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Would Wal-Mart be a Problem Without its Government Privileges?

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Would Wal-Mart be so powerful, so destructive and so hated if not for the power granted it by governments? That’s the question that plagues me after watching Wal-Mart: The High Cost of Low Price (2005). Wal-Mart gets government subsidies, a government grant of limited liability and favorable tax cuts. So why does an otherwise fine movie fail to see their analysis through to the end?

Why Don’t Folks Get a Better Job?

Wal-Mart makes people work more hours than they actually pay them for, the movie charges. So why don’t people quit and get a better job, or start their own business? This question is not addressed. But it’s government that has artificially constricted work opportunities. They’ve imposed burdensome taxes and blatant inflation policies that rob people of their savings; savings that could be used to start a business or fund further education. Government passes laws forbidding people from running businesses out of their homes and government agents enforce these illegitimate rules against little old ladies who like to bake, folks down on their luck who run one too many yard sales and others in need.

Government Subsidies Prop Up Employees

How do people even survive while working at Wal-Mart, if the pay is so terrible and the hours so long? They depend on government subsidies: overpriced “benefits” forced on the workers in the form of tax payments. WIC, medicaid, medicare, government unemployment insurance, CHIP, Section 8 housing, food stamps, you name it. According to the film, Wal-Mart keeps lists of all the government benefit programs and directs their employees to them, instead of offering them a fair wage.

Local Business Ecosystems Wiped Out

When Wal-Mart comes to town, the movie shows us, the local ecosystem of small businesses is wiped out. Why? Because Wal-Mart offers lower prices perhaps? How can they do that? They get government subsidies, rip off their employees (see previous paragraph) and use even cheaper workers overseas. Is government leveraged to keep those overseas workers priced so cheaply? Probably but I don’t know as much about that.

An Example: Colombia

To take one example, I lived for some time in Colombia, a third-world nation, where the government has made it so expensive for businesses to fire workers that hirings are few and far between. They have also made it complicated and expensive to start your own business. The underground economy is huge there. If government makes it hard for workers in the U.S., it’s probably twice as difficult in your average globalized third-world nation.

Film Quiet on Real Solutions

What solution is offered by the film? Not much, I’m afraid. Folks in some cases have to fight their own local governments to keep Wal-Mart out of their communities. In at least one case, Wal-Mart got a measure on the ballot to overrule them! Clearly Wal-Mart executives are very skilled in leveraging the guns of government to get their way. But the film doesn’t talk about this.

The Man Behind the Curtain is Government

The solution is to end government. Without government, Wal-Mart will no longer have its subsidies, special tax cuts and shield of limited liability protection. It would be held accountable in courts. Without government, folks could keep their entire paychecks and if need be start businesses out of their own homes, unmolested by government agents. Without government, Wal-Mart would crumble. Don’t fight Wal-Mart, it’s just a front. Fight the real power behind it: government and its wanton use of aggression.

Photo credit: Brave New Films. Photo license.

By George Donnelly

I'm building a tribe of radical libertarians to voluntarize the world by 2064. Join me.

5 replies on “Would Wal-Mart be a Problem Without its Government Privileges?”

I think the important question is: Has Walmart (or any large, government propped business) benefited so much from aggression that if the markets were to suddenly be freed tomorrow, they would still be able to crush all their competition?

@bosco, unfortunately, “the important question” you ask suffers from what some people call “Nirvana Syndrome.” Or perhaps, “What if Syndrome.” As in, “What if all of a sudden, government went away?”

But that wouldn’t be how it happens. Ever. Even if the US government “went away” tomorrow, something would fill the vacuum because people still expect government to be there.

You might say, ok ok, “What if all of a sudden, government went away *and* nobody expected a new government to take its place?”

But you will always have to modify the “What If” scenario. It’s a little like the Heisenberg Uncertainty Principle. You’ll just keep having to make adjustments forever.

A better question for when people realize that government is the problem is not to ask what the last step is. A better question is to ask what the first step is. I think the first step is to ignore government and act like free people.

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