The The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy

If you favor truth and empirical observation regarding Wal-Mart rather than the hyperbolic PR of green advoacates and union web sites this is required reading. It is excellently documented and the authors have no particular axe to grind since they are not affliated with Wal-Mart in any way.

The Wal-Mart Revolution surprised me. I expected almost any book on Wal-Mart's meteoric rise to power to focus on the many negative aspects of the company's existence and the disruptions it has caused across society. I must also admit that I started reading the book with preconceived notions about Wal-Mart and its practices, many of which have since dissolved or at least shifted. The authors (Richard Vedder and Wendell Cox) present compelling evidence that perhaps Wal-Mart isn't the source of evil we've been lead to believe it is. As they put it, "Wal-Mart is perhaps no saint, but it is not a major sinner either".To be fair, Vedder and Cox don't write the book as staunch Wal-Mart advocates, although they do tend to come off as more than slightly defensive of the retailing giant. In the early chapters they lay out some of the most popular arguments launched against Wal-Mart by its opponents. The remainder of the book explores each of those arguments in detail and evaluates key statistical and economic evidence relating to those arguments. They also take time to examine attacks from Wal-Mart's most outspoken critics and point out were those attack fall short factually.The most interesting part of the book isn't about the current retailing situation and Wal-Mart's future. It's about retailing's past. In order to provide the necessary context for their research, Vedder and Cox dive into the history of the retailing trade in the United States only to reveal that Wal-Mart is not the first innovative retailer to attract popular criticism. In fact, many other entities have come and gone that were accused of the same wrongs leveled against it today. The authors highlight the retailing innovations that allowed Sam Walton to create a chain that corporations around the world strive to mimic.Like any book produced about a passionate debate, there is a discernable amount of skew present. Not to the point of obvious fact twisting, but Vedder and Cox certainly don't hide their favorable opinions about Wal-Mart. I found the book to be interesting and extremely informative simply because it approaches the issue from a different angle. It exposes the true motivations behind special interests groups that fight Wal-Mart. It shows the strength that Wal-Mart maintains in its market, while at the same time providing a glimpse of its vulnerability. It shows some of the negative externalities of interventionist political decisions working to keep Wal-Mart out of communities. It examines Wal-Mart from both a domestic and international perspective and creates comparisons to the other well known big-box retailers. Although The Wal-Mart Revolution may not shift the readers outlook on big-box stores, it does provide insight into the retailing trade and the actions that have lead to the conditions we see today.

One of the worst aspects of politics is that the issues politicians use are too often used to commit people one way or the other based on emotions rather than reason or a set of facts. In recent years, with the advent of very accurate polling, politicians and those dependent on them for government largesse have found it convenient to pick out a "bad guy" (the "bad guy" only has to be someone they can smear, not someone who is actually guilty of bad behavior) and then blame a popular set of ills on them that the politician will claim to "fix".For example, the Clintons went after the "profiteering vaccine makers", as noted in many newspapers in 1993. (The calculating nature of this attack is discussed in Bob Woodward's "The Agenda".) The result? They all but killed off the domestic vaccine industry. Good job! But it got them something to rant about, divert attention from their early political blunders once in office and the ability to garner some votes in the next election. No matter that they made people worse off. The GOP tends to pull out the flag-burning amendment whenever they need to divert attention from some unpleasant political reality they stepped into, although that is getting a bit worn.Wal-Mart has been taking any number of hits from unionists, mostly Democrat politicians, community activists, and anti-globalization folks. This book is a very helpful way to get some clarifying information about what is actually going on in the retail industry and Wal-Mart's place in it. The authors also consider the validity of criticisms leveled against the world's largest retailer.In the preface the authors head off the criticism that will inevitably be made of anyone who fails to go along with the criticisms made against Wal-Mart, that the writer is a company stooge. The authors note that while Wal-Mart has made a modest contribution to the AEI, they knew nothing at all about it until after the book was completed and had little contact with Wal-Mart while writing the book. The introduction sets the stage for the book, which consists of twelve chapters divided into four parts.Part I is "Why Wal-Mart Matters" and provides a simplified explanation of how innovation and efficiency in retail makes customers better off through consumer surplus, the positive and negative externalities caused by changes in the marketplace, public attitudes towards the retail trade in America, the criticisms leveled against the company, and who these critics are.Part II is "The Wal-Mart Revolution". It begins with a fascinating discussion of the history of retailing. When the first chain stores began putting the local shops out of business, people were just as upset as they claim to be today and yet shopped at the more efficient stores with the lower prices, as they do today. Here is a quote from the speaker of the Indiana house: "The chain stores are undermining the foundations of our entire local happiness and prosperity." Sounds quite familiar, doesn't it?The authors also provide a history of Wal-Mart as well as its competitors and imitators. I found the charts on pages 47 and 48 quite fascinating. The retail trade in America has grown from around $250 billion in 1960 to around $800 billion in 2004. However, the retail trade for all those years has stayed at right around 8% of a growing GDP. It is interesting to note how these imitators and competitors are all more similar than different. Why? Because they are constrained by the marketplace and its competitive forces. People have only so much discretionary income and want to get the most for it. Therefore, those who offer the most equivalent goods (as perceived by the consumer) at the lowest cost will almost certainly be the winner in the marketplace. This has been proven out multiple times over the past century and more.In Part III the authors consider "Wal-Mart: Good or Bad". They look carefully at the employment information available, the impact the store has on communities, its cost/benefit to the taxpayer, its impact on the poor, the impact of the big box revolution on productivity and compare what is known to the claims and assertions made by the company's critics. The claims are often over blown or unsubstantiated. However, even when they do have a point stated more or less fairly, they fail to balance the negative with the positives.Part IV looks at Wal-Mart's future. It notes the impact the criticisms of Wal-Mart have had on its behavior, how it is faring in its moved outside the borders of the United States (mixed), and further evaluation of the critics of Wal-Mart and a consideration of what "we should do about Wal-Mart".I found this to be a breath of fresh air and a helpful source of information to balance the popular notions all too often that Wal-Mart is a force for evil in our economy. While this negative image cannot be squared with the reality of consumer and employee behavior, it is one that is too often accepted and discussed as if it were a fact. If you are interested in this public discussion and want to know the other side of the issue and get a more balanced view of the situation, then please read this book. It is not very long, easy to read, and I found it very interesting.

Until 1987, I owned and operated a hardware store on Long Island. Fortunately, family conflicts prompted me to sell the business. I say "fortunately" because of the dramatic changes in the retail marketplace that began in earnest in the mid 1980s. My store was located in the middle of an affluent area--the so-called Gold Coast--and was somewhat protected from the drive toward low-ball goods, which allowed me to continue offering higher-quality merchandise. Today, when I enter any retail outlet that sells products thought of as traditional hardware items, I find that I am presented with a narrow selection of virtually the same products but with unique packaging or superficial details designed to give the impression of difference. In general, quality has been sacrificed to marketing metrics keyed to pricing alone; the concept of "value" has been discarded. Americans like to get angry at the Chinese and other Asian producers when they fall victim to shoddy goods, rather than at themselves in their eagerness to purchase them. Anger should also be directed at both the political and corporate communities for facilitating the off-shoring of the U.S. manufacturing base to countries where externalities like pollution and poverty wages yield great profits for the corporate elite and their major stockholders. Walmart especially has been far from a beneficial force in my experience as both a retailer and consumer, and so I would take issue with the main premise of this book.