Silent Archimedes

Posts Tagged ‘corporations’

Book Review: The Walmart Effect

Posted by silentarchimedes on March 20, 2009

The Walmart Effect

How the World’s Most Powerful Company Really Works – and How It’s Transforming the American Economy

Author: Charles Fishman

walmart-effectWHY I READ THIS BOOK

I do not like Walmart, yet I shop there. It is messy and dreary, yet I plan a trip to Walmart every few weeks. It is expansive, yet crowded and claustrophobic. I feel like I’ve spent just as much time there looking for either a product or an employee to assist me as I have actually shopping. I try to minimize my time there but the trip always ends up over an hour and I’m beat by the time I leave. Why do I keep going back there? To make things worse, all these stories about Walmart’s secrecy and unethical business practices keep popping up. Yet that has not stopped me from shopping there. The fact that Walmart has become ubiquitous with middle-class (and poorer) shopping has led most people to subconsciously accept it. So what is going on with Walmart?

THE AUTHOR: CHARLES FISHMAN

It must take someone with guts to take on the Walmart behemoth; especially after you read the book and realize that for most of its  history, Walmart has considered any type of publicity and media a threat to its business model. But Fishman has been known as an investigative reporter that attempts to bring to light the workings of institutions or groups that have been relatively unknown. According to the book’s website, Fishman has spent the past 20 years investigating organizations such as NASA and Walmart. He was also the first reporter to be allowed inside a Tupperware factory, and first in 30 years inside the nation’s only bomb factory.

SHORT SUMMARY

walmart_lowpricesIn an attempt to understand the inner workings of Walmart Inc. and its effects on job creation, global economy, work environments, suppliers, competitors, communities and other issues, Fishman talks with everyone that might be affected by Walmart but Walmart itself. Due to the secrecy of Walmart and the lack of transparency in its statistics, Fishman is forced to rely specifically on his investigative acumen. What he finds out is that Walmart is the ultimate definition of a dichotomy, a contradiction that baffles all levels of society; from the individual to the community to the country to the global economy. On one hand, Walmart is unpretentious, is no frills, provides hundreds of thousands of jobs, provides the cheapest prices for consumers and has always stuck to its core values. However, on the other hand, it has a dictatorial grip on its suppliers and competitors, kills almost as many jobs as it creates, indirectly destroys local natural ecosystems, promotes cheap labor and unfair labor practices, has no transparency or guilt and chips away at the core values of the free market system. It pushes the limits of good and bad capitalism and is the poster child of globalization.

REVIEW

This book really does a good job of trying to understand the Walmart effect. However, although Fishman tries to stay neutral on the positives and negatives of the issue, it is more common that his investigations lead to a negative perception of the company. It’s hard not to have a more negative view after reading the book. There is only one major positive about Walmart, it provides the lowest prices for many of the things families need. However, this is a huge positive and is shown even more during this recession. Walmart’s growth in same store sales have been increasing for the past 22 months while Target’s have fallen the past eight months (Source: Walmart vs. Target: No Contest in the Recession, Time Online). It’s not even a contest and shows that this positive is all that consumers need to turn a blind eye on all the other issues. And for sure, there are a lot of other issues, which Fishman does a great job of detailing and bringing out.

The book flows really well, from the beginning to the end… although the last chapter is the required “so after all this investigative work, what should we do or care about Walmart to make this world a better place?” The first chapter is pretty much a summary of Walmart’s influence on society. The rest of the book goes into detail about each issue by discussing academic studies on the company dating back to the mid-1980s, successful and failed interviews with former supplier executives from big and small companies, the impact of Walmart on things we take for granted now (like deodorants that sell without the useless boxes they used to come in) and talking to opponents of Walmart, from environmental groups to factory workers of their suppliers.

The most damaging against Walmart has to be that a lot of the investigation leads to the same conclusion, Walmart is a big cheapskate. Which was fine when it was a small company, but now that it is the biggest in the world, this sense of being cheap at all costs seems somewhat unfair. Unfair to other companies and unfair to the ecosystems and poor countries’ lax labor laws it depends on to produce such massive quantities of products. Fishman tries hard to not take a position, but the writing is in the book. There are no positives about Walmart that can be concluded from the Chilean Atlantic salmon farms, or the countless companies mentioned in the book that went belly-up after becoming a supplier of Walmart. There’s just too many examples to list. And it’s quite obvious that even the large companies that work with Walmart are under the control of Walmart.

There are some interesting stories in the book. The one I like best is about the company that decided supplying to Walmart was detrimental to its future existence, so it decided to end the relationship. However, Fishman argues that companies that don’t supply to Walmart are highly affected by them anyways because of the devastatingly low prices. Another interesting tidbit was that Fishman believes Walmart may hit a ceiling at some point and there could be, what he calls, Walmart saturation and exhaustion.

VERDICT

This is a very insightful book. Although there are only a few unbiased and encompassing studies on the Walmart effect, Fishman does a good job of investigating and doing his own research. This book sums up my initial motivation for reading  about the world’s largets non-oil company. Walmart is such a dichotomy it’s really difficult to come to a conclusion on whether it is good for society or bad. It has changed so much of everything that it is beyond anyone’s control. Many of the numerous statistics in the book are downright unbelievable. The book is a quick read, very interesting to read and will make you think twice about globalization and also your personal moral responsibilities to it.

The book was written in 2006 and only talks about the perceptions and actions of Walmart in the context of 2005. The major views of Walmart has not changed since then. However, the signs of Walmart exhaustion have gone out the window now that we are in a recession and most people have turned even more to Walmart for cheap prices. Walmart also has done more to improve the negative perception against it. Just a few days ago Walmart announced that they would be awarding $2 billion dollars to their employees. If Walmart decides to also target the higher end products, like Target, this might create a whole slew of new problems.

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Rating: 9 out of 10 Walmart smileys


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A Letter to America

Posted by silentarchimedes on November 3, 2008

Dear Fellow Americans,

The land of the free and the home of the brave...

The land of the free and the home of the brave...

Tomorrow is one of the most important days in recent American history. It is a day that will affect the short term prospects of America and the standing of America in the world for the next century. The events and actions of the past eight years have accelerated the damaging path the country has embarked on for the past thirty years. The irresponsible actions have left America crippled economically, politically, morally and psychologically. Both parties have been hijacked by the special interests of corporations, ideological groups and personal interests. The values in which America was founded on have been distorted. The decision made by America tomorrow will go a long way in determining if we continue this egregious path of self-destruction.

The debt at the national, local and consumer levels are not only due to the actions of the past eight years. The decision by the Supreme Court in 1978 (Marquette National Bank of Minneapolis vs. First of Omaha Service Corp.) to deregulate interest rate caps at the state level was the precursor to the inundation of credit cards and the mortgaging of personal futures for the present. Although Reaganomics has been credited with bringing the country out of the vitriolic stagflation of the late 1970s, it has had a long term effect that has eaten away at the fiscal responsibility of the federal government. At the core of Reaganomics was reducing tax rates by reducing government spending which in turn was achieved by reducing costs associated with regulation and social programs. However,  unexpected costs from the burgeoning Cold War resulted in large trade and federal budget deficits. In order to cover such deficits, the government began borrowing heavily both domestically and abroad. This decision to mortgage the future of the country for the present instilled a belief that debt is good, even to other countries, such as China, Japan and India. America became a borrower nation instead of a loaner nation, which it had been for decades during its prominence.

The deregulation of these two critical issues are the main causes of the current economic problems. It instilled bad habits at all levels of society. Although quality of life continued to increase the past thirty years, it was mostly at the cost of the future. Both politicians and individuals began feeling entitled to such luxuries and expected it to last forever. However, as analyzed by Pulitzer Prize winner Jared Diamond (Collapse: How Societies Choose to Fail or Succeed), it is this infectious mindset that causes great societies to fail. This country is at that critical juncture. Do we reinstate the values, sacrifices and hard work that made this country great or do we continue down this destructive path?

In addition to the present economic and ideological problems that endanger the quality of life of America, there are many massive elephants in the near future that can derail any sense of comfort in the nation. A fundamental restructuring of social programs like Social Security, Medicare and Medicaid is required in the next one or two presidencies before the effects of the baby boomer population cripple the flow of aid from the system. The high quality of life has left Americans lazy, fat and indifferent, and the medical costs associated with treating related diseases and health issues threaten to destroy the already broken health-care system. The super-highway system that supported the rise of American power is also the bane of the country’s dependence on foreign oil and its lavish automobile lifestyle. Furthermore, the infrastructure of America is crumbling and poses a danger to the lifeblood of a large country like America. A massive government infrastructure initiative is required within the next twenty years. The only question will be where does all the money come from? As globalization continues to redistribute the wealth and power of the world, the education system and America’s ability to compete are also being tested. American children  continue to fall behind other countries at all levels of education, from middle school to college to graduate school. This country has been able to sustain its technological competitiveness partly through the immigration of top-level students from countries such as China and India. However, the current backlash on immigration coupled with the increasing prestige of other countries’ higher education systems, begs the question of how America will sustain its technological edge? Corporations and special interest groups as super-humans continue to eat away at the fabric of America. Their selfish narrow-minded view of profit and ideology permeate all levels of society, from individuals to the government. Ideology has especially polarized the country into two hardened stances, secularity versus ideology. The effects of this has left the country fearful and suspicious of each other. Finally, the effects of the internet and other entertainment-related technologies cannot be understated. Although they have created luxuries beyond anyone’s belief and increased the free flow of information, they have also created a schizophrenic society of 24 hour media frenzy and questionable freedoms of morality. The neutrality of journalism and the mental well-being  of society are at stake. Coupled with the constraints of global warming and moral responsibility, the above problems must be faced responsibly.

These problems will definitely be difficult to face and resolve. Most of these have been simmering for years, but have been effectively ignored. However, what has always made America great has been its ability to come together as a country and sacrifice for the greater good of the country and the world. The sacrifices by this country during the Civil War and World War II for the greater good cannot be forgotten. Although society was simpler and less polarized then, the country must come together once again to face the unprecedented wave of issues that threaten to send America down the road of self-destruction.

Tomorrow begins that choice. Tomorrow the country decides which path to take, one of sacrifice for the greater good or one of continued wantonness. Tomorrow begins the day where America can begin reinstating the values that made this country so great. A country of uniqueness not found anywhere else in the world. A melting pot that protects individual rights and helps others at times of need. A constitution so strong that the thought of a revolution is unfathomable. The land of opportunity and openness. A land of thousands of parks and natural resources. The separation of church and state and the freedom of religion. The land of the best medical care and higher education system. A land of tolerance and hope. And the land of the free and the home of the brave…

Whomever you vote for tomorrow, please think openly and clearly. Without any bias of age, race, religion, and fear, think who will be better for America. Who will lead America towards a path of redemption and strength. A path that requires sacrifice but cherishes American freedoms. A candidate that realizes that what America needs now is a problem solver with pragmatism and humility, and not one fixated on idealism, intolerance and fear mongering. Look closely at your choice, and know that when you go home afterwards, there will be a better America tomorrow. A better America for yourself and your family, and also for its great citizens of today and tomorrow.

America’s tomorrow begins now…

Thank you.

Silent Archimedes

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