Wal-Mart Derangement Syndrome

by Liberty and Power

One of my interests these days is defending Wal-Mart against the misguided barbs of its critics. In the last year, I've participated in two different public forums on Wal-Mart, one defending putting a Supercenter in the next town over and the other as a "responder" to the new anti-Wal-Mart documentary "The High Cost of Low Price." I have posted my remarks on the latter on my website. My apologies for some of the local references there, but the audience was leftist students and local community members.

When I did that forum, however, I wish I'd had access to this paper (PDF) by Jason Furman. (Hat tip to Don Luskin at the Krugman Truth Squad.) Some of this was reported on in a Washington Post op-ed, but the paper has tons more good stuff in it. One item not noted in the op-ed is this:

Wal-Mart is relatively unusual in that it offers health insurance both to full- and part-time employees. By comparison, only 60 percent of firms economywide offer health benefits and only 17 percent of firms offer health benefits to part-time workers. Target, for example, does not offer benefits to people working less than 20 hours per week. Wal-Mart, however, has longer waiting periods for eligibility for benefits than many other firms, 6 months for full-time workers and 24 months for part-time workers.

It never ceases to amaze me how many distortions people have created around Wal-Mart, as well as the level of sheer fear it creates among certain folks, both right and left. Perhaps, much like the BDS ("Bush Derangement Syndrome") coined by Charles Krauthammer, we need a WMDS for those who seem to froth at the mouth at the mere mention of Wal-Mart. If so, let me take credit for first coining "Wal-Mart Derangement Syndrome" as the acute onset of paranoia, irrationality, and/or economic ignorance in otherwise normal people in reaction to any one or more of the policies, the practices, the prices, the products, the aesthetics, if not the very existence, of Wal-Mart.

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William J. Stepp - 12/30/2005

Just for the record, I've read Chandler. The fact that transportation and other infrastructure that retailers (and everyone else) depended on was subsidized is irrelevant. Don't forget that Wal-Mart was highly profitable from the getgo, and therefore paid lots of taxes.

The libertarian solution is to privatize the infrastructure and charge Wal-Mart and its vendors and customers for using it.

Your point about Wal-Mart's innovations (nicely summarized by William Lewis in his book on productivity) being irrelevant in a world of private infrastructure is just plain wrong and you point to no evidence or logic to support it.

Even if Wal-Mart and Tyson lobbied for an airport on stolen land, if the airport were private and had been built on private land, they would still be profitable and productive enterprises.

The history of Wal-Mart is not about the history of subsidies--far from it, as Wal-Mart has paid many billions in taxes over the years, surely more than enough to fund as many private airports on private land as it needed to conduct its business.
Btw, my one and only letter to the editor of the New York Times advocated privatizing airports and landing slots, which are now controlled by the goverment.

Kevin Carson - 12/30/2005

Well, you should check out Chandler's The Visible Hand on how the evolution of large national wholesalers and mass retailers in the 19th century depended on a government-subsidized transportation system.

"Subsidies" doesn't just mean direct payments. It also refers to the socialization of costs through government-provided infrastructure and services.

If airports and highways were funded entirely by user fees, on a cost basis, and deprived of eminent domain, all of Wal-Mart's much-vaunted innovations in distribution would be about as useful as titties on a fish.

Here in NW Arkansas, we've got a regional freight airport (built on stolen farm land) shoved down the taxpayers' throats by--you guessed it--secret political lobbying by Wal-Mart and Tyson.

William J. Stepp - 12/27/2005

The lastest nonsense about Wal-Mart on the internet is that the retailer is receiving subsidies.
WMT earned about $10.8 billion in net income in fiscal '05 and paid about $3.96 billion in taxes, an effective tax rate of 36.7%.
Meanwhile, it paid $0.52 per common share in dividends on 4.16 billion shares outstanding, a total of $2.16 billion in dividends.
So who owns Wal-Mart, its shareholders or the government?