Thursday, February 16, 2012

Why (some) liberals are wrong about Walmart (among other things)

A lot of people I know criticise Walmart for its so-called evil influence on society (as opposed to places like Safeway that sell exactly the same products, at a higher price). This is my attempt to address some of these falsities that can be broadly divided in the following manner:

1) Walmart's quality is bad:
Irrelevant. Even assuming that is true, it is a free market. If Walmart's quality to price ratio were not adequate for the consumers (including me-- I literally live in Walmart), it would not be the biggest retailer in the world. Clearly, consumers choose Walmart. Are you really going to tell these millions that their choice in products is wrong and you know what is best for them better than they do?

2) Walmart is bad for suppliers: Another argument is that since Walmart is so huge, it can pressure suppliers and squeeze their profit margins, to their detriment. Well, I don't know how contracts work in socialist and crony capitalist hell holes, but in America, all such supply transactions are voluntary. Hence, such deals take place only if they benefit both Walmart and the suppliers adequately. If any suppliers feel that the profit margins are not adequate, they can simply refuse to deal with Walmart. If no suppliers agree to deal with Walmart, then the giant would be forced to increase the price it pays to its suppliers. The very fact that these deals continue to exist, and the fact that suppliers clamor for such contracts with Walmart even now, points to mutually beneficial relationships. Please stop telling these willing suppliers that the profit margins they are OK with are too low.

3) Walmart does not pay its workers enough: How do you define "enough"? If its workers were indeed worth more than what Walmart pays them, why can they not leave the job and get a job that pays what they are worth? Again, the worker-Walmart employment relationship is based on a voluntary contract that is mutually beneficial to both. The truth is, a fair salary is determined by the free market, and is equal to the amount of value a worker adds to the economy and not what a liberal feels it should be. As a corollary, if Walmart did not exist, what would these people do? Safeway (or Whole foods, or any organic mumbo jumbo store) cannot hire them, since if they could, they would have done so already.

4) Walmart leads to local businesses being shut down: So? Why is it OK for some people in the local economy to benefit from rent seeking behavior, by pricing their products at above-efficient levels, but its not OK for consumers in the same local economy to benefit from lower prices? What makes businesses (which are nothing but a certain category of people) special? Again, some argue that the level of service that such businesses provide cannot be matched by Walmart, so these businesses should not shut. My counterpoint is that if society actually valued these "elevated services" so highly, they would continue to buy from the local businesses, despite Walmart's lower prices. The fact that they don't makes the level of service an irrelevant point, despite, again, the "feelings" of the bleeding heart liberals.

Rationality is precious. I suggest all people use it.

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