We’ve been talking about big business and monopolies for the past week and Wal-Mart has come up a few times. I found a very interesting video (from a liberal source) that does seek answers from both sides of the issue (Wal-Mart represents itself). You can read the transcript or stream the video. I’d suggest you watch the video to get the full picture. Is Wal-Mart a monopoly? What are the consequences if it is? I think looking at big business at the turn of the century is really important and it’s equally fascinating to contemplate this right now in the present moment. I’m eager to here your thoughts.
http://www.democracynow.org/2005/11/18/a_debate_does_wal_mart_work
p.s. thank you so much for all of your thoughtful comments on the last blog check-in. I was the last to respond.
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27 comments:
For some reason the video won't work... Any one else have that problem, if so anyone know what we should do?
-Nick Berman
The video didnt work for me either but i read it anyway. I guess since no one else commented ill just make one comment instead of two.
There has always been a moral dilemma in business. As a businessperson you are not required to follow good ethics or morals, in fact dishonesty can be argued as the inherent nature of business. For example, the CEO of general motors moved his factory from flint michigan to mexico in attempt to pay cheaper wages for employees in the 80's, leaving everyone in flint unemployed. Is this morally just?of course not, but is it allowed? yes. Reading the article, i feel bad for the way wal mart employees are treated and i completely disagree with it, i think they are even disgusting. However, Personally i think the point of a business is to not only make a profit but to also to help out a community by providing jobs and security. If i ran a business id treat my employees well,however one should still not blame walmart because they're the ones who are in control, the head of the company is in charge of the business, not the employees. It is not walmart's fault that their employees cannot find better jobs. Thus, despite the fact that I thnk Wal-mart is almost evil in the way they treat their employees i wouldnt consider monopolies like Wal-mart bad because all they are doing is abiding by the rules of capitalism. They may be immoral, but for the most part they are not illegal.
that was cary
I will come out and say what I have to say from the get go. Monopolies are bad. They are bad for the people, they are bad for the economy. Economically, horizontal integration monopolies are terrible- they lead to one company, by controlling one stage of a product, are able to control the product itself, and force prices sky high to turn a massive profit, through price gouging, while the money skimmed off from the gouging rarely fully reenters the market. The invisible hand of the market is supposed to work because supply and demand come to a balance at a specific price. However, with one corporation in total control of supply, and with many products necessary to survival (food, electricity in the modern age, oil, heat), the balance is never achieved- the monopolizing corporation need neither compete with its peers or consider the demand of the people. With only one seller, it will always be a sellers market, and the people will get hurt. Such a monopoly also hurts the work market for much the same reason-- skilled workers only have one place to turn. Vertical integration has proponents, who say that it leads to drastically reduced prices. However, simply reducing prices is not enough to make an idea good for the economy. Once again, there is far, far less work, and so what work there is goes for far less pay. Upward mobility becomes utterly nonexistant. All semblance of equality of opportunity, which is one of the supposed advantages of a free market, goes out the window. Prices are POSSIBLY far lower, although the leverage gained allows a corporation to do as it pleases, while the amount of jobs and their income goes drastically down. Although monopoly is the logical extension of a free market, it procludes any possibility of equality of opportunity in the market in the future, making a true free market no longer attainable, as success is no longer based solely on merit. The free market in and of itself is not a justification for monopoly; a free market is only an advantageous system when equality of opportunity can be assured. the purpose of government, of the United States government at least, is to give its citizens equal opportunity, to protect the right to pursue happiness by ensuring that for everyone happiness can be pursued. It is morally reprehensible for the United States to ignore its obligations and allow monopolies to keep existing. The concepts of the veil of ignorance and the original lottery serve as proof enough that people are deserving of equality of opportunity; before society there was no way of knowing whether we would be born into a household where we would have a chance- rationality would dictate that we would strive to ensure that we could fulfill our potential no matter what. Monopoly thus goes against rationality itself. Looking to WalMart itself: WalMart functions as a vertical monopoly, and it uses predatory practices to ENSURE that that both workers and consumers have nowhere to turn but to it. A walmart will move into each of four towns, and with its reduced pricing, a result of vertical integration, drive nigh all other businesses in the town out of business, forcing consumers into dependency on Walmart for many of their needs. In addition, the town, having lost many of its storefront businesses, depends on walmart for jobs, and Wal-Mart, in a position of nearly infinite leverage, forces its workers into substandard conditions and pay, to the degree that Wal-Mart staff are taught how to collect food stamps. Finally, just for the "higher goal" of profit, the Wal-Mart in each of the 4 towns, having total monopolies, will close, and a megamart will be opened in between the four, capitalizing on efficiency while crippling the dependent towns for years to come. This can hardly be called just, and it is not good for any economy except Wal-Mart's own. The company has put aside morality for capital gain, and to let the lack of morality slide is as unjust as their being immoral in the first place. For the sake of the people, for the sake of the economy, for the sake of its own legitimacy, the US government ought to step in to prevent monopolies, especially those as predatory as WalMart, from ever occuring.
Cary-- just because something is "allowed" does not make it acceptable. For years women's and minorities' rights were next to nothing, and to pay them far less for far more work was considered acceptable. Even today this practice continues to a degree, although it is no longer "accepted" by the institution. You say that as a businessperson you are not required to follow good ethics or morals; there are several reasons that is flat out not true. First, being a businessperson does not opt you out of being a human being, and as a human being you have an obligation to be moral. It is for this reason that immorality is not "accepted" by the community, although it may be "accepted" by the government. Further, as I discussed above, in many cases it IS walmart's fault their workers cannot find better jobs-- utter monopoly cuts off upward mobility. The heads of WalMart, the Walton family, have a personal obligation to act morally, and much as they try to hide behing their corporation, their acts are their own. This gets to the main problem in corporationism- it frees people to think only of stocks and have no personal concern about the moral atrocities that the company they own commits-- it is a tragedy of the commons, in which noone is willing to own up to what the masses are doing. Just because something is legal does not make it good, just or moral, and monopolies are none of those.
I think it is unconscionable that a multi-billion dollar corporation can bring in huge profits and not provide health insurance to their employees and their families at a reasonable cost. It makes me very sad to read how one employee had to decide between buying a necessary medicine for her child or just giving the child an aspirin because the prescribed medicine cost $70. Clearly, this monopoly is not working out to help the common folks; it is just bringing in huge revenues to those who need it the least. Greed is never good, especially on the corporate level. Wal Mart provides jobs, and in return the employees provide a loyal service. Wal Mart could not function without its employees, and the employees could not subsist without Wal Mart. So this relationship should work for both sides, but Wal Mart takes advantage of their work force. Unfortunately, Wal Mart employees are mostly unskilled laborers (as we learned in our history book, they are easily replaced), so Wal Mart does not care if they quit. These people are human beings, deserving of respect and fair treatment, and clearly the Wal Mart corporation does not care!
In response to Cary, the rules of capitalism do not encourage big business to take unfair advantage of employees. Yes, they may not be breaking the law, but there is also ethical morality in our society, and I believe that is just as important. Wal Mart can be capitalistic, enjoy reasonable profits and still be fair to their employees. For example, Costco is a multi billion dollar retail corporation which enjoys reasonable profits and provides excellent employee benefits including health insurance. Big business can work under a capitalistic model when management cares about their employees.
Aw man... I'm posting really late, and I'm a little out of it.
Anyhow, I'm sure from the big business owners' points of view, monopoly is a pretty good thing, but I tend to oppose the idea. Aside from the fact that I've always been a supporter of Mom & Pop businesses/shops, I'm just plain uneasy with giving any one entity so much power over the market. Economic issues aside, if there are policies or practices that a company put into play and I don't agree with them, I don't want to have to support them because I don't have any other options. Also, Wal-Mart employees are treated pretty poorly, and I fear that similar big businesses simply attract those desperate for jobs and do not treat them correctly. Of course, I suppose this depends on the company. Furthermore, it pretty much destroys the concept of a free market, doesn't it? I don't like the idea of having to depend upon one source.
- Phoebe
What Wal-mart is doing to their employees is extremely immoral. Wal-mart is further ruining their image by creating lies to cover up their shady business transactions/plans.
"In March Wal-Mart agreed to pay an $11 million settlement after immigration agents raided 60 stores and arrested 245 individuals working illegally."
But then "Wal-Mart has blamed a subcontractor for hiring the undocumented workers."
It is not a coincidence that 60 stores had a subcontractor hire illegal immigrants for jobs in eachstore. It is obviously the company's decision.
The illegal workers situation is an example of where the company's immoral ideas can hurt the business, but all that Wal-mart does is settle the lawsuit by paying a sum of money (a tiny amount considering their profits).
As far as their employee's benefits go, it is horrible that they pretty much get the bare minimum.
I believe that the company should hire more long-term employees and give some more benefits to those employees.
On the other hand, however, I believe that in a country like ours, you need different classes.
As ideal as it would be to have no poor and no monopolies, it's going to happen because you need cheap goods and monopolies help the economy be stable.
I really disagree With Wal-mart's business approach, but I don't see it changing drastically anytime soon.
-NICK BERMAN
Walmart is most definitely a monopoly because they engage in practices, such as undercutting competition at a loss, in order to gain an unfair advantage over competitors. Many people believe that because Walmart brings many jobs to a town, but in fact, because they put all the other stores out of business, they lower the number of jobs in an area and end up with a monopoly.
Walmart certainly harms society in more than a few ways - it undersells mom and pop businesses and puts them out of business; it pays employees low wages and gives them few benefits. But the monopoly that is walmart does more good than bad. People of low socioeconomic status can afford products that they would not be able to buy otherwise, and many new jobs are made available for the formerly unemployed. Walmart also employs seniors because they can afford to hire people who might be less efficient due to their lack of competition.
that was harry
alison,
i agree that its unfortunate the walmart does not treat its employees as well as might be just, but for most employees, it is their fault that they are working at walmart. In almost all cases, a youth could study hard at a public school, get into a good college on financial aid, and get a good job. Those working at walmart are not treated as well as successful people because they did not work hard.
-Harry
Cary- I agree with your ideas that CEOs etc of businesses are not required to follow any moral guidelines and this is what leads to the problems that this article brings up.
And Allison,
You said that we must have some sort of morality in our society; however, it is necessary to realize that it is greed that leads to many of the world's problems (such as this one).
If one were to break down many of our World's atrocities: poverty, hunger, crime, racism, etc...
Many have to do with greed..if we weren't so attached to money, we could give more to the poor, we wouldn't need to steal, we wouldn't need to blame others and find a scape goat in other races, and the list goes on...
My only point is that such immorality occurs and cannot be stopped unless by law (such as the Enron scandal (again...driven by greed)).
-Nick Berman
HARRY,
I am very surprised by your comment that it is the people's faults who are working at Walmart...
After seeing the exhibit, discussing it in class, and using some other knowledge, i think it is obvious that it is not the employees faults.
It is this monopoly that has wiped out man smaller stores which could provide more jobs to build one super store which has everything, beats all other prices, shuts other businesses down, and requires less employees. Yes, there are few benefits, but the people you are talking about are in the situation that they are in.
Not everyone in our country can be rich, there must be a class of people working the poorer jobs for poorer wages with poorer benefits. It is not possible to have everyone be rich an noone be poor.
I feel like the people who work at Walmart's other decision at that time is to end up like hte people in the pictures we saw...on the streets...pahandling
The people who worked at Walmart could have done something more earlier in their life, yes...but wouldn't there just be some other people to fill in for their spots?
-NICK BERMAN
The video did not work for me either.
I do not feel that walmart is a monopoly. Other companies still are present that supply the same goods as Walmart. I feel that Walmart has achieved their success fairly and should not be acted against.
However, Walmart does bring into effect some problems that i feel hurt the economy. For one, they knock off all of the "little guys" The little business' that are not able to compete with walmart are forced to shut down. This causes the employers and their wokers to have to find new jobs posssibly at walmart. This causes a snowball efffect that cannot not be stopped. aLSO with walmart comering the market they can offer whatever wages they decide. I think these are two huge problems
-brandon wilton
Cary -
I agree with you on the business principles. It is not a businessman's job to be moral. Life is not about being fair. This is why i feel that Walmart should not be stopped
-Brandon Wilton
I think monopolys are terrible for the economy because without competition they can take advantage of the consumer and the employees. I don't know if i would call walmart a monopoly because there are still other stores around similar to it, but the way they take advantage of their employees is immoral. Walmart's unbelievably low prices are also putting smaller stores out of business because they can't afford to bring their prices as low as walmart. At this rate Walmart may become a monopoly pretty soon and when that time comes i think something will have to be done about it because a true monopoly only helps the people in management and hurts everyone else.
Jonny Meyer
Monopolies are clearly not good. There is absolutely no reason why one company needs to dominate a trade. We should have options as to the products we buy. A sole vendor can potentially increase the prices, and cause helpless buyers in need of the product to spend too much money on it. Without competitors, there is no force to balance the price a company attaches to its products. Sure boycotts and strikes can ensue, but there is no better price controller than competition. Monopolies also stunt growth. Competing companies push each other further, and thus for a healthy market, monopolies must be avoided.
Harry,
I don't think your reply to Allie is very fair. Sure, maybe people who work at Wal Mart did not maximize their posibilities. There are many factors in the equation though, that are unknown to us, and thus it is not fair to judge so bluntly. Nevertheless, even if these workers were lazy in the pursuit of their careers, many of them have children and families to take care of. Certainly it is not fair to doom the offspring of this perhaps idle generation. People who work at Wal Mart already suffer for their failure to attain a better job, as let's face it, working at Wal Mart is no enjoyable experience. Day by day, though, these people go to work and perform long hours, and thus it is only fair that they be treated decently.
I couldn't watch the video, but here's my shpeel:
Monopolies are bad. Why? Giving one person or group of people gives them the ultimate power in their industry. It cuts out competition, which lowers prices and benefits the consumers. This allows owners of monopolies to set the prices to what they want, giving them unfair power.
I have to relate this to America. When the constitution was made, they made a point of not giving all the power to one person (the president). So why should we give all the power within an industry to one person, when an entire industry can greatly affect our country and the world's economy?
Ben also brought up a good point that workers only have one choice to go for employment, which gives employers the power to treat their workers they way the want to, and the workers have to deal with it because it's the only source of employment.
Cary - Just because something is legal doesn't mean it's right or moral. "Just because you can doesn't mean you should" lol.
Alison- morality may be important in society, but unfortunately one must understand that business is directly at odds with morality. The very concept of buying something and then selling it to someone else for more can be argued as immoral. The point is, in a capitalist society like ours, moral standards must be lowered in terms of business, because dishonesty is an inherent quality of business and economics.In fact, i think the that by denying an entrepeneur his/her economic rights to create a monopoly in their industry, the government would be denying a citizen his /her rights as a human being. if a person is smart enough and a good enough businessperson to be able to create a monopoly, good for them.
that was cary
Harry, I don't think that the pros outweigh the cons. You named a few benefits, but while Wal-Mart gives jobs to previously unemployed, it sells out the other businesses in the ares. This leads to MORE unemployment, and these previous artisans probably go to Wal-Mart for jobs. Then they are paid minimum wage with little to no benefits. In essence, Wal-Mart can steal other workers of businesses and put them to work on Wal-Mart's terms.
Cary, maybe instead of thinking of business as "moral," we should think of it as being good for the economy. When you say that any part of business could be considered as immoral, then fine. sure. But monopolies are bad for the economy. It's what Ben said. Even in a true free market, monopolies are technically allowed, they stifle the chances of having a "Free" market, where competition is healthy, and the money circulates instead of recycling in one area.
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