December 11th, 2006

ozarque figure

Defending Wal-Mart; part four (final); changing keys...

I have enjoyed this discussion of Wal-Mart tremendously, and I thank you for participating. I don't think that if we went on discussing it for the next six months we'd get anywhere near consensus. (And that's fine.) What I'd like to do is change keys here and tackle the issues that in many ways undergird the whole Wal-Mart phenomenon and that you've been bringing up repeatedly: that is, I'd like to discuss the tightly-linked issues of outsourcing and globalization.

For the next three weeks I'm not going to have the time to devote to the discussion that I usually do, because not only do I have all the holiday festivities to prepare for, and the three January/February newsletters to write, I've just learned that we're going to have guests this Friday. That's wonderful; they're beloved relatives that we rarely get to see. It's a welcome chance for some time with them, and an extra and unexpected gift for our holidays. It will also slow down my blogging a good deal. But that's all right; we don't have any deadlines to meet here, and I suspect that most of you are as busy (or busier) than I am. We can take our time.

Remember: Economics is not my field. That said, my personal perception is that globalization is inevitable (as strangestgirl says in the comment I quote below) and that outsourcing appears to be one of its pillars -- thus also inevitable. I don't, myself, see any way to morally justify the "Western" lifestyle while millions of other people on this planet are without even such survival necessities as safe water to drink. If we weren't aware of the situation, it would be one thing; we are aware of it, and it's our own technology that has created that awareness. It seems to me that we have to find a way to manage ourselves as a world -- as Terrans; because we're not very good at managing ourselves even on the scale of a single household, I think we're going to flounder about abominably and that it's going to be a messy process. It seems to me that discussion would be useful, and I know that I will learn from the things you have to say.

I want to quote the comment I mentioned, and then I want to quote something else. Here's the comment, from
strangestgirl:

"I think I'm one of the few people who doesn't get worked up about Wal-Mart's hiring/staffing practices. In my opinion, it's the price of globalization -- which is inevitable. I'm always amused on the news to hear about the shock of people working for less than a dollar a day, because no one seems to take into account their local economy. Furthermore, to bring the economies of those countries UP, it's inevitable that the economy of the US will drop -- in order to accommodate the costs. *shrug* In a market economy, it is the role of the business to make money for its shareholders. I may not like how they do it, but it's their job to do so... (And universities are businesses, just like anything else. ;))"

The something else I want to quote from is Kirkpatrick Sale's excellent book Human Scale; it came out in 1980, and I have been going back to it year after year ever since. On page 26:

"The crises of the present... have now grown so large, so interlocked, so exponential, that they pose a threat unlike that ever known. It has come to the point where we cannot solve one problem, or try to, without creating some other problem, or a score of problems, usually unanticipated. Then we are suddenly faced with the task of coming up with new solutions without enough time to figure out their consequences, and when we hastily put that solution into effect, it goes on and creates another set of problems. That is the double bind... the paradigmatic condition of our age."

And on page 348 (quoting economist Mancur Olson, Jr.):

"Unless the number of individuals in a group is quite small, or unless there is coercion or some other special device to make individuals act in their common interest, rational, self-interested individuals will not act to achieve their common or group interests. ... If the members of a large group rationally seek to maximize their personal welfare, they will not act to advance their common or group objectives unless there is coercion to force them to do so."

Human Scale is devoted to explaining why it is that the larger the number in the group, other things being equal, the smaller the gains will be for the individuals in the group, and discussing the problems created by that situation. I heartily recommend the book.

Finally, I have one last Wal-Mart article to recommend, one that strikes me as a useful modulating mechanism: "Global Fishiness," by Charles Fishman -- an excerpt from The Wal-Mart Effect -- at http://www.salon.com/tech/books/2006/01/23/walmart_effect/index.html .