart from setting up new stores, or pricing as aggressively as it does. What he does call for is more information. He points out how many key economic indicators related to consumer spending and inflation now need an asterisk: "Not including Wal-Mart sales." When a single company's activity can push the entire economy fifteen points up or down, don't you think we deserve to know a little more about them? Fishman is ruthless in pointing out how the culture of secrecy at Wal-Mart keeps people from properly understanding the effects Wal-Mart has, and how downright duplicitous the company was in trying to thwart economic studies, and then totally misconstruing them when they were finally published. (I suspect that Fishman was venting his own journalistic frustrations at the lack of data and, even more so, the lack of people brave enough to go on the record about Wal-Mart.)

So, just for the record, what are those effects?:
  • Wal-Mart absolutely and categorically lowers prices, not just in its own stores but in the entire economy.
  • Wal-Mart also lowers quality, as constant price pressures force manufacturers to design quality and features out of their products in order to arrive at a lower price
  • Wal-Mart does not destroy the total number of jobs, though it does certainly steal lots of retailing jobs from other local vendors
  • Wal-Mart does send manufacturing jobs overseas, and not just through indirect market forces. The book is rife with tales of Wal-Mart explicitly telling vendors they must move their manufacturing overseas or lose Wal-Mart's business.
  • Wal-Mart does force other companies out of business. (Whether that is necessarily bad is open to argument. Competition does force bad companies out of the game, and forces others to get busy.)
  • Wal-Mart does not always win in every market. Some companies, whose core differentiator is quality rather than price, decide that "always low prices" is anathama to their business models, and do quite well without Wal-Mart. Fishman cites Snapper and Starbucks as examples.
  • Wal-Mart has no soul. It seems like a curious thing to say, but Fishman has a telling comparison of Wal-Mart to Southwest Airlines, another category-killer of a company with low prices and no-frills experience. Southwest has a sense of humor; Wal-Mart has none.

What I found most appealing about Fishman's study was his faith in the power of the consumers. He recognizes the fundamental truth: Wal-Mart gets its power from us, the people who shop there. We are responsible for the economic, social, and environmental consequences of everyday low prices. And Fishman's prescription of more information from Wal-Mart is geared toward trying to persuade the consumer that its a bad deal. "I don't think people would dress their kids in $5 shirts if they knew how the people who made them were treated," he says. He also generously holds out the hope that Wal-Mart could be a power for great good, if it used its buying power to establish better environmental and labor practices in the third world. But it's a slim hope. He recognizes how terribly difficult it is to change a culture -- Wal-Mart's, or our own. His final thesis: people shop at Wal-Mart because thrift is a distinctly American virtue . . . and they will only stop shopping at Wal-Mart when they begin to perceive it as a vice.

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