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

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.

I received the book fairly quickly. I was new and looked great1

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.

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,

The title of this book rather obviously mocks Leftist talk about revolutions but it is pretty accurate nonetheless. One of the authors is an economist so he brings to the subject the sort of cool rationality that is sadly missing from the standard Leftist boilerplate about Wal-Mart. The book gives you in detail all the facts you need to dismiss every single one of the Leftist criticisms. I liked the following paragraphs: "We reject the idea that Wal-Mart destroys communities and adds to urban sprawl. Downtowns were declining long before Wal-Mart became an important retailmg force, and the big-box retail revolution is but one additional factor in thc demise of retailing in central business districts where parking is typicaLl relatively scarce. While it is true that some stores go out of business when Wal-Mart enters a community, the opening and closing of stores in response to changing tastes and technology has been part of the retail landscape literally for centuries. Wal-Mart does not force stores out of business. Customers do, by voting with their feet and going to Wal-Mart with its lower prices and greater choices than the local alternatives. People prefer Wal-Mart and, in exercising their preferences, they are enhancing their own welfare, and thus that of the communities the stores serve. Wal-Mart serves customers at all income levels and walks of life, as do Target, Home Depot, Best Buy and other big-box stores. They appeal to consumers at all income levels -- but Wal-Mart disproportionately serves the poor. Wal-Mart stores are more often located in areas with below-average incomes, and surveys show that a larger proportion of lower-income people shop at Wal-Mart than people from affluent families. So the store's consumer welfare benefits particularly aid the poor -- and consequently, attempts to keep it out of communities hurt the poor far more than the rich.... Wal-Mart has not been particularly adroit in handling criticism. It has mounted a campaign to appease organized labor and environmental groups, tinkering with health care plans and entering the organic fish business, among other things. It strikes us that it may be abandoning its principles of everyday low prices to pander to its opponents, many of whom probably do not represent mainstream American thinking. We wonder whether Wal-Mart is trying to "appease the unappeasable"." I think the authors have hit on the crux of the matter in their phrase "appease the unappeasable". Leftist opposition to Wal-Mart is based on hatred of other people's success and all the PR efforts of Wal-Mart and all the detailed information in the book about it will not quench that hate. Wal-Mart's sin is the same sin that Leftists see in America as a whole and in Israel: Success.