Wal-Mart: The Face of Twenty-First-Century Capitalism

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A group of intellectuals tackle America's giant.

On average, every minute almost 10 000 consumers visit an American Wal-Mart store. It is the largest private employer in the United States and Mexico and operates stores in eight different countries. There is no denying the ubiquity of the corporation in our everyday lives and the significant role that it plays in determining the future of our world economy. Nelson Lichtenstein attempts to explore the profound influence as well as the humble beginnings of this multinational giant in his collection of essays, Wal-Mart: The Face of Twenty-First-Century Capitalism. Lichtenstein, a professor of history at the University of California Santa Barbara, assembled the diverse group of scholars to compare their perspectives on Wal-Mart and the "global manufacturing-transport-distribution chain in which that corporation is the largest and most significant link" (x). The common theme that is expressed throughout the book is that Wal-Mart has become the template for twenty-first-century capitalism. While all of the contributors may agree on that aspect, their opinions deviate on whether this template is the source of a capitalist revolution or demise. Although each essay is written independent of each other, they are broadly organized into three sub-themes: History, Culture, Capitalism; A Global Corporation; and Working at Wal-Mart. These three themes aim to explain Wal-Mart's phenomenal rise to the top, and their strategies to remain there.

Wal-Mart's ruthless ascent to the top is as much attributable to favourable timing and location as its charismatic founder, Sam Walton. The first Wal-Mart discount store opened in Bentonville, Arkansas in 1962 with a simple concept; generate high inventory turnovers using low markups. In order to maintain low markups, Walton realized that it was absolutely necessary to keep labour costs at a minimum. Fortunately, the New Deal and civil rights revolution had not been firmly established in Arkansas which meant that Walton could play around with minimum wage laws. Moreover, thousands of men and women were desperate for jobs after the agricultural revolution, which made farming more capital intensive. As the years went on, Wal-Mart capitalized on events such as the failure of unionization in Arkansas, Reaganomics, and NAFTA to keep costs low. While other discount retailers and the dominant corporation of the time GM suffered from rising wages, Wal-Mart actually saw their real wages decrease in the years after 1970. This is nothing out of the ordinary as Wal-Mart has built an empire based on being different and trying new techniques to increase efficiency. As Wal-Mart grew, it tirelessly searched for innovative technologies to implement in order to improve their economies of scale. For example, the use of communications technology reduced management costs and allowed Wal-Mart to expand while still being able to micromanage each individual store. It was evident that Wal-Mart was changing the way retailers conducted business. It was only a matter of time before Wal-Mart took over the rest of the world.

For years, retailers were forced to accept the manufacturer's prices if they wanted to do business. The emergence of Wal-Mart shifted the power towards retailers because manufacturers were fighting to get their products on Wal-Mart (cont'd at http://kevindilee.blogspot.com/2010/05/book-review-wal-martl-face-of-twenty.html)

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