Wednesday, January 18, 2006

My Druthers: Moscow and Wal-Mart, Part III

While Wal-Mart is the only big box with a current ambition to set itself down in Moscow, I have to wonder if Moscow has more choice than Wal-Mart or death. A lot of Wal-Mart supporters accuse detractors of trying to thwart Moscow's growth, of diminishing the choices for residents of the Palouse, and of undermining the free market. I can say that none of these are my goals, though only conditionally.

I have to wonder why Wal-Mart is necessary for Moscow to grow. Obviously, they're the ones who are proposing opening up shop here, but I would rather they not come. I realize that big boxes are not the most perfect of corporate citizens, Wal-Mart strikes me as one of the very worst. If nothing else, Wal-Mart's sheer size and dominance of the market is enough to give me pause. Then, of course, there is the fear of Wal-Mart monopolizing and breaking the Palouse economy as discussed in Part II.

This brings me to the matters of consumer choice and the free market, which are not as simple as free-market fundamentalists would have us believe. Moscow's economy does not allow for infinite choice. Adding Wal-Mart to the Palouse retail profile will not allow unfettered choices for consumers. There are only so many businesses Moscow can support, so Moscow will only have so many retail choices (as long as shoppers stay in the area).

Further than the necessary limitation of choices in the Palouse retail economy, there are limitations on informed consumption. Wal-Mart's bad behavior when it comes to employee treatment, supplier extortion and the de facto encouragement of the use of foreign sweatshop labor are not necessarily apparent to the buyer who is trying on t-shirts. A label may say MADE IN CHINA, but what does that mean? There are plenty of non-sweatshop Chinese clothing factories that are decent places to work. How am I supposed to know what I'm buying, exactly? Ideally, a person would be armed with all the information they want before going shopping, but I think we all know this isn't practically the case. Even on-label assurances or storewide guarantees can be fudged.

Turn-of-the-century Americans were disgusted and surprised to learn the nasty details of the meatpacking industry in Upton Sinclair's novel The Jungle. Most of the country did not know what was going on with the production of their food, and there was only so much they could do to inform themselves. This is why we have the FDA and other regulatory commissions; Americans have given their government the responsibility of making sure tainted or cruelly-produced products do not go on the market in the first place. I shouldn't have to say that many (but not all) illegal and unethical business practices that Wal-Mart makes a habit of go unpunished, unnoticed, or reprimanded with a slap on the wrist.

What I would most like to see in Moscow (assuming Pullman's Supercenter is a done deal) is not a Wal-Mart Supercenter, but any other big box store that can compete on the scale that Wal-Mart does. Fred Meyer, Target or any other business would at least create real competition for Wal-Mart in the Palouse economy. Local retailers would still take a big hit from this, but with the Big Boxification of the retail economy, I see this as the most acceptable option for Moscow. How to make this happen? I'm not sure. Is it possible, legal or fair? Also not sure on those fronts.

I am not sure if this is too optimistic, too pessimistic or within the scope of reality. I am not opposed to Moscow's growth and I am not about to quarrel with Wal-Mart's ugliness if it would mean screwing locals out of jobs and healthy retail competition. I like to think I am being more realistic than sentimental on this issue, but economics is something I know very little about, and perhaps I'm undercutting both reality and sentimentality with this.

As the situation with the Palouse and Wal-Mart develops, I plan on continuing this Moscow and Wal-Mart series. If you missed them, check out Parts I and II. For a good discussion about socially-responsible business practices and investing, stop by this Plastic thread.
Post a Comment