Dan Gillmor & Wal-mart’s Economics

Let me get this straight. According to San Jose Mercury-News columnist Dan Gillmor, Wal-mart is an evil company. But here are just some of the accolades he drive-by proffers the retailer:

  • It offers great variety at low prices
  • It brought competition to many small towns dominated by a small number of businesspeople charging higher prices
  • It is a genuine innovator in using information technology to handle inventory and purchasing

So, what are his beefs? The usual Seattle-WTO laments, like that the company outsources, that it doesn’t pay as much of employees’ health care benefits as he would like, and that, darn it all, the 1950s were just so much fun.

Dan, consumers are smart people. If they thought that the better service and kitschy buildings in the downtown of your choice were worth paying a higher price, they would pay it. But they demonstrably don’t think brick buildings and local storeowners are always worth the (generally) higher price, and so they don’t pay it. Markets work — even when some people don’t want them to.

Update: For those of you interested in more light and less heat, consider reading some of the following papers:

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