August 4, 2005

Ratcheting up the Hysteria (Draft)

Leviathan Slayer isn't terribly impressed with Liza Featherstone's latest:

In "Wal-Mart's P.R. war", Liza Featherstone lays out a laundry list of alleged sins and then says:

The largest and most profitable retailer in the world -- and in the United States, with 1.3 million workers, the largest private employer -- is becoming nearly as infamous as Enron or the Triangle Shirtwaist Factory.
Infamous in the minds of left-wingers, no doubt, but such infamy tells us nothing about Wal-Mart and much about the internal mental processes of those on the left. To them, a successful, profitable company is comparable to a sweatshop that locks in its employees and allows them to burn to death.
That's going more than a bit too far, I think, but the analogy was implied by Ms. Featherstone. Her claim must be a personal anecdote about her circle of associates, because it is completely unsupported by any evidence about the opinions of the wider population.

To me it seems like many (certainly not all) of Wal-Mart's critics are not making an honest assessment of the current state of the War on WM. For all the new organizations and alliances, the roster of impassioned recruits, a small but growing list of battle victories, and high political connections, the War on Wal-Mart has barely modified the reatiler's domestic and international expansion in stores or supplier base, and more importantly, has not hit the bottom line.

(The most impressive victory of Wal-Mart critics was the pay and promotion reorganization, which I think was largely in response to the gender class action lawsuit. But these not insignificant changes occurred before the current assault, and in a relevant way, prevents NOW from taking the point man position against Wal-Mart.)

WM critics' vocal and blunt attacks on particular issues have scored only minor victories, which is notable because, outside of specific new store locations, Wal-Mart isn't fighting very hard -- or at least very visibly hard -- to win individual battles. It seems to me that WM is sticking to a long-term defense plan, which counts on Wal-Mart's opponents stirring up their base wildly, but not effectively reaching out and convincing nonbelievers of Wal-Mart's evil.

I gather from first-hand, anecdotal, reading that when the conversation of the average online blogger turns to Wal-Mart, it's still mostly about 1) leaving, getting, or keeping a job there, 2) finding low prices on consumer goods, 3) going some place to hang out for a while.

WM's critics think they have unstoppable political momentum, and they are getting positive feedback from Senator Kennedy and lesser politicians, along with generous media coverage. But it's quite a leap from the mouths of media to the minds of men, and getting any federal anti-WM bill passed will require far more political support than the anti-WM forces currently have.

Like Wal-Mart itself, those opposed to Wal-Mart and its labor and supplier practices rarely tell the complete and absolute truth. Keep this in mind when you're told about the size and impact of anti-WM forces:

Years of citizen outrage -- on a slow, under-the-radar boil -- has this year exploded in a highly visible public education effort, backed by a powerful and in many ways united set of forces: two new national efforts, hundreds of community groups, unions, women's rights groups, environmental activists and mad-as-hell individuals.
But that's simply one perception among many; so let's put that paragraph through the Patent-Pending ALP Nonsense Filter:
Years of activist outrage -- on a slow, under-the-radar boil -- has this year exploded in a highly visible smear campaign, backed by a politically-minded and in many ways united set of special interest groups: two new national efforts, hundreds of already existing community groups, impotent unions, leftist women's rights groups, environmental activists and mad-as-hell individuals.

Of course, most people really don't give a hoot.

One can also question whether the characterization of Wal-Mart as an extraordinary lawbreaker is accurate:
Low labor costs and a disregard for the law have been central to the company's way of doing business
Has disregard for the law REALLY been central to the Wal-Mart business model? I'd wager the farm that Ms. Featherstone cannot get a room of business professors and MBA students to agree that a primary secret of Wal-Mart's success is lawbreaking. I don't doubt that low but competitive wages are essential to its business model; but they are also essential to the profitable operation of most retailers, including the infamous mom and pop stores Wal-Mart replaces in the unnamed towns it allegedly destroys.

Ms. Featherstone also ought to realize that, in this universe, cause must precede effect:

Another important thread in recent anti-Wal-Mart history is that for years, communities all over the nation have been fighting to stop Wal-Mart from opening new stores. Their reasons include their likelihood of worsening sprawl and traffic, the company's tendency to destroy downtowns by shuttering local mom and pop stores, its threat to union jobs and research showing that a new Wal-Mart actually increases countywide poverty rates.
Whatever the reasons -- valid or invalid -- for citizens opposing new Wal-Mart stores "for years", the poverty research is almost certainly not one of them, since, if I have the earliest version, it was published only 10 months ago. That the study did not adjust for effect of Wal-Mart's lower prices (which is hard to do), routinely goes unnoticed when people cite it.

Also, I reject Ms. Featherstone's view that government regulation of business has effectively curbed harmful corporate behavior. Economists know that government bureaucrats are not objective regulation enforcers. Regulation is, in a sense, the antithesis of the rule of law; it substitutes straight guidelines with personalities and subjectivities. I view regulators as far-too-easily "captured" (i.e. influenced in thinking, whatever the cause) by any interests, and unions know this very well with regards to both union and corporate control over the functioning of the NLRB.

Posted by Kevin on August, 4 2005 at 01:42 PM