[extropy-chat] Seven cents an hour? (was: Riots in France)

[Rafal Smigrodzki]

On 11/15/05, Jack Parkinson <isthatyoujack at icqmail.com> wrote:
> > From: Rafal Smigrodzki <rafal.smigrodzki at gmail.com> wrote:
> > Subject: Re: [extropy-chat] Seven cents an hour? (was: Riots in
> > France)
> > To: ExI chat list <extropy-chat at lists.extropy.org>
> > Message-ID:
> > <7641ddc60511142253s3c7ba35h58a9d8f388985032 at mail.gmail.com>
> > Content-Type: text/plain; charset=ISO-8859-1
> >
> > It looks like whenever the name Wal-Mart is uttered, it occasions an
> > outpouring of statements so silly as to be childish.
>
> Well that was certainly true of the superficial remarks you made Rafal.
> Because, if you gave the debate a more than cursory look, you might have
> realized by now that the economic models we have now are also the models
> many will advocate for the future. All of this has a direct bearing on the
> way things might be. I noticed your language included such terms as
> 'puerile,' 'stupid loser,' and the suggestion of Luddism and ignorance as
> well as 'childishness.' Not a very mature assessment I would have thought -
> and more importantly - not a scrap of evidence was supplied!

### I do think that saying "money is bad" is a sign of puerility. I
remember myself saying these very same words at age 12 but almost
immediately after saying it I changed my mind, i.e. I started growing
up.

I am not in the mood to search for references on the correlation
between being a boy (Latin "puer") and having the beliefs I criticize,
so feel free to ignore the statements (although, you could look up the
references yourself, too, and see what I mean).

-------------------------------

> If you want to convince me (and maybe a few others) - then this is the
> challenge: Demonstrate (don't just sneer or give me another side-stepping
> opinion piece) exactly HOW Wal Mart is more efficient for America than
> several thousand smaller stores would be.
> .

### When I suggested thinking about Wal-Mart as a big truck, it wasn't
just empty rhetoric. Wal-Mart *is* a trucking company, with outlets.
And this is why it is possible to concretize thinking about its
efficiency: A large semi is more efficient than a dozen vans when it
comes to the transport of a large amount of goods from e.g. Minnesota
to Florida. This is so not because it has "bargaining power" over the
vans, or can physically push them off the road, but because it can
fulfill the needs (e.g. having Land of Lakes butter in Florida) of
more people at a smaller overall cost in terms of human effort (fewer
drivers, less drag, more durability, less gas per pound of freight) -
and that amount of effort finds its true measure in the relative
prices of Land of Lakes butter delivered by semi or van.

I hope you will not insist that I belabor the obvious fact that a
hundred semis make the whole country better off than a thousand vans
attempting to perform the same task. I don't need to explain that the
900 fewer drivers needed to haul goods do not become unemployed
wretches. I do not need to explain that burning hundreds of thousands
of gallons of gas less each year is not impoverishing the roughnecks
in Louisiana. I assume this is obvious and incontrovertible.

Now, a Wal-Mart is to a dozen mom and pops like a semi to a dozen vans
- it doesn't run them off the road, it doesn't do "predatory pricing",
it simply does things better in certain circumstances (selling large
amount of standard goods in locations with large numbers of
customers), and makes the competitors useless. And, just like a semi
is better for America than a dozen vans, a Wal-Mart is better than a
mom-and-pop, whenever lots of customers desire lots of standard goods.

---------------------------------
> And, when I say 'efficient' I don't mean in a company/internal sense - all
> big companies have a size advantage which leverages their ability to buy and
> sell. I mean: For the whole of the US.
>
> How is Wal-Mart better than the alternatives for America as a whole?
>
### No, no, Wal-Mart is not about "leveraging". Wal-Mart is about
bigger trucks, about getting volume discounts overseas, about
fanatical attention to detail, discipline, and better business sense.
And if Wal-Mart can "leverage" a price cut from suppliers, it's good
too: almost all of it will be passed on to consumers, and the couple
hundred million that winds up in the wallets of Wal-Mart shareholders
is a good price to pay for a lower price.

BTW, don't think I am uncritical of Wal-Mart and other large
companies: Every company dreams about becoming a government when it
grows up. There will be a time when Wal-Mart's competitors catch up
with its logistics innovations, get the same discounts and engage in
mortal price-combat right next door. Chance is, eventually Wal-Mart
will turn to the politicians for protection, will buy laws from them
to crush the upstarts. Already there are intimations of things to
come, with Wal-Mart putting pressure on politicians to enact laws
forcing businesses to provide health plans to employees - of course
not because Wal-Mart cares about its employees (it doesn't and it
shouldn't, it's a business, not a church) but because this would
burden some competitors more than Wal-Mart.

Once Wal-Mart becomes a government creature, I will be its implacable
enemy but until then, I am proud to say:

"I am a friend of Wal-Mart"

(and every other great capitalist organization)

Rafal