Bloodless Coup

The other thing is that one can make a neo-liberal argument against Wal-Mart, in that what (supposedly) keeps capitalism healthy is free competition. Monopoly and monopsony are both negative forces, and there are elements to Wal-Mart's behavior that suggest both.

For the record, these arguments are not new. There has been a strong case against Wal-Mart based on capitalist principles for quite some time. Their best and biggest claim to fame is low prices (which they clearly do well). However, what they have to do to achieve that (trade with China, anti-union, no benefits to workers, etc.) isn't really part of what Smith and Ricardo might define as "capitalism". I'm glad that Bainbridge has noticed these things, but he's late to the bus.

it's also worth noting that there's been a fundamental change -- simplification, really -- in the way antitrust law works with respect to these increasingly aggregated entities in retail, the media, and so on. while competition remains the nominal touchstone, it's no longer the complex of innovation, hospitality to would-be new entrants in a given business, and price competition. now, price competition is basically all that's considered. hence, as long as there are two big boxes competing with each other on price, two network conglomerates competing for your eyeballs at 6 and 11, two possible operating systems for your computer, and so on, antitrust turns the other way. regulators no longer ask, as once they did, what the long term effect will be on the general competitive landscape -- the heart of capitalism's presumed benefits -- reducing the inquiry instead to whether prices are artificially inflated. so as long as you don't fix prices, and as long as someone else is there to keep you honest in your pricing policies, you can create precisely the sort of trust the first antitrust regime was designed to foil.

Baltar,

What isn't capitalistic about doing business with China(set aside the fact that they are communists, their economics are actually quite semi-capitalist)?

Isn't free trade all about finding the best quality product at the lowest possible price? That is what competition is all about. I know that you know this. But, if we were to do business elsewhere, and not the place with the lowest price, then Wal Mart's prices would have to go up. Plus, Wal Mart's benefits package is not all that bad. They provide insurance, 401k, and stock options to their employees. Are those not benefits? Sorry if they actually have to work for what they get unlike some unions. Unions suck the employer for all they are worth and have no incentive to produce because they know they cant be fired. If I owned a business, it wouldnt be union. I'll be darned if let the people I hire tell me how much I have to pay them and how much they are gonna work. If they dont like what I pay, they can go somewhere else. Their labor is a dime a dozen to me and I dont have to provide them with everything under the sun. That being said, you can treat your workers fairly without them unionizing.

you can treat labor fair without unionizing. wal-mart does not do so, however. and if you were treating labor fair, you wouldn't have to resort to threats of retaliation to guarantee victory on a unionization vote.

competition is about entrepreneurialism, innovation, thinking out of the box to use a phrase from the toolbox of people who think thinking out of the box is changing packaging and portion sizes. price competition didn't lead to the automobile, or the computer, or penicillin. it's the fact that such innovations are worthy for the individual in the event that something pans out.

now, one can still make plenty of money with a clever patent devised in his basement. but the more we route everyone into jobs working for some corporate giant, and the fewer cottage industry-type things our marketplace allows, the fewer truly innovative organizations and individuals will be able to survive.

price competition is _not_ the whole point of the free market. not even close. and thinking like that will continue to stunt our growth as a nation and as a people as it already has done.

You know Big Country I'd be more likely to agree with this - "Isn't free trade all about finding the best quality product at the lowest possible price?" - if Wal-Mart didn't sell so much shoddy crap. And it strikes me that a big problem with its dominance is that it seems to be setting the norm of what consumers can hope to buy cheaply so very, very low. Which isn't to say that you can't buy certain perfectly acceptable things there. But much of their inventory leaves so very much to be desired.

And while it's not necessarily related to this debate - what's with their book-selling policies (or I suppose one could add their cd selling policies)?

I have no problem with Wal-Mart's push for lower prices; my objection is that most people associate capitalism with only lower prices. That's not really accurate. Capitalism is about competition. Clearly, price is an important consideration when a consumer decides between competing goods or services, but it shouldn't be the only one: quality, innovation, and other intangibles should figure in. If you can buy lunch from a national chain store (McDonalds, Subway, etc.) or lunch from a local diner, which do you choose? Sure, you think about which tastes better and which costs less, but capitalism allows for (and encourages) people to also think about the store you are buying from. The national chain will ship part of the money you pay for lunch out of your town (and state), while the locally owned diner will keep almost all of it here at home. In that sense, the local diner is "better" for the town. If all other things are equal (price, food selection, quality, etc.), it's better for you (in a long-run, develop the town, keep the tax base high to promote further growth kind of way) to spend the money in the diner than McDonalds (if the diner sucks, then you should punish it and spend the money at McDonalds, but that's another story). Wal-Mart has great prices (and we can argue about quality), but little else. There are vast stories about what damage Wal-Mart does to local economies. Take Morgantown (WV): Wal-Mart built a store within Morgantown city limits. By town law, they must pay a payroll tax to the city as part of their payroll. Recently, Wal-Mart has tried to get zoning to build a bigger store in the area. In a surpise to no one, all of their proposed sites were just outside the city limits (where they would not have to pay that payroll tax). Did they have a right to look to avoid the tax? Sure, but it certainly doesn't help the town's budget if they move.

As for unions, I think the debate goes both ways. There are good unions and bad unions (just as their are good companies and bad). Unions are not, by their nature, just evil. They serve a legitimate purpose (collective bargaining) if the employer chooses to act in an unfair manner. Unions can abuse their authority (teachers unions get cited a lot for this, with some justification), but they don't always have to. Why is Wal-Mart so anti-union? If they have good employment policies, then they shouldn't really need to worry about unions very much, should they? And any employer can fire employees - if they are unionized, it might mean firing all of them, but that's the right of the company.

How did unions get into this anyway? That was just one part of a longer list about how Wal-Mart manages lower prices. It really isn't an important part of the debate.

By the way, there was a piece in the NYTimes by Robert Reich talking about Wal-Mart and the values people have in the US. Now, this isn't a neo-liberal approach clearly, but it's another view.