Please
read this thorough and extraordinary
article from Fast Company entitled The Wal-Mart You Don't Know. If its
length discourages you, read the following excerpt (emphasis
mine), and you'll want to go back and read the rest:
If Levi [Strauss] clothing
is a runaway hit at Wal-Mart, that may indeed rescue Levi as a
business. But what will have been rescued? The Signature line--it
includes clothing for girls, boys, men, and women--is an odd departure
for a company whose brand has long been an American icon. Some of the
jeans have the look, the fingertip feel, of pricier Levis. But much of
the clothing has the look and feel it must have, given its price
(around $23 for adult pants): cheap. Cheap and disappointing to find
labeled with Levi Strauss's name. And just five days before the cheery
profit news, Levi had another announcement: It is closing its last two
U.S. factories, both in San Antonio, and laying off more than 2,500
workers, or 21% of its workforce. A
company that 22 years ago had 60 clothing plants in the United
States--and that was known as one of the most socially reponsible
corporations on the planet--will, by 2004, not make any clothes at all.
It will just import them.
 The article brilliantly describes
what I call the 'Wal-Mart Dilemma', which is represented by the cycle
diagrammed at right in red.
The intervention in blue that can stop this 'race to the bottom' is
anathema to 'free' traders. It says simply that if a product can reasonably be produced
domestically, then duties and other regulations should be imposed to
protect domestic producers. In other words, the alternative to 'free'
trade is not no trade, but
rather regulated trade,
regulated to protect the economy and social fabric of the regulating
country. That switches the cycle shown in red to the
cycle shown in green.
Of course, it's not all black and white, or we would have resisted the
globalization extremists and wouldn't be facing this dilemma today at
all. In the red vicious cycle, the seduction is:
- lower prices 'every day'
- low inflation
and the downside is:
- low wages
- low product quality
- high unemployment
- high poverty levels
The green cycle also is not perfect. Its seduction is:
- high wages
- high product quality
- lower unemployment
- lower poverty levels
and its downside is:
- higher prices
- higher inflation
You pays your money and you takes your choice. In my biased opinion,
the vast majority of people are ahead with the green cycle, and the
very rich few are ahead with the red cycle. Guess who's lobbying and
bribing governments for untrammeled globalization and 'free' trade?
Contrary to what most of us are taught in school, modest inflation is the
single most effective way to painlessly redistribute wealth from the
rich to the poor, because it allows debts to be repaid in 'cheaper'
future dollars. There are environmental and social advantages to the
green cycle as well. The use of slave labour is discouraged. Lax
environmental laws in third world countries are not exploited as much.
And if
the red cycle gets out of control (some would argue it already has), a
possible consequence is deflation,
a terrible
threat to the whole economy that we need to avoid like the plague.
The answer is not to blame
the Wal-Mart shopper for buying imported goods there, because in the
vicious red cycle it's all they can afford -- they're paradoxically
forced to perpetuate the cycle and sustain their own and others'
poverty. And the answer is not to blame Wal-Mart either: They're doing
what their corporate charter dictates, using their immense buying power
(they sell a quarter trillion
dollars worth of goods each year) to increase earnings per share, and
in the process they have introduced some unarguably beneficial
innovations into their, and their suppliers', business processes.
The answer is to recognize that 'free' trade laws need to be limited to
goods and services that cannot be reasonably produced domestically, and
pressure politicians to reimpose duties and other regulations on those
goods and services that can. That alone would move us from the red
cycle to the green, and halt the race to the bottom that threatens our
nations' very social fabric, and benefits only a handful who are rich
enough already.
|
MADE IN CANADA
trust your
instincts 
