The heart of the problem is that most People like Walmart [View all]

[cthulu2016]

Last edited Thu Nov 22, 2012, 06:27 PM - Edit history (3)

Analysis of Walmart America ought not overlook the preferences of real people. The people are not merely cattle forced into Walmart. The biggest single reason Walmart is able to do what it does is that many people like Walmart. Their perception, based on experience, is that access to a walmart makes their lives much easier and increases their standard of living.

The malignant effects of Walmart wouldn't pose any threat if Walmart were not very popular, and Walmart is popular because customers would, on average, rather go to Walmart. (It's like crystal meth... terrible long term problems, but there's no doubt that people like it. A lot.)

Outside of large cities, Amazon.com has destroyed the category of book store, music store and movie store. How? Because people who loved books and music and movies preferred shopping at Amazon even though doing so would inevitably make the world worse for people who love books and music and movies.

The great majority of people prefer convenience and lower prices over paying a surcharge to maintain a real-world sense of community.


In economic terms, Walmart cannot be separated from Walmart customers. It is emotionally satisfying to blame a villain (Walmart), but if Walmart were destroyed another Walmart would take its place because our economic ecology almost mandates Walmart.

It's the ecology, not the creatures within it. Our current economic ecology has a whopping walmart niche in it.

And it doesn't help to say that Walmart imports inferior Chinese goods. That is a customer choice. If there was the same level of demand for some more expensive high quality American goods then Walmart would sell those, and would co-opt the manufacturer, demanding lower prices than other stores get in exchange for the huge sales volume Walmart can provide, and would force all small stores selling expensive high quality American goods out of business.

The modern monopolist model works for goods in general, not just Chinese goods.

And this modern explosion of de facto monopolism is due to computers... born from the productivity boom of the 1990s.

A perfectly efficient market will price compete itself into oblivion. This is the paradox of wage slavery applied to retail. Hourly "wage slaves" are cheaper than real slaves because the real slave has a baseline subsistence wage. You have to feed the slave enough to keep the slave alive.

The wage slave, however, will work for below subsistence if that is where the market sets the wage. A starving man will work for a crust of bread. And when he eventually becomes to sick and weak to work, another worker takes his place.

Similarly, a business will operate at a loss before finally closing its doors, and will price compete to a small loss if that is the only way to get customers. (If you cannot find an item below cost on the internet you probably aren't looking hard enough.) A business will take inventory on credit to maintain cash-flow, even while actually losing money on each transaction. (And the supplier extends that credit to maintain their flow of goods out of the warehouse.)

In the incredibly price competitive world of the internet and computer-assisted inventory and delivery the only way to having an pricing power is an effective monopoly.

Hence Walmart. Hence Amazon.

The modern environment has the sweet spot, the attraction-point, of the carnivorous de facto monopoly and that environmental niche will be filled.

I don't know what the solution is, but I know what the problem is not. The problem is not villains—not a few people with moral aberrations. The ecology demands the rise of the predatory mega-retailer.

And only government can change the ecology. The individual players cannot.