Wal-mart critics and the lessons of the Renaissance

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I was listening to a Wal-mart critic on Air America radio the other day, and I couldn’t help but notice that he kept talking about what Wal-mart should and should not do. Wal-mart should pay its employees more, Wal-mart should provide health coverage for their workers, Wal-mart should not buy from sweatshops and so forth. Most groups like Wal-mart Watch and others also have a legislative agenda, but too often when they speak in public, they focus on just one single company (Wal-mart) and they focus on applying social pressure to that company rather than to our legislators who need to craft good laws governing the work place and health care. I’m not at all criticizing their overall agenda, which I fully agree with, but the way it seems to get presented whenever I hear them on the radio.

As far as I can tell, most rapaciously for-profit, ultra-free-market businesses like Wal-mart only change their stripes for one of four reasons:

  1. Workers elect politicians who look out for them and enact laws that balance the power between employers and employees. In post-Reagan America, one has come to expect that legislators will do little to help those who don’t make massive donations to their campaigns and we have hopefully seen the zenith of that trend with Sauron and the Nazgul (whoops, I’m confusing them with Bush, Cheney, Ashcroft, Rumsfeld and Wolfowitz again). Leaving aside for the moment why it has come to this in America, as long as Wal-mart exists in a society where the rank and file workers won’t even vote in their own interest, it’s hard to fault Wal-mart overly much for taking advantage of the situation.
  2. Workers band together in unions that are willing to put themselves at great risk and face violent corporate goons if need be and, on occasion, be violent themselves, in order to prevent companies for always bidding them down by bringing in people who will work at subsistence wages, threatening them with termination if they complain, try to change things of, God forbid, unionize. Despite workers’ rights being attacked all over the country in every industry, unionism remains in decline and Wal-mart is a known opponent of any attempt to unionize, so I suppose the critics of Wal-mart recognize that’s not likely to achieve rapid results either.
  3. The labor market is so tight for workers of the sort that the company needs, that the free market leads to a bidding war. Unfortunately, this is usually true only for skilled positions and it is out of the control of activists, legislators and companies, short of methods of governing fertility and immigration.
  4. Consumers band together and apply moral pressure on companies whose practices they find unacceptable. The boycott that got Home Depot to reduce its dependence on number from old-growth forests being one such case. This is the one good thing about our massively scaled free market with its giant and omnipresent corporations. Given that Wal-mart is ubiquitous, it becomes possible to solidify a national movement around a Wal-mart boycott in a way that it simply isn’t possible boycott all business that pay low wages and offer not health coverage. By making one company a target it is possible to focus people’s action, but more importantly it is possible to share information all across the country. What’s true for Berkeley is true for Peoria.

So I understand that in order to be effective against Wal-mart, moral pressure is perhaps the most effective tool, while the Wal-mart critics hope that legislation like that recently passed in Maryland after gubernatorial veto will spread across the country and that unionism will see a renaissance in America. That seems unlikely, by one thing my training as a historian has taught is that one should never project current and recently past trends into the future. The future doesn’t work that way.

While I understand, I nevertheless find the tack taken by the critic on the radio disheartening because

  1. Wal-mart may be the largest employer in America, but in aggregate small businesses employ far more people and very often they offer no better conditions, pay and benefits than Wal-mart. In fact, according to a spokesman for the Chamber of Commerce, 25 million uninsured Americans work for companies with fewer than ten employees (Washington Post, Jan 13, 2006).
  2. Neither Wal-mart nor any other company should be in the business of providing health benefits or any other benefits any more than we want our children’s schools funded by Wal-mart directly (rather than indirectly through taxes) or our road repairs prioritized by Wal-mart executives (would the road past Target ever get fixed?). It is absolutely terrible for workers to have their health care of all things tied to their job. When you lose your job, one would hope that you would have a safety net, but in our current situation, if you lose your job, your only protection is COBRA coverage, which is often prohibitively expensive, since the insured now has to pay, and people lose their insurance. We need a comprehensive health care solution that is utterly and totally independent of employment. As much as this makes more sense for employees, it makes more sense for corporations too, who have a huge health-care monkey on their backs. So in short, I disagree with the fundamental premise that Wal-mart should offer health insurance. Rather, we need to get Americans to pledge never to vote for a politician who does not have major health care reform as one of his or her top three issues.
  3. I would rather trust to good laws, than to good men and woman. I don’t want to guilt Wal-mart into throwing a bone or two to workers, I want to pass laws that will compel all employers to pay living wages and maintain dignified working conditions and I don’t expect any one corporation to lead, though I’m gratified when one does.

This last point was the one that prompted this essay. In the Italian Renaissance, the “rhetorical writers” (commonly known as humanists as well as their predecessors, the dictatores) argued that “what matters most in good government is not the fabric of institutions, but rather the spirit and outlook of the men who run them” (Skinner, p. 46). They believed that good government was achieved through the moral education of the men who would end up running the government. On the other side were the scholastic theorists who “present themselves less as moralists than as political analysts, pinning their hopes less on virtuous individuals than on efficient institutions as the best means of promoting the common good and the rule of peace” (Skinner, p. 60). In other words, they believed that well-designed institutions could constrain evil men and promote the common good.

The scholastic viewpoint ultimately is what lies behind the American idea of checks and balances. The system only fails if several institutions are taken over by evil men and women willing to work in concert with each other. In fact, even if all institutions are taken over by evil people, if they disagree, there is still the possibility that they will govern reasonably well. We prefer to elect people who are good, but sometimes someone evil like George W. Bush gets elected, and yet in general the machinery of government in America rolls along just fine.

I see in the rhetoric I hear from the critics of Wal-mart, the same mentality toward corporate governance as the Renaissance humanists had toward state governance. I believe, however, that the scholastics were correct on that point: better to trust to laws and institutions than to the virtue of men. The Maryland law is a rather unfortunate half-measure with the potential to reap great benefit down the line. The law only affects privately held companies with over 10,000 employees who spend less than 8% of revenue on health care. As it turns out, the only company that fits that description in Maryland is Wal-mart. Again, I think it is fundamentally wrong-headed to tie health care to employment, but if more states enact such measures, as the AFL-CIO hopes they will (Fox News, January 19, 2006) one can hope that the Wal-marts of the world will be up in arms and will make common cause with progressive activists as corporations desperately try to shift the health care burden from themselves to the government, which will be a good thing for business and a great thing for workers. It will make workers as free to move, as companies are free to fire them, rebalancing the distribution of power. Employees will not be stuck in a job because they are afraid of losing health benefits.

So while it troubles me that we focus on Wal-mart rather than all companies, and we focus on social pressure rather than legislation (albeit with some important legislative victories) and we focus on private-sector solutions, the glimmer of hope is that this pressure and these legislative half-measures will start to really hurt powerful corporations and we can look to the day when Wal-mart lobbyists join progressive activists in pushing single-payer health care that will finally trickle down to those 25 million Americans who are uninsured and working for small businesses.

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