Reihan writes:
As a concrete matter, what really matters is ... how do you feel about Wal-Mart? After all, Wal-Mart embodies the impact of free trade and of the transformation of the service economy. That part of the left that bitterly opposes Wal-Mart is in effect defending the balkanized, decentralized service economy of the past that delivered low-quality products at high prices. Now, they believe that they are in fact defending a "high-road economy," but mom-and-pops hardly represent "the high-road economy": quite the contrary.
That is, in part, right. Wal-Mart is the concrete expression of globalization, the transition from a manufacturing economy to a service economy, and a competitive strategy that relies on constantly slashing labor costs up and down the production chain. Where the specter of globalization lurks ominously and abstractly beneath your bed, Wal-Mart probably sold you your bed, your sheets, and your pillows, not to mention got you laid off from your job at Vlasic pickles. It's real, yo.
But Reihan's wrong to set up a dichotomy between the mom-and-pops and Wal-Mart. Here he's conflating two separate and unequal arguments about Wal-Mart. There's one, dealing with mom-and-pops, that's a cultural qualm. It laments the homogenization of the retail economy and the destruction of individualized, decidedly local, outlets. It's not an economic argument.
The second is an economic argument, perhaps best made by Barry Lynn, that frets over Wal-Mart's obsessive search for low prices, and the ripple effects that quest has on labor standards. If Wal-Mart won't let Crest raise prices a penny on toothpaste, how will they gives raises to their workers? If Wal-Mart will continually slash health benefits and rig the system to purge those who need health care, how can their competitors continue to spend the money on benefits for their employees? And on, and on. Wal-Mart is, far and away, the largest retailer in the world. Their size allows them to dictate what producers will charge and create rock-bottom prices that other retailers have to compete against, which essentially enforces Wal-Mart's low wage, low price vision on the rest of the economy.
The question, in all of this, is never "Wal-Mart or mom-and-pops," or "Wal-Mart: Yes or no?" It's whether Wal-Mart can be better. Whether their efficiencies and focus on low prices can merge with a business ethos that doesn't kneecap the middle class, screw their workers, and and create a ceaseless race to the bottom in product quality and worker standards.
