The Only People Wal-Mart Should Have to Court are Consumers

by Don Boudreaux on May 27, 2011

in Wal-Mart

Today’s Washington Post offers a thoroughly sensible editorial on why the current city administration in Washington, DC., would be wrong to require (as it seems to be threatening to do) Wal-Mart to build a store in location X in order for the city to give that retailer permission to build in locations A, B, C, & D. But I was baffled by this passage in the editorial:

There’s no question that a fair amount of horse-trading goes on when companies enter — or are courted by — a market. But threatening to interfere with a governmental process is nothing more than a shakedown.

More-accurate wording would be:

There’s no question that a fair amount of horse-trading goes on when companies wishing to set up shop seek the permission of — or are courted by — a government. But threatening to interfere with a market process is nothing more than a shakedown.

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{ 11 comments }

Dan H May 27, 2011 at 7:36 am

Jeebus Christ… when it seems WaPo is about to finally get it right, they take a step back to worship the Almighty State.

Krishnan May 27, 2011 at 7:47 am

I wonder if the Post would comment on the shake down that Obama has initiated for all contractors – From what I understand, there will soon be a rule that companies seeking to get Federal Contracts MUST show who they have contributed to – and if they have contributed to any Republican, there goes their chance of getting our money – the contract. Obama is the Mafia Boss – demanding payment from those that want to deal with the Feds.

Methinks1776 May 27, 2011 at 9:32 am

Totally agree. I’m sure the Republicans will hold on to that particular feature when their man is the Mafia Boss.

Krishnan May 27, 2011 at 11:22 am

And that is what is so depressing … that it is always about power – hence the need to really REDUCE Government – and SPENDING – give them less power over people so we can create things and not cronies

Harold Cockerill May 27, 2011 at 6:21 pm

It seems we’ve had a whole string of Mafia Bosses since Lincoln was elected. They’ve pretty well shredded the 1st Amendment. Things will get really interesting when they’ve shredded the 2nd.

vidyohs May 27, 2011 at 9:31 am

“But threatening to interfere with a governmental process is nothing more than a shakedown. Either Wal-Mart meets the legal requirements or it doesn’t; either its developments satisfy community requirements or they don’t.”

Perhaps it is just me, but I don’t read that the same as Don.

I read that as saying that the government should not interfere with (using) a government process. The second sentence seems to be in support of my reading. I see the Post article as being consistent and, for once, correct.

However is, or should, anyone be surprised at the Mayor of D.C. making such a demand? Think the NLRB Vs Boeing. Isn’t it the same thing, the same style and attitude of the looney left towards business and markets?

Again, it is the same thing that began back in the late 1960s and ultimately wound up destroying the housing industry with the meltdown. Government coercing businesses to open outlets in areas that the business already knows will not be profitable and/or will only be marginably so because of the need for beefed up security and maintenance problems brought on by the targeted customer base.

Walmart understandably desires profits, and I am sure that without opening a store in D.C. anywhere, Walmart will enjoy profits anyway.

I think the real appropriate solution to the D.C. Mayors “problem” with serving people in his Skyline ward, is for the Mayor to put together an investment group and open a Walmart “style” store in that district and serve the customers with his own store.

PrometheeFeu May 27, 2011 at 10:27 am

Hey look! Legal extortion. The mayor of Washington DC deserves to do jail-time. What a jerk.

Dean Sayers May 27, 2011 at 4:16 pm

These posts prove something Ford couldn’t get nearly 100 years ago: that “the highest wage possible” has absolutely nothing to do with well-functioning capitalism. I would reject the notion that companies “should” only have to appeal to consumers. I don’t think this is ideally or realistically accurate. Stakeholders should be courted, and this always includes labor and consumer interests.

Realistically – graft and cartelization are often far more valuable than competition in accruing value for corporations. What right do you have to tell capitalists that their best-laid plans for accruing wealth aren’t good enough? Isn’t their own self-interest sufficient, or is there some other ideal in place?

Harold Cockerill May 27, 2011 at 6:29 pm

If it’s a source of acccruing value for corporations one would have to wonder why those countries with the greatest graft and cartelization are among the poorest. Could it be that being forced by the market to appeal to consumers pushes companies to do to do what’s best for society?

DF Ssayers May 27, 2011 at 9:09 pm

“If it’s a source of acccruing value for corporations one would have to wonder why those countries with the greatest graft and cartelization are among the poorest. “

I can tell you why. It is because civil society is weakest there.
Civil society is largely governed by the inclusivity of decision-making power – in the economy especially, when a “dollar is a vote” as the saying goes (I think that’s one from Mises)…

Tyler Cowen posted a link to a blog about this issue a bit ago: Using a new dataset from Japan, this paper demonstrates that state agencies choose localities judged weakest in local civil society as host communities for controversial projects.

“Could it be that being forced by the market to appeal to consumers pushes companies to do to do what’s best for society?”

Absolutely. I think you hit on one of the important vectors of power in economies with mass media. But this isn’t the only story. If media is a clearinghouse for power, then it follows that where that power can be purchased and sold as the cost of ownership and management, that power is capitalized. I think this speaks to the issue of equality of power above… here, the issue you speak of little more than the power of capital.

DF Ssayers May 27, 2011 at 9:19 pm

Further drawing on the point of mass media and it’s “doing best for society” (I ignored this at first since it brings us back into the normative realm), you ignore the real value of media manipulation to skew interests. Media don’t try to inform the public: they make people feel good about themselves, comfortable in a malaise of information, in order to direct media consumers to whatever accrues them value (even if that value isn’t strictly monetary, though it often is).

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