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.
