If you love buying cheap salmon from Wal-Mart, you might not after reading Charles Fishman's new book, "The Wal-Mart Effect."
Few issues in American life, except perhaps the war in Iraq, are as polarizing these days as how Wal-Mart sits in our landscape, our economy and our consciousness. Fishman, a friend and former editor but more important, the kind of reporter for whom no detail or decimal is too small to fascinate tells the Wal-Mart story in such intricate detail that you'll never see your local store the same way again.
Wal-Mart isn't just a company. It's a global market force a nation unto itself.
Ponder this: Americans spend $35 million every hour at Wal-Mart, 24 hours a day, every day of the year. Wal-Mart is so huge and so powerful, you'll wonder how you failed to notice that the company affects not just how we shop, but how we think and live even if we never set foot in a Wal-Mart store.
Not everyone has missed the Wal-Mart effect, of course. The company has plenty of critics, but Fishman puts in perspective not just the power of Wal-Mart, but the good that the mega-corporation does and could do. Recently, for instance, Wal-Mart announced energy- and fuel-saving plans for its stores and trucks that, if successful, could serve as a model for the nation. No one will cheer louder than Fishman if that happens. Such is the kind of global good Wal-Mart can and should do, he says.
On the home front, Fishman argues that critics are wrong when they say that Wal-Mart puts little people out of business. We (consumers) put little people out of business, he says. We vote with our wallets, and we're the ones who choose Wal-Mart over local stores. Wal-Mart, in that sense, is the ultimate model of democracy.
Consumers also have made possible the company's phenomenal growth. In 1990, Wal-Mart had just nine supercenters in the U.S. By 2000, there were 888. Wal-Mart is the No. 1 grocery retailer in the world. Between 1990 and 2000, 31 supermarket chains sought bankruptcy protection, including 27 that cited Wal-Mart as a factor.
Ah well, we say, so it goes in love, war and business. Competition is the engine that drives a capitalist society. But Fishman argues that Wal-Mart's power and scale hurt capitalism by strangling competition.
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"It's not free-market capitalism," he says. "Wal-Mart is running the market. Choice is an illusion."
Wal-Mart not only changes the way we buy, but the way we think, Fishman says. If Wal-Mart charges $5 per pound for salmon, then shoppers wonder why a restaurant charges $15. We expect salmon to cost only $5. Or a microwave to cost only $39. The Wal-Mart effect first changes our expectations, then changes the quality of merchandise, which is cheap, because it isn't always well- or ethically made.
Take salmon. Wal-Mart, which buys all its salmon from Chile, sells more than anyone else in the country and undersells all other retailers by at least $2 per pound. That's a lot of market power, which prompts Fishman to ask: "Does it matter that salmon for $4.84 a pound leaves a layer of toxic sludge on the ocean bottoms of the Pacific fjords of southern Chile?"
Salmon in Chile are raised in packed underwater pens as many as 1 million per farm and fed prophylactic antibiotics to prevent disease. Here's a fact you'd rather not know: A million salmon produce the same amount of waste as 65,000 people. Combine that waste with unconsumed food and antibiotic residue, and you've got a toxic seabed.
Does it matter?
Only if consumers say it does, says Fishman. Wal-Mart listens to "voters." If shoppers say they won't buy salmon until Wal-Mart insists on higher standards from suppliers, then Wal-Mart will make those demands. Incentive is the engine that drives the company that promises low prices "always."
Fishman also raises questions about worker wages, health insurance and working conditions in other countries where Wal-Mart suppliers treat human workers little better than Chile treats fish.
In the final analysis, he asserts that the scale of Wal-Mart makes it a different species of animal than we've ever known before and that, therefore, horse-and-buggy business rules no longer apply. He insists that transparency, which corporations (and especially Wal-Mart) resist, is key not only to preserving the capitalist system we value, but to ensuring fair and humane business practices here and abroad.
Ultimately, Fishman's book posits a question of values: What kind of country are we going to be?
It is a worthy question that consumers will have to answer.