My Mother Is A Fish

Wal-Mart sells to consumers. Wal-Mart hires workers. Wal-Mart has been attacked for influencing -- impacting--the social-economic environment to the detriment of workers. Wal-Mart has been admitted by perhaps most of the same as those who attack -- admitted to do good for consumers. These statements, viewed together, raise some questions to my mind. I assume here that they are sound statements.

Workers earn wages and allocate them to savings and to consumption. When they save, they do so with an eye to the consumption in the future of themselves or their heirs. When they consume, they benefit from lower prices. Therefore, the only way in which they can lose from a social environment which pressures for lower wages and pressures for lower prices of consumer-goods is if the first outweighs the second.

Is that possibility plausible? May I, on the other hand, rightfully raise the question when as yet I may well not grasp the argument to show that Wal-Mart's actions lower wages? I reckon not, to this last question. So, to that I turn.

Wal-Mart's business practices are understood to allow it to purchase goods, for one thing, and factors of production -- most especially, labor -- for another, at lower prices than were they absent from the picture. One good Wal-Mart sells is bicycles -- and let's assume the above pertains to it. Wal-Mart now sells cheaper bicycles. Either the consumers will pocket the savings from the cheaper purchase or they'll opt to buy more bicycles. Set aside the latter possibility. ('Effective'?) Demand for bicycles falls; bicycle-builders, their DMVP (discounted marginal value product) falls; so too their wages.

Yet, meanwhile, demand for some other good rises, as the consumers' savings shift to elsewhere. It may be a capital good -- in which case, their gain is in the future product of that capital good. Or, it may be a consumer-good. Let's suppose: gardinias. Wal-Mart -- by assumption -- is able to pressure down the price of gardinias, too, and, so we know too, the wages of gardinia-gardeners.

Still though, the downward pressure on the gardeners' wages as the result of Wal-Mart's (nameless here) business practices is offset in some measure as a result of the raised effective demand (which followed, in turn, from the savings consumers gained by lower prices had by the same cause). We cannot consider the gardinia-growers worse off -- or, certainly, not worse off than the bicycle-builders. Let's turn back to them.

Two questions seem to arise. No: considerations. One: Do not these bicycle-builders gain in their role of consumers? They, too, can buy -- at least--cheaper bicycles; and likewise of all other Wal-Mart products, excepting for the moment the gardinias. It may be objected that they need some goods other than those that Wal-Mart provides, and for these they--They will be less able to afford these (on lower wages).

So, second consideration:

Alas, the bicycle-builders have suffered in this scenario; the consumers have exercised their prerogative and effected a change in the price structure signalling the relatively greater economic-value of labor in gardinia-growing, but this does mean that the fund of wages must fall in bicycle-building. However, insofar as these workers are free to seek renewed employment and too the rest of the labor market, to the effect of bringing labor into better alignment with the needs of the consumers, we must consider this an economically good change.

This sounds okay to me -- with one major doubt. Namely, how should we understand this statement when the economy in question does not permit a free allocation of labor? when many will fall into the holes -- of unemployment -- dug by those whose policies made it so difficult for labor and capital to cooperate?


Conclusion.

At bottom, I still don't see what's wrong with Wal-Mart. Like as not I have missed some major arguments against; and I may have argued speciously above. Still, that's where I'm at.