Walmart: moving the world forward

Everyone knows Walmart and companies like it are, at best, destroyers of quaint communities, and at worst, heartless enslavers of the world’s producers and consumers, right?

After all, that’s what we’ve always heard in public schools, on public radio and most everywhere else in the public sphere for as long as we can remember.

People often acknowledge that such companies provide jobs for millions and inexpensive goods for most everyone, but, somehow, that tends to be beside the point.

I was reminded of the widespread ignorance of the good Walmart does in the world when I read an article in the Wall Street Journal earlier this week.

The story discussed Walmart’s recent bid to purchase South African retailer Massmart, a big-box outfit that operates in 13 African nations.

Interestingly, the article focused primarily on the dynamics of the potential deal and the history of Walmart’s similar efforts around the globe.

It did not focus on what almost every other story regarding sub-Saharan Africa focuses on, namely the widespread poverty, disease and political upheaval that plague the region.

The most striking phrase in the whole piece was “the potentially lucrative sub-Saharan market.”

Imagine that — thinking of that region as being populated, not with pitiable wretches in need of the developed world’s help, but with potential customers, employees, investors and trading partners.

I found this interesting because it highlighted two important facts: First, Walmart is interested in this venture because of the opportunity it offers for increasing profits and market share, and second, this selfish action on the part of Walmart is almost certain to benefit the people of southern Africa enormously.

Now, it is probably obvious that the first of these facts is accurate, but I am just as certain that the second fact is accurate as well.

Why? Because Walmart will only profit from this acquisition if it delivers goods to its consumers that are of a sufficiently high quality and a sufficiently low price, as it has done in the United States and elsewhere in the world for decades.

All of this brings to light an important difference between entities such as Walmart that are profit-driven and entities such as governments and charities that aren’t.

Whereas Walmart seeks primarily to maximize its profits and does so by fulfilling the desires of those with whom it does business as efficiently as possible, nonprofit entities seek to do good by assessing needs and wants through means that are far less accurate than the profit-and-loss system.

The nonprofit way of doing things might result in good outcomes on occasion, but, especially in the case of government entities, it rarely provides a strong incentive to discontinue activities that lead to bad outcomes.

Additionally, the nonprofit approach is much more oriented toward merely alleviating suffering and putting people on par with their peers than it is toward facilitating enjoyment and creating things that will make life more comfortable for everyone in the future.

That is, governments and nonprofit organizations can certainly do things that make life better, but such actions typically consist of removing barriers to enjoying life as it can currently be enjoyed, not creating pathways to enjoying life as few have yet imagined it.

I’m glad various nonprofit entities are concerned about bringing the quality of life in sub-Saharan Africa up to modern standards, but I’m not going to hold my breath waiting for them to develop the products and technologies that will push modern standards toward the levels we hope to enjoy in the future.

For that, I’ll be looking to the evil profit seekers and their big-box standard-bearer, Walmart.


E-mail: jarlower@indiana.edu