• Re: Nelson Lichtenstein, *Wal-Mart: The Face of Twenty-First Century Ca

    From Steve Hayes@21:1/5 to All on Fri Jan 7 04:38:12 2022
    XPost: alt.history

    On Wed, 5 Jan 2022 22:58:37 -0800 (PST), Jeffrey Rubard <jeffreydanielrubard@gmail.com> wrote:


    Wal-Mart: A Template for Twenty-First-Century Capitalism

    Nelson Lichtenstein

    Wal-Mart, the largest corporation in the world, provides the template
    for a global economic order that mirrors the right-wing politics and
    imperial ambitions of those who now command so many strategic posts in
    American government and society. Like the conservatism at the heart of
    the Reagan-Bush ascendancy, Wal-Mart emerged out of a rural South that
    barely tolerated New Deal social regulation, the civil rights
    revolution, or the feminist impulse. In their place the corporation
    has projected an ideology of family, faith, and small-town
    sentimentality that coexists in strange harmony with a world of
    transnational commerce, stagnant living standards, and a stressful
    work life.

    Founded less than fifty years ago by Sam Walton and his brother Bud,
    this Bentonville, Arkansas, company is today the largest profit-making enterprise in the world. With sales over $300 billion a year, Wal-Mart
    has revenues larger than those of Switzerland. It operates more than
    five thousand huge stores worldwide, 80 percent in the United States.
    In selling general merchandise, Wal-Mart has no true rival, and in
    2003 Fortune magazine ranked Wal-Mart as the nation's most admired
    company. It does more business than Target, Home Depot, Sears, Kmart,
    Safeway, and Kroger combined. It employs more than 1.5 million workers
    around the globe, making Wal-Mart the largest private employer in
    Mexico, Canada, and the United States. It imports more goods from
    China than either the United Kingdom or Russia. Its sales will
    probably top $1 trillion per year within a decade. Sam Walton was
    crowned the richest man in America in 1985; today his heirs, who own
    39 percent of the company, are twice as wealthy as the family of Bill

    The competitive success and political influence of this giant
    corporation enable Wal-Mart to rezone our cities, determine the real
    minimum wage, break trade unions, set the boundaries for popular
    culture, channel capital throughout the world, and conduct a kind of international diplomacy with a dozen nations. In an era of waning
    governmental regulation, Wal-Mart management may well have more power
    than any other entity to legislate key components of American social
    and industrial policy. The Arkansas-based giant is well aware of this
    leverage, which is why it is spending millions of dollars on TV
    advertisements that tout, not its "always low prices," but the
    community revitalization, happy workers, and philanthropic good works
    it believes come when it opens another store.

    Wal-Mart is thus the template business setting the standards for a new
    stage in the history of world capitalism. In each epoch a huge,
    successful, rapidly emulated enterprise embodies a new and innovative
    set of technological advances, organizational structures, and social relationships. It becomes the template economic institution of its
    age. At the end of the nineteenth century the Pennsylvania Railroad
    declared itself "the standard of the world." U.S. Steel defined the
    meaning of corporate power and efficiency for decades after J. P.
    Morgan created the first billion-dollar company in 1901. In the
    mid-twentieth century General Motors symbolized bureaucratic
    management, mass production, and the social, political enfranchisement
    of a unionized, blue-collar workforce. When Peter Drucker wrote the
    pioneering management study The Concept of the Corporation in 1946 it
    was the General Motors organization, from the Flint assembly lines to
    the executive offices in Detroit and New York, that exemplified
    corporate modernity in all its variegated aspects. And in more recent
    years, first IBM and then Microsoft have seemed the template for an
    information economy that has transformed the diffusion and production
    of knowledge around the globe.

    Wal-Mart is now the template business for world capitalism because it
    takes the most potent technological and logistic innovations of the twenty-first century and puts them at the service of an organization
    whose competitive success depends upon the destruction of all that
    remains of New Deal–style social regulation and replaces it, in the
    U.S. and abroad, with a global system that relentlessly squeezes labor
    costs from South Carolina to south China, from Indianapolis to
    Indonesia. For the first time in the history of modern capitalism the
    Wal-Mart template has made the retailer king and the manufacturer his
    vassal. So the company has transformed thousands of its supplier firms
    into quaking supplicants who scramble to cut their costs and squeeze
    the last drop of sweated productivity from millions of workers and
    thousands of subcontractors.

    The Wal-Mart Phenomenon

    Snapshots from the lives of four women help us understand the impact
    of the Wal-Mart phenomenon upon the lives of tens of millions of
    ordinary people.

    Chastity Ferguson kept watch over a sleepy three-year-old late one
    Friday as she flipped a pack of corn dogs into a cart at her new
    favorite grocery store: Wal-Mart. At this Las Vegas supercenter, pink
    stucco on the outside, a wide-isled, well-lighted emporium within, a
    full-scale supermarket is combined with a discount megastore to offer
    shoppers everything they might need in their daily life. For Ferguson,
    a harried twenty-six-year-old mother, the draw is obvious. "You can't
    beat the prices," said the hotel cashier, who makes $400 a week. "I
    come here because it's cheap."

    Across town, another mother also is familiar with the supercenter's
    low prices. Kelly Gray, the chief breadwinner for five children, lost
    her job as a Raley's grocery clerk late in 2002 after Wal-Mart
    expanded into the supermarket business in Las Vegas. California-based
    Raley's closed all eighteen of its southern Nevada stores, laying off
    1,400 workers. Gray earned $14.98 an hour with a pension and family
    health insurance. Wal-Mart grocery workers typically make less than
    $10 an hour, with inferior benefits. "It's like somebody came and
    broke into your home and took something huge and important away from
    you," said the thirty-six-year-old. "I was scared. I cried. I shook."

    Halfway around the world, twenty-year-old Li Xiao Hong labors in a
    Guangzhou factory that turns out millions of the Mattel toys that
    Wal-Mart sells across America. She is part of an army of 40 million
    newly proletarianzed peasants who are turning south China into the
    workshop of the world. The plant's work areas are so poorly lighted
    that they seem permanently shrouded in gray. A smell of solvent wafts
    across the facility as rows of workers hunch over pedal-operated
    sewing machines and gluepots.

    Li is the fastest worker on a long, U-shaped assembly line of about
    130 women. They put together animated Disney-themed dolls that can be
    activated by the nudge of a small child. Li's hands move with
    lightning speed, gluing the pink bottom, screwing it into place,
    getting the rest of the casing to adhere, tamping it down with a
    special hammer, pulling the battery cover through its slats, soldering
    where she glued, then sending it down the line. The entire process
    takes twenty-one seconds.

    Li generally works five and one-half days a week, up to ten hours at a
    time. Her monthly wage — about $65 — is typical for this part of
    China, enough for Li to send money back home to her rural family. But
    Li pays a heavy price. Her hands ache terribly, and she is always
    exhausted, but she seems resigned more than angry. "People at my age
    should expect some hardship. I should taste some hardship while I'm

    And finally there is Crystal, the wife of a Wal-Mart assistant store
    manager, who brings home about $40,000 a year after a decade of hard,
    devoted work. Crystal took umbrage at the invective posted on one of
    the many anti–Wal-Mart Web sites that current and former employees
    have created in recent years. So she fired back.

    "Wal-Mart has been very good to us. The people at the store work not
    only as a team but as a family unit. When families in our community
    have trouble Wal-Mart is there to help. Wal-Mart helps with tuition
    for college, they give out scholarships. Every company has its faults,
    no job site or company is perfect. You are only upset because Wal-Mart
    is Pro-Associate and Anti-Union. And I pray to GOD as a Christian
    woman that it stays the way it is. Wal-Mart is a good place to work,
    they do care about their Associates. I think that Sam Walton would be
    proud of the store that my husband works at."

    The experience of these four women provides a set of markers for
    understanding this giant firm. Hundreds of millions of shoppers agree
    with Chastity Ferguson: Wal-Mart prices are low, cheap enough to
    enable hard-pressed working-class families to stretch their dollars
    and survive until the next paycheck. But the experience of Kelly Gray
    has also made Wal-Mart a touchstone for political and economic
    controversy. The famed economist Joseph Schumpeter might well have
    been thinking of a dynamically successful firm like Wal-Mart when he
    coined the phrase "creative destruction," the process by which one
    mode of capitalist production and distribution replaces another. As
    Schumpeter made clear early in the last century, such transformations
    are not inevitable, nor do they come without an immense social cost,
    which is why Wal-Mart's growth has generated one high-profile conflict
    after another.

    In California, where Wal-Mart's actual footprint has been modest, the expectation that this corporation will build scores of supercenters,
    staffed by low-wage workers, helped ignite a four-month strike by
    unionists in the old-line supermarkets, who wanted to preserve their
    wage and benefit standards. Their strike ended in a bitter defeat in
    February 2004, but barely a month later Inglewood residents created a
    stir when that majority black and Latino city voted down a
    Wal-Mart–sponsored referendum designed to pave the way for
    construction of one of the first supercenters in Southern California.
    Energized by this anti–Wal-Mart show of strength, the Los Angeles city council enacted an ordinance requiring big-box stores like Wal-Mart to
    fund an "economic impact" analysis to determine their effect on
    community wages, existing businesses, and traffic patterns. But
    Wal-Mart struck back in the November 2004 elections, helping fund a
    referendum that overturned a recently enacted California law requiring
    large, labor-intensive firms to pay substantially more of the health
    insurance costs of their employees. And while all this was going on, a
    San Francisco judge gave the Berkeleybased Impact Fund permission to
    seek higher pay and back pay for more than a million women workers at
    Wal-Mart, in the largest class-action employment-discrimination suit
    ever certified by a federal court.

    Li Xiao Hong does not work directly for Wal-Mart, but the conditions
    of her life are inexorably bound to the capitalist template the
    corporation is now putting in place around the globe. She is a
    participant in the most sweeping process of proletarian
    industrialization since the dawn of the factory revolution nearly two
    centuries ago. Li is a cousin to the mill girls of Lowell, the
    immigrant needle workers of the Lower East Side, and the Mexican women
    who poured into the border region maquiladoras just one generation
    ago. Now she stands on the lowest rung of a supply chain that feeds
    the enormous buying power assembled by the big-box stores that are
    becoming dominant throughout the global North. Although Wal-Mart
    deploys the most sophisticated telecommunications system to
    efficiently channel her labor power, Li's sweated work life, and that
    of her tens of millions of workmates, demonstrates that we still live
    in an industrial world. More people labor on an assembly line today,
    making actual things, than at any other time in human history. Still
    more sell, talk, or manipulate a keyboard under assembly-line
    conditions. The postindustrial age, heralded by so many pundits and
    academics, has not yet arrived.

    And finally there is Crystal, a product of the Wal-Mart "family"
    itself. Her husband, who worked his way up from maintenance, has the
    toughest job in the company. He is in the hot seat because he has to accommodate the insistent demands that flow down from the store and
    district manager, while at the same time keeping the shelves stocked,
    the cash registers staffed, and the store profits growing.
    Bentonville's computers assign Crystal's husband a labor budget that
    is as tight as a drum and a sales target that moves upward with
    inexorable momentum. He is in a constant squeeze, and when workers
    quit — WalMart's annual turnover is above 40 percent a year, not far
    below that of McDonald's — Crystal's spouse has to fill in the gaps,
    which accounts for a managerial workweek of sixty hours and more. But
    none of this seems to have diminished the loyalty of people like
    Crystal and her spouse to Wal-Mart as an institution and an idea.
    Promotion from within, frequent contact with upper management, a
    measure of paternalism, and a loosely cloaked Christian identity have
    helped generate a remarkably cohesive corporate culture in which a
    substantial proportion of those who pursue careers at Wal-Mart
    participate. "Ordinary people doing extraordinary things": there is a
    measure of truth in this Wal-Mart slogan.

    Why Is Wal-Mart So Big?

    What makes for giantism in big business? Why was General Motors so big
    during the middle decades of the twentieth century and why is Wal-Mart
    so huge today? In his contribution to this collection, historian James
    Hoopes recalls the work of the Nobel Prize–winning economist Ronald
    Coase, who described the corporation as an "island of conscious power"
    in an "ocean of unconscious cooperation, like lumps of butter
    coagulating in a pail of buttermilk." Every firm has an optimal size
    beyond which the risk of loss from mismanagement more than offsets the
    chance of gain from the economies of scale it can realize. In the
    first half of the twentieth century GM became a vertically integrated conglomerate because Teletype, telephones, and good roads enabled the corporation to deploy its famous system of centralized control and decentralized operations across dozens of states and scores of
    factories. But such highly integrated production and distribution
    within a single firm may not always be the most cost-efficient way to
    make the most money. If new inventions and sociopolitical mores make
    it cheaper and faster to purchase rather than make the same goods and
    services, then executives will begin to dismantle the huge enterprise. According to the most savvy, technologically hip business writers, the contemporary corporation is doomed to fragment within a world of
    cheap, rapid communications and increasingly efficient markets. The
    "virtual" corporation of the twenty-first century should consist of a
    few thousand highly skilled managers and professionals who contract
    out nonessential services to cheaper specialist firms.

    Thus we have the outsourcing of both call-center work and janitorial
    services to an ever shifting coterie of independent firms, while
    "branded" companies like Nike and Dell farm out virtually all the
    manufacturing work that goes into their core products. This has been
    the path followed by General Motors, which has spun off Delco, once a vertically integrated parts division. Except for final assembly and
    the manufacture of key components, GM and the other big car companies
    seek to outsource as much work as possible, even sharing space with
    suppliers under the same roof and on the same shop floor. So the GM
    payroll, white collar and blue, is about half the size it was in 1970.
    Giving all this a metahistorical punch, Forbes columnist Peter Huber
    declared that it was "market forces and the information age" that had
    beaten the Soviets and would soon force the dissolution of America's
    largest corporations. "If you have grown accustomed to a sheltered
    life inside a really large corporation," he advised, take care. "The
    next Kremlin to fall may be your own."

    But Wal-Mart has found giantism efficient and highly profitable. This
    is because the price of goods and services it purchases on the open
    market has not fallen as rapidly as has the cost of "managing," within
    a single organization, the production or deployment of those same
    economic inputs. For Wal-Mart it is still cheaper to build than to
    buy, and to employ workers rather than subcontract them. As Linda
    Dillman, the chief information officer at Wal-Mart, put it in 2004:
    "We'd be nuts to outsource." And the reason for her disdain? "We can
    implement things faster than any third party," Dillman says. "We run
    the entire world out of the facilities in this area [Bentonville] at a
    cost that no one can touch." Thus the same technologies and cost
    imperatives that have led to the decomposition and decentralization of
    so many other institutions, including government, health care,
    entertainment, and domestic manufacturing, have enabled Wal-Mart and
    other retail distribution companies to vastly enhance their own
    managerial "span of control."


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