Friday, January 28, 2005

Wally World II - Commentary Response

“(Adam) Smith’s argument that capitalism orients the energies of entrepreneurs toward serving others is vindicated by many examples from the contemporary business world. At Wal-Mart, for instance, Sam Walton worked tirelessly to develop an efficient inventory control system so that he could monitor consumer preferences and satisfy them as promptly and cheaply as possible. Customers flocked to Wal-Mart, and Walton profited handsomely.”

Dinesh D’Souza – “The Virtue of Prosperity”

I received some very interesting comments in response to my post about Wal-Mart. I’d like to take a few minutes to respond to some of them, especially those that did not agree with my views.

First, there was this from “Anonymous:”

“I was told well with Walmart there are opportunities for advancement to obtain a managment position where you can make better money!Sorry but not all of us can be managers.So they have climbed the corporate ladder while steping on a lot of little people on the way up.You see with them you are just another number not a real person.Its what you can do for them not what they can do for you.If you dont play the game by thier rules then they will find another player who will its just that simple.After 3 years I walked away with nothing to show for it.Also its a hard place to work because you have to deal with the public and because it is Walmart customers think that what ever they dish out you have to take they are rude inconsiderate and thankless.”

I have a couple of responses. The first comes from Holy Writ:

Matthew 20:1-15 (New Living Translation)

Matthew 20

Story of the Vineyard Workers

“1"For the Kingdom of Heaven is like the owner of an estate who went out early one morning to hire workers for his vineyard. 2He agreed to pay the normal daily wage[
a] and sent them out to work.
3"At nine o'clock in the morning he was passing through the marketplace and saw some people standing around doing nothing. 4So he hired them, telling them he would pay them whatever was right at the end of the day. 5At noon and again around three o'clock he did the same thing. 6At five o'clock that evening he was in town again and saw some more people standing around. He asked them, `Why haven't you been working today?'
7"They replied, `Because no one hired us.'
"The owner of the estate told them, `Then go on out and join the others in my vineyard.'
8"That evening he told the foreman to call the workers in and pay them, beginning with the last workers first. 9When those hired at five o'clock were paid, each received a full day's wage. 10When those hired earlier came to get their pay, they assumed they would receive more. But they, too, were paid a day's wage. 11When they received their pay, they protested, 12`Those people worked only one hour, and yet you've paid them just as much as you paid us who worked all day in the scorching heat.'
13"He answered one of them, `Friend, I haven't been unfair! Didn't you agree to work all day for the usual wage? 14Take it and go. I wanted to pay this last worker the same as you. 15Is it against the law for me to do what I want with my money? Should you be angry because I am kind?'”

I took the comment to mean that Wal-Mart is unfair in almost every regard. Their wages are low, their management practices are not friendly to workers, the jobs available are “dead end” jobs, and that their customer base is “inconsiderate and thankless.”

I think that about covers it.

I offer a couple of exhibits in defense of capitalism and its fairness as an enterprise and Wal-Mart as one of its successful practitioners.

First I offer this from James Madison, one of this nation’s founding fathers. Like the other founders he saw that liberty often produces situations that seem to be unfair. But he reasoned (I believe correctly) that any form of government that spent inordinate amounts of time fixing these “problems” was guilty of “erroneous thinking:”

“Theoretic politicians, who have patronized this species of government, have erroneously supposed that by reducing mankind to a perfect equality in their political rights, they would at the same time be perfectly equalized and assimilated in their possessions, their opinions, and their passions.”
James Madison, The Federalist Papers, #10

Next I offer my son, Michael Dillon. When he was attending college in Springfield, Missouri he decided that working part time at a Mcdonald’s “flipping burgers” was a dead end job, so he didn’t work and expected Nancy and me to provide occasional support. Now Nancy and I love Michael very deeply, but that love didn’t mean that we were required to support him if he was able to work. Call us mean, call us capitalists if you will, but we knew that Michael had to face the reality that this is how free market systems work. We took a drive over from Memphis to Springfield to explain the workings of this “evil system.” Fortunately for us there was an object lesson at the restaurant we ate at that Michael has never forgotten. About halfway through our meal one of the busboys caught my eye. He was a man about my age. I didn’t know him, but from his appearance he seemed to be a very nice man. One of the things that was clear to me was that he wasn’t bussing tables for his own amusement. He needed the money. I leaned over the table to Michael and whispered, “Michael, do you see that man. He’s probably a very nice man. Now he’s my age and he’s bussing tables. I need to explain something to you. If that’s all you want to do with your life and you wind up being a busboy Nancy and I will love you just as much as if you become the next Bill Gates. It’s your decision. You can either work at Mcdonald’s short term or do it long term. Those are the options you’re looking at.”

Well, Michael got the point. He graduated from college and now owns a small insurance agency in the Kansas City area. He’s learning more about capitalism and free markets every day and he’s finding that it has its ups and it has its downs, it has its rewards and it has its penalties.

As for “Anonymous’s” feeling about customers, I don’t know what to say other than they are cranky at times. They’re a microcosm of America.

Another anonymous commenter had this to say:

“Do you think a senior in high school has any future working for a living in America anymore?”

“Do you think Wal-Mart is a free market standard that can continue to be aided by taxing American workers income while lowering their living wage?”

“The fact is, you have robbed God and do not know it.”

In response to question number one I offer Corina Nour. Corina is a young citizen from the Republic of Moldova who lived with us as an exchange student from August of 2003 to June of 2004.

One of the things about her that Nancy and I found so refreshing was, that at age seventeen, living in a former Soviet Republic, she was well versed on the noble idea of freedom. In fact, in her biographical sketch she quoted at length from Thomas Paine’s “The Rights of Man.” I knew the minute I saw that in her bio that her stay with us would be interesting and challenging.

Her language skills were outstanding. Her English was better than about seventy percent of the American students she went to school with. We learned that she also speaks Romanian, Russian, German, and French. While she was in Emporia she also learned Spanish.

Another of the things about her that was so refreshing was her respect and dedication to learning. Here was a student who came from a country with a multitude of disadvantages. Moldova is economically poor, militarily weak, and not fully integrated into the new world marketplace. But her great advantage over American students was her willingness to learn and apply herself diligently to the task before her. She turned out to be one of the top students in her classes here in Emporia. She did so well that she actually spent some of her spare time tutoring American students. Her American Government teacher told me every time we’d get together that he needed more students like her.

She was asked once by an interviewer from a local media outlet what she thought of homecoming and all the other events at the high school. She didn’t seem too interested so the interviewer asked her what types of counterparts they had to these things in Moldova. She said that the young people of Moldova understand that their task is to build a new future for the emerging democracy and that in turn meant that they were going to have to prepare to compete in a global economy. The interviewer didn’t find out about homecoming in Moldova, but he did find out what the young people of Moldova are thinking about.

Now I don’t want to indict America’s high schoolers, but all too often our educational system is grinding out students who are neither academically sound nor mature enough to compete. It’s even become a cliché – Johnny can’t read, Johnny can’t write, Johnny thinks the American Revolution started when the Japanese attacked Pearl Harbor. Far too many know more about “Eminem” than they do about free market economics.

Regarding the issue of taxes, I’ve gone through some of my recent receipts and have found that it was the State of Kansas that imposed the taxes, not Wal-Mart.

Regarding the robbery, my wife handles our books and she very scrupulously gives to charities in addition to paying our taxes. We have given to colleges, a local theatre restoration project, several para-church ministries, the Red Cross (tsunami relief), and our local church. Our giving is a matter of public record. We count it a privilege to do so. God has been very gracious to us.

A commenter named “Aldon” had the following to say:

“Then, there is the issue of whether local ownership of stores is a good thing. Part of Walmart's efficiency is by having large centrally located stores. It means that everyone has to drive a little further to a store that isn't owned locally. According to a study by Iowa State University, in the first decade after Wal-Mart arrived in Iowa, the state lost 555 grocery stores, 298 hardware stores, 293 building supply stores, 161 variety stores, 158 women's apparel stores, 153 shoe stores, 116 drugstores, and 111 men's and boys' apparel stores.”

“Speaking about our country, many people dislike Walmart because of their relationship to China. According to the Washington Post, every year Wal-Mart purchases $15 billion worth of products from China. The L.A. Times goes on to note that Walmart uses 3000 factories in China to produce its goods, which is nearly as many as the 3600 stores that Walmart has in this country.”

Like Aldon I want small businesses to succeed in small town America. I certainly don’t want to see them fail. And I think he and I might even agree that Wal-Mart has contributed to the failure of some of the businesses he mentioned. The problem lies in the “statistics” though. I don’t believe that there’s a one hundred percent correlation between the failure of 298 hardware stores and 555 grocery stores and Wal-Mart’s arrival in Iowa or any other state. If someone were to dig into the statistics they would find a myriad of reasons for the failures, from under-capitalization to poor business practices.

Now I do find great affinity with his comments about China. Wal-Mart does an enormous amount of business with China. The question that needs to be answered about China is what the impact of free trade and commerce will have on liberalization over the long term.

In today’s New York Times Robert Wright made the following observation about the impact of capitalism and freedom on China that I believe addresses Aldon’s question:

“This link between economic and political liberty has been extolled by conservative thinkers for centuries, but the microelectronic age has strengthened it. Even China's deftly capitalist-yet-authoritarian government - which embraces technology while blocking Web sites and censoring chat groups - is doomed to fail in the long run. China is increasingly porous to news and ideas, and its high-tech political ferment goes beyond online debates. Last year a government official treated a blue-collar worker high-handedly in a sidewalk encounter and set off a riot - after news of the incident spread by cell phones and text messaging.”

In other words, free market economics may well do to China what all the saber rattling in the world could never do. It will bring more and more demands for freedom and free expression of ideas. China has seen what free markets have done for Japan and South Korea. They haven’t tasted the fruits of politicalfreedom yet, but they will one day, and Wal-Mart may have a hand in it.

I appreciate the comments and feedback. I realize that I’m not an economist or a trained scientist. But hopefully my anecdotal evidence and our short little trip from Emporia to Moldova to our country’s founding have given you more insight into why I still plan to buy my mission figs at Wal-Mart. Now if someone finds a way to get them to me more efficiently and cheaper I’ll reconsider.


King of Fools said...

Loved the bus boy story. Sometimes it is those magic lessons that come from nowhere that will make the biggest impact on our children.

Anonymous said...

Free market is just another extension and application of the human paradigm -- Human Defined: Earth's Choicemaker.

Q: "What is man, that he could be pure? And he who is
born of a woman, that he could be righteous?" Job 15:14
A: "Who is the man that fears the Lord? Him shall He
teach in the way he chooses." Psalm 25:12

Q: "What is man that You are mindful of him, or the son
of man that You take care of him?" Hebrews 2:6
A: "I have chosen the way of truth; your judgments I have
laid before me." Psalm 119:30 "Let Your hand become my
help, for I have chosen Your precepts."Psalm 119:173

We're back to basics: economics or "What's for dinner?" -- Man is earth's Choicemaker. Psalm 25:12 He is by nature
and nature's God a creature of Choice - and of Criteria. (No instinct.)
Psalm 119:30,173 His unique and definitive characteristic
is, and of Right ought to be, the natural foundation of
his environments, institutions, and respectful relations
to his fellow-man. Thus, he is oriented to a Freedom
whose roots are in the Order of the universe.

Where do we get the idea that Liberty (the endowed ability to choose) and Freedom (the opportunity to choose) are merely political ideas granted by 'a government?' Grade: F-

a Choicemaker
Psalm 25:12