Wednesday, January 03, 2007

What to do about Wal-Mart

Of all the puzzles facing the pro-democracy anti-Communist community, the one with the worst optics is easily the issue of big-box retailers selling "Made in China" products, an issue that has become synonymous with Wal-Mart. Since Wal-Mart is not only one of the largest firm selling Communist imports, but also the biggest of big-box retail in America, it didn't take long for this issue to get swept up in the "Wal-Mart wars." Many in the community have called for a complete boycott of Wal-Mart. I, however, think there is a better approach.

It's no secret that Wal-Mart, like every other corporation, seeks to maximize profits for its shareholders. That's the whole point of a corporation; in fact it is the mantra of a free-market economy (as opposed to Communist China's "market" economy, where the purpose is still to maximize the longevity of the Communist regime). This has led many consumers to think they can only affect decisions with concerted, decisive, and radical action such as boycotts. In the modern era, however, consumers has far more power than they realize. The combination of extensive market research and advances in inventory tracking have now brought us to the point where nearly every large retail corporation is aware of just what is selling, and when. This gives consumers more effective ways to change corporate behavior.

Wal-Mart is a perfect example of this. Given its numerous political foes, any attempt to force the firm to change its behavior through a boycott gets lost in the various groups calling for one, even successful ones. Wal-Mart executives would have no idea why - if a boycott succeeded - their sales are plummeting. Sure, greater publicity for the anti-Communist cause would help, but let's face it - mainstream media is much more focused on health care and union issues than with the threat from the Chinese Communist Party. The odds of Wal-Mart getting the right message would be slim, and that's assuming a boycott is strong enough to affect the bottom line - a tricky assumption at best.

However, as I mentioned above, firms like Wal-Mart can track inventory down to the last candy bar these days. As such, the firm can and does use past sales history as a guide to recommend what products sell, and thus, what Wal-Mart should put on the shelves or racks. Therefore, I would humbly submit the anti-Communist community (and everyone else in the democratic world, for that matter) to focus not on the name on the storefront, but the label on the product.

Wal-Mart (and other retailers) might miss the message in a boycott situation, but if "Made in China" items are gathering dust while everything else is flying off the shelves, the message would be unmistakable: stop importing goods from Communist China.

There are usually two criticisms of such a move: one from the "engagement" crowd, the other from fellow anti-Communists.

The "engagement" crowd, confusing this as a trade issue, warn anti-Communists that few products made in Communist China would, in light of falling sales, be made in the United States; thus, the effect on the American job market would be minimal. However, to use this argument is to miss the whole point. For the Chinese Communist Party, economics are subservient to its geopolitical aims against America. While moving a factory from Communist China to India or Japan would do nothing for American jobs, it would benefit the democratic world as a whole, and turn the imported product from a tool for the Communist regime to a benefit for anti-Communist democracies. In fact, it is Communist China's military buildup, ties to terrorism, and abuses of its own people that have led many of us to consider this action in the first place, not the job issue per se.

As for my fellow anti-Communists, there is doubt among them that Wal-Mart (or other retailers who import from Communist China) would pass up the sweet deals on production that they have in Communist China, particularly Wal-Mart itself, whose production is practically in-house. However, while producing the goods in Communist China may cost less than producing them elsewhere, it certainly isn't less than zero, and the more people take part in label-shopping (for lack of a better term), the harder it will be for Wal-Mart and others to justify those cheaply made but unsold goods to their shareholders.

Therefore, consumers can, in fact, change corporate behavior if they wish to do so, and without avoiding the corporation in question entirely. In fact, making preferences within the store's product line can, in my view, have more of an impact than skipping it altogether. For that reasons, I recommend keeping boycotts limited to labels. Feel free to shop at Wal-Mart, but steer clear of "Made in China" products within it.

No comments: