I’ve been firmly in the anti-Wal-Mart camp for more than 20 years now, but it wasn’t much of an issue when I was living in San Jose and other large cities because there were so many options that few people I knew shopped at Wal-Mart. In Gilroy, Wal-Mart dominates the retail world to the extent that I frequently feel I’m the only person who doesn’t shop there. Today’s front page reported that Wal-Mart is now opening another location here in Morgan Hill, a mere 12 miles from the Supercenter in Gilroy. Ironically, they’ll be taking over the retail space recently vacated by Target moving into a larger building of their own recently in order to compete with Gilroy’s Wal-Mart. Meanwhile, the old Gilroy Wal-Mart building remains a vacant blight on the landscape as it has for several years now.
The majority of my anti-Wal-Mart sentiment has been covered elsewhere (predatory business practices, massive corporate welfare, deceptive advertising, poor customer service, etc), so I won’t get into them here. Instead, I want to talk about how the growth of Wal-Mart is an example of the benefits of of the true free market over a democratic system. I was recently asked how my local economics theory jibes with the free market, and I want to use Wal-Mart as an example.
In the so-called democracy in which we now live, Wal-Mart uses its massive resources to cut sweetheart deals with local governments hoping to bring more jobs and sales tax revenue into their towns. In fact, when they don’t believe the current “representatives” of the community will agree to subsidize their private business they simply contribute large sums of money to the political campaigns of those that will, then receive their payback from these new “friends” in government.
One of the concerns about a true free market is that predatory corporations like Wal-Mart will run rampant causing the closure and destruction of the small business. But in an anarchist free market there would be no subsidies for Wal-Mart meaning they would have to pay for their own infrastructure and not receive the sales tax refunds that other, smaller businesses do not receive. It’s certainly possible that Wal-Mart could still possibly crush the competition, but at that point they’d be fighting on a fair battleground.
This would also mean more realistic choices for consumers, such as myself, who prefer to shop with locally owned businesses. Since Wal-Mart would not be subsidized (with MY tax dollars) their prices would have to be higher and thus, more in line with the locally owned businesses who provide greater customer service and more benefits to the community that they call home. The majority of Wal-Mart shoppers I know claim that they’d rather not shop at Wal-Mart, but simply can’t afford to ignore the supposed bargains to be had there. The government has not only stolen a portion of their labor through income taxes, but is using that stolen labor to remove their choices within the marketplace.