business news in context, analysis with attitude

Intriguing piece on by Marshall Loeb, the former editor of Fortune magazine, in which he ponders the rapid growth of Wal-Mart and its impact on the economy.

Loeb notes that the late Sam Walton possessed a singular passion for retailing and the people who helped him build his company - a passion that today sometimes is hidden behind and beneath growth charts and stock market analyses.

These days, rather than respecting Wal-Mart's relentless growth and discipline, Loeb writes, critics are more likely to focus on the fact that "the world's fastest growing company has become a greedy Gulliver squashing hordes of Lilliputians -- forcing competitors to cut jobs and prices, putting small-town mom-and-pop stores out of business and generally causing more harm than good."

Questions like whether an economy can have either too much or too little competition must be answered, he writes. "Are too many of Wal-Mart's competitors and suppliers being strong-armed into submission by Wal-Mart's take-it-or-leave-it policies? How much creative destruction can society afford?"

And there's another question, a big one, tied to the number of jobs that Wal-Mart creates around the world, even if it is at the expense of other jobs at other companies that vanish when Wal-Mart comes to town:

"Who will argue that the customer is better off paying higher prices in order to preserve jobs?"
KC's View:
Tough question. And no easy answers.

But we keep recalling the analysis carried in The Washington Post some months back, when a columnist noted that when Henry Ford opened his first automobile manufacturing plant, his goal was to pay his employees enough money so that they could afford to buy a car. Wal-Mart's apparent goal, the columnist suggested, is to pay people so little that they can afford only to shop at Wal-Mart.

We keep worrying about the potential death of retailing diversity in America, and wondering what that might mean to commerce as well as to our culture.

But diversity and competition must be provided by other companies facing up to the Wal-Mart challenge and creating exciting and compelling shopping alternatives.

What was it that Pogo said about the enemy?