The Capitalist as hero: The virtue of Walmart
We should reflect on the beauty of a capitalist system which allows a man like Sam Walton to go from humble beginnings and create huge value for the world through employment, lower prices and more choices
Ninety-five years ago today Sam Walton was born. Walton was the founder of Walmart, the chain of discount department stores which is the third largest public corporation and the largest retailer in the world.
Walton came from humble origins. He was born on a farm in Kingfisher Oklahoma. Living through the great depression, he held a series of odd jobs to contribute to the family budget. He worked his way through college and in 1942 joined the US army intelligence corps.
After the war, Walton decided he would purchase his very own store and start his own business. With a loan from his father in law and his own savings, he bought a Ben Franklin variety store.
By 1962 Walton owned 16 stores and on July 2nd 1962 opened the very first Walmart in Rogers Arkansas. Walton was an innovator who bucked the trend by placing the majority of his stores in small towns rather than cities. His company used its own trucking service to deliver goods to stores which were located nearer the regional warehouses. The growth continued, with 190 stores by 1977, and 800 in 1985.
By the time of his death in 1992 Walton left a company with 1,735 stores with annual sales of nearly $50 billion.
Walmart is still a vast and successful company that has changed the lives of ordinary Americans for the better. Walmart’s advertising slogan today is "saving people money so they can live better lives".
These are not just slogans but reality. Global Insight found that between 1984 and 2006 Walmart had delivered prices that meant food-at-home prices were 9.1 percent lower and that overall prices were down 3.1 percent.
The Pulitzer Prize winning columnist George Will has stated that: "Walmart and its effects save shoppers more than $200 billion a year".
Not only this, but it has been estimated that Walmart’s effects on prices accounted for around 12 percent of the US economy's productivity gains in the 1990s.
There have been numerous critics of Walmart advancing arguments that Walmart’s lower prices destroy jobs and that their workers are paid low wages.
Firstly, if customers are paying lower prices for many of their basic goods such as food, clothing, medicines etc. this means they have more money to spend on other goods and services allowing expansion in other areas of economic activity.
Might this result in a small retailer going bankrupt?
It may well do and if it does whilst it is a temporary problem for those who immediately lose their jobs it is a benefit to the wider economy. Of course no one with a vested interest likes competition. The small retailer would rather it had no competition and could charge whatever it wished to its customers. Whilst this may be good for the individual retailer the whole community suffers by paying higher prices and having less income to buy other goods.
No one is forced to work at Walmart. It is a voluntary exchange. If someone chooses to work there then working at Walmart was better than their next best option. If Walmart is paying its workers too little and not providing enough benefits for what their workers are worth then their workers will find better employment elsewhere as many do when we consider the fact that 70 percent of its employees leave within one year.
The cry that Walmart is indifferent to the wants of small communities is another absurd charge. Local people, when given the choice, opt for the lower prices and wider choices that Walmart provides over their local retailer. Many in the local community decide to go and work for the company themselves.
Walmart does a great amount of philanthropic good in the communities where it locates its stores. In 2004, Wal-Mart gave $170 million to charitable causes, 90 percent of which went to communities in which it had located its stores.
Many of those who attack Walmart point to its huge profits and complain that it is not giving its workers a better deal. In 2005, the company made a $9 billion profit. This is a lot of money, but in reality represents a profit margin of less than 4 percent.
Sam Walton’s legacy is one which should be admired by all. Walmart today employs 2.2 million people world-wide and has provided the poor, and middle income earners with a vast array of choices and products at prices they can afford.
Whilst no Institution especially one the size of Walmart is perfect we should reflect on the beauty of a capitalist system which allows a man like Sam Walton to go from humble beginnings and create huge value for the world through employment, lower prices and more choices.
Sam Walton is not just a titan of industry, he is a titan of morality.
Which person did more for the world, mother Theresa or Sam Walton?
When one looks at the facts, it is indisputable that Walton did more for good for the world. In terms of morality many, probably most would say mother Theresa was more moral because she sacrificed and suffered so she could help others.
In my own view Walton is the more moral character precisely because he did not sacrifice, instead he created. He made the world a better place by pursuing his values and his creation and became rich in the process. It should always be remembered that in order to give something away someone has to produce it.
It is entrepreneurs like Walton not politicians who make our lives on this earth better, and they do so without the use of coercion or violence but by voluntary exchange. It is not the speeches of politicians that should inspire us about the greatness of humanity but the words of men like Sam Walton:
"We’ll lower the cost of living for everyone not just in America but we’ll give the world an opportunity to see what it’s like to save and have a better lifestyle, a better life for all. We’re proud of what we’ve accomplished and we’ve just begun".
Guy Bentley is a Libertarian blogger and a former editorial assistant at the Commentator
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