Some of the Benefits of Wal-Mart

Dave Killion — June 3, 2012

During a recent meeting, one of the not-quite-yet libertarian members of the Victoria Libertarian Book Club brought up some accusations against Wal-Mart. Foremost among these was that Wal-Mart destroys local jobs by replacing locally produced goods with less expensive imports, and further impoverishes the community by taking wealth (in the form of profits) outside of the area. Let me illustrate why both of these views are mistaken.

Imagine that I travel regularly between two communities, Chairtown and Farmville. Both are largely self-sufficient. During my travels, I notice that I can purchase a chair in Chairtown for fewer resources (less money) than in Farmville. I buy a chair from Chairtown and take it to Farmville, where I sell it for more than I brought it, but less than a Farmville-produced chair would cost. Of course, the person who bought the chair values it more than the money they gave me, or they wouldn’t have bought it. So the Farmvillian, and by extension Farmville, is wealthier – no matter what I do with the money. Since Wal-Mart does just this sort of thing (albeit on a massive scale), we can see that Wal-Mart enriches the communities it serves by bringing in lower-cost goods.

Now you are probably thinking “Killion, you moron… don’t you see that when you bring in those chairs, the local chair manufacturers will have to shut down? Wal-Mart destroys local jobs and increases local unemployment!” Well, not really. It’s true the Farmville chair guys will be out of work, but over in Chairtown they have a problem. Every moment they now spend making chairs for export is a moment they no longer have to pick cherries, make butter, or grind wheat. But since they still desire these goods, they have to hire someone else to do it for them… and since there are some guys in Farmville with extra time on their hands, they will naturally be put to work cranking out agricultural goods to meet the rising export demand for Farmville products. The lesson: Wal-Mart may eliminate specific jobs in some areas, but it does nothing to lessen the overall number of jobs OR the overall amount of work to be done in those areas.

And that’s the kind of stuff one learns when they join the Libertarian Book Club. Or makes libertarian friends. Or reads libertarian writers. Enjoy.

Comments

missy says

And there’s no place for cheaper cat litter!

— June 4, 2012

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