Big box economy

This entry was originally posted on 19 November 2004 at 12:15 p.m.

Earlier this week, PBS aired a program about Wal-Mart on Frontline--Is Wal-Mart Good for America? I'm not a big fan of Wal-Mart; of all the big box companies, this one is my least favorite for a number of reasons. This program actually added reasons to that list.

A couple of points made during the program really stood out. First, Wal-Mart has become so powerful that it has reversed the normal order of operations when it comes to purchasing and pricing. Standard practice involves manufacturers setting prices and retailers accepting these prices. With Wal-Mart, the reverse happens: they now demand certain prices of manufacturers, and if the manufacturers don't comply, Wal-Mart drops their products. Which means they lose a substantial part of their revenue, because in many cases Wal-Mart is their largest retailer.

Second, as one person the program interviewed argued, Wal-Mart is driving down the cost of living, but it's also driving down the quality of life. Wal-Mart's "rock-bottom" prices (and they do not sell everything for the lowest price) mean that their employees make less and have fewer benefits. Some of them work multiple jobs because they can't make a living on what Wal-Mart pays them. And--and here's the kicker--because Wal-Mart is one of the US's largest employers, and because Wal-Mart's practices drive many other stores out of business, many of their employees are in essence left without a choice about working there.

This program reminded me of something i'd recently read, a passage from the book Our Kind by Marvin Harris. I'll quote it here:

With the end of the slave trade, the Europeans forced the Africans to farm and mine for them. Meanwhile, colonial authorities made every effort to keep Africa subservient and backward by encouraging tribal wars, by limiting African education to the most rudimentary level possible, and, above all, by preventing colonies from developing an industrial infrastructure that might have made it possible for them to compete on the world market after they achieved political independence....

If you doubt that colonialism could have had such long-lasting consequences, just think of Indonesia and Japan. In the sixteenth century these two island civilizations shared meany features of agrarian feudal states. Indonesia became a Dutch colony, while Japan shut its doors to European traders and missionaries, accepting nothing but books as imports from the West, especially technical books that told how to make munitions, build railways, and produce chemicals. After 300 years of close contact with their European masters, Indonesia emerged into the twentieth century as an underdeveloped, overpopulated, pauperized basket case, while the Japanese were ready to take their place as the most advanced industrial power in the Far East.

That's on page 119 of the paperback edition.

So here's the connection: is the kind of economic oppression that occurred in the African colonies happening again, here in the US, on a smaller scale? Is Wal-Mart playing the part of Western colonial masters to the citizens of its own territories?

If so much of our internal economy is driven by Wal-Mart, and if the bulk of its employees are not making enough to do things like visit doctors, earn college degrees, and raise well-educated children, what will the result be in 20 years? Are Wal-Mart's practices in danger of dooming the US to a self-induced economic and educational depression?

Maybe it won't be that extreme. Given how complex these things are (and i've greatly simplified things here), i doubt it will. On the other hand, i can't help but wonder whether the big box economy, while attempting to make life affordable, is really more of a slow poison that will have lasting marks on society.