The High Cost of Wal-Mart Bashing:
An Exercise in Critical Thinking

The documentary called "Wal-Mart: The High Cost of Low Price" came out yesterday with much fanfare. I can understand being against consumerism, the braindead buying of things. I appreciate being against corporatism, and all special privilege bestowed by State. But being rabidly against a successful and productive firm because of its efficacy is alien to me. Someone's value system is warped. Ayn Rand warned me of people like this.

There was once a retail giant, massive and invincible, the biggest in America. But Sears Roebuck is now just another retailer, its dominance in the mail-order catalog day long forgotten. No doubt some called Sears a monopoly in its heyday, just as some so designate Wal-Mart. But we know that Wal-Mart has plenty of competiton, from Target and Costco to small specialty stores. We know there are virtually no barriers to entry in retail sales. The claim that Wal-Mart is a monopoly is ludicrous.

Basically the documentary is bad propaganda, which makes it good for honing our critical thinking skills. The first sequence is about a family which used to own a hardware store. Unable to compete with Wal-Mart's lower prices, they went out of business. It's a sad story from the family's point of view, but nothing lasts forever, especially in the market. That's freedom, brother.

The documentary tells other sad stories of people who couldn't attract customers as well as Wal-Mart. The conclusion, not explicitly stated but abundently clear, was that Wal-Mart is bad for small business. Are you suspicious? Do you see the fallacy?

Here's a hint: Many small businesses do quite well, especially the ones in the vicinity of a Wal-Mart, and/or offering things that Wal-Mart can't, like extra personal service or expertise. Sure, many people choose to use brand names or internet comparisons, and can buy cheapest at Wal-Mart. But others want the added-value services. The customer rules.

The fallacy here, and repeated again and again in the documentary, is the fallacy of hasty generalization. That's "biased sample" to you statisticians. There are colorful names for types of hasty generalizations, such as cherry-picking, leaping to a conclusion, and spotlight fallacy. We see cherry-picked towns which lost tax revenue after Wal-Mart moved in, disgruntled employees, and even a parking lot rape. All with the impression that these are typical rather than exceptional.

One technique used in the film to cover the hasty generalization is to show a seemingly long list of instances. Less discerning viewers may forget that Wal-Mart is a vast operation with many stores and distribution centers. For example, the film shows a long list of law suits. Later, it displays a list of parking lot crimes. Critical thinkers might prefer knowing the number of crimes per space per year, and how that compares to other parking lots, government and private.

This brings up a second technique: to scrupulously avoid meaningful comparisons. Is that a high crime rate compared to other parking areas? Are there more employee disputes than at other firms? How do wages, benefits, and number of employees on welfare compare with other firms with similar employees? Are they more or less than at McDonalds or Target or Costco? When the film-makers make a big deal about the amount of government aid to Wal-Mart employees, why don't they tell us how much aid these employees received before they worked at Wal-Mart? Answer: Federal aid to these people went *down* after they got jobs at Wal-Mart, as one would expect. The documentary's claim that Wal-Mart costs the government (in increased welfare expenditures) does not follow, and is in fact false.

Some parts of the documentary were rather funny to this Arkansas hillbilly. The sequence about the wonderfulness of unions, and how Wal-Mart ought to unionize, might be believable to those city folks who think Western Civilization was union made. But people around here have never needed or had much use for unions. A union is just another voluntary organization, like a corporation, except perhaps even more likely to buy favors from ruling politicians.

I caught two instances of the audio contradicting the video. In a sequence about how awful conditions are in foreign factories which supply Wal-Mart, the picture shows a well-lighted, clean area that, frankly, looks a whole lot better than a Washington County canning company where I used to work. In another sequence, a yuppie woman in her half-million dollar California house tells how the Wal-Mart planning to build near her upscale community would be a blight, and ruin her neighborhood. The picture then shows the proposed building lot, an ugly treeless paved junkyard area that looks like a war zone. She prefers that to a nice Wal-Mart?

Giving the film it's due, it does point out some bad conduct done by Wal-Mart people. There exist Wal-Mart stores that have polluted negligently. There have been disputes with employees, and sometimes the employees were right and Wal-Mart wrong. That said, it utterly fails to make a cogent case that Wal-Mart has more bad conduct than would be expected for an operation that large and widespread. The bottom line: "Wal-Mart: The High Cost of Low Price" is a rather brainless anti-market rant. The only good reason to see it would be to exercise your critical thinking skills. If you do see it, then for balance you may want to check out another documentary entitled "Why Wal-Mart Works & Why That Drives Some People Crazy." It tells the other side of the story.

Hogeye Bill
11/13/05