Steve G.

Wal-Mart Embraces Fascism

In Corruption, Economics, Health, Media, Personal Responsibility, US Government on July 2, 2009 at 4:38 pm

Wal-Mart embraces fascism.

Is this claim too extreme?  Am I guilty of hyperbole?  In this case, I think not.

According to the 1 July 2009 edition of The Wall Street Journal, Wal-Mart, the largest “private” employer in the United States, is backing a federal initiative that would require employers to provide health insurance to workers.1

There are many reasons to oppose such a requirement—especially if you are a member of the working class.  As John Stossel writes,

Why on earth would we want mandated insurance from employers?!  Do our employers pay for our food, clothing or shelter?  If they did, why would that be good?  Having my health care tied to my boss invites him to snoop into my private health issues, and if I change jobs I lose coverage.  Employer paid health insurance isn’t free.  It just means we get insurance instead of higher salaries.2

According to Ms. Grace-Marie Turner, president of the Galen Institute, “four in ten Americans change their job every year. ”3  This makes employment-based healthcare all the more problematic for workers.  Moreover, Mr. Neil Trautwein with the National Retail Federation has described the employer mandate as “the single most destructive thing you could do to the health-care system shy of a single-payer system.”4

But the undesirability of employment-based health coverage does not alone make Wal-Mart’s Tuesday announcement a support for fascism.  To understand more clearly why the move is in a fascistic direction, we must first know what fascism is.

Fascism is an ideology that holds the state to be the supreme organisation in and engine or society, outside of which all else and everyone else is unimportant.  Mr. Sheldon Richman defines its economic system as “socialism with a capitalist veneer,” one that seeks to control the means of production “indirectly, through domination of nominally private owners.  …[F]ascism [nationalized property] implicitly, by requiring owners to use their property in the ‘national interest’—that is, as the autocratic authority conceived it.  (Nevertheless, a few industries were operated by the state.)”5

Perhaps the best description of the fascist economic model comes from John T. Flynn, who described the system in detail in chapter ten of his 1944 classic As We Go Marching.  The first explicitly fascist state, Italy under Mussolini, established corporatives to direct economic activity and production.  Flynn defines fascist system as “(1) a capitalist type of economic organization, (2) in which the government accepts responsibility to make the economic system work at full energy, (3) using the device of state-created purchasing power effected by means of government borrowing and spending, and (4) which organizes the economic life of the people into industrial and professional groups to subject the system to control under the supervision of the state.”6

Does the federal state’s most recent initiative take us fully into fascism?  Probably not, but it is certainly a step in that direction.

So why, then, would a business want to see the central state usurp greater degrees of power?  The state offers to Big Business what it cannot achieve on the free market: the means to keep out competition.  As historian Gabriel Kolko wrote,

The dominant fact of American political life at the beginning of this century was that big business led the struggle for the federal regulation of the economy.

If economic rationalization could not be attained by mergers and voluntary economic methods, a growing number of important businessmen reasoned, perhaps political means might succeed.7

Kolko’s main thesis is that it was big business that spearheaded governmental regulation of business during the Progressive Era.  The same happens today, and can be exemplified in Wal-Mart’s recent decision.

The Wall Street Journal explains Wal-Mart’s motivation in benign-sounding terms:  “Wal-Mart—which provides insurance to employees”—“wants to level the playing field with companies that don’t.”8  This is a sugary way of saying that Wal-Mart wishes to use the aggressive controls of the state to force firms smaller than it to provide what they may or may not have the resources to provide.  Those firms that are unable to continue operating under the state’s new regulations will, of course, be forced to go out of business (unless they’re able to procure bailouts—this is also problematic), thus leaving less firms with whom Wal-Mart will need to compete.  This is bad not only for workers but also for consumers.

We shouldn’t really be surprised by Wal-Mart’s recent move.  As Mr. Lew Rockwell reported in 2005, Wal-Mart called for an increase to the minimum wage so as to impose a higher cost on smaller competitors.  As Rockwell wrote, “if Wal-Mart can successfully lobby the government to abolish lower-wage firms, it has taken a huge step toward running out its competition.”9

That Wal-Mart would again advocate statist interventions that it knows it can overcome but that its competitors will have more difficulty overcoming goes to show what little Wal-Mart has in way of business ethics.

Notes

1 Janet Adamy and Ann Zimmerman, “Wal-Mart Backs Drive to Make Companies Pay for Health Coverage,” The Wall Street Journal CCLIII, no. 152 (Wednesday, July 1, 2009): A1, A4.

2 John Stossel, “Health Insurance Isn’t All It’s Cracked Up to Be: Mandating Medical Coverage May Sound Good, but You’ve Got to Read the Fine Print,” ABC News, October 16, 2006, http://abcnews.go.com/Health/PrescriptionForChange/story?id=2574980&page=1 (accessed July 1, 2009).

3 John Stossel, “Whose Body is it, Anyway?: Sick in America,” 20/20, September 14, 2007.

4 Adamy and Zimmerman, op. cit., A4.

5 Sheldon Richman, “Fascism,” The Concise Encyclopedia of Economics, http://www.econlib.org/library/Enc/Fascism.html (accessed July 1, 2009).

6 John T. Flynn, “What is Fascism?” in As We Go Marching (orig. 1944; New York, N.Y.: Free Life Editions, Inc., 1973), pp. 54–55.

7 Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900–1916, (Glencoe, Ill.: Free Press, 1963), pp. 57–58.  Butler Shaffer picks up where Kolko leaves off with Butler Shaffer, In Restraint of Trade: The Business Campaign Against Competition, 1918–1938, (orig. 1997; Cranbury, N.J.: Associated University Presses, Inc., 1999).

8 Adamy and Zimmerman, op. cit., A1.

9 Llewellyn H. Rockwell, Jr., “Wal-Mart Warms to the State,” Mises Daily, December 28, 2005, http://mises.org/story/1950 (accessed July 1, 2009).

—Alexander S. Peak

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  1. To say Wal-Mart has poor business ethics is not right. They are simply responding in the most rational way to the environment that surrounds them. They would actually be wronging their employee’s and shareholders if they didn’t do seemingly devious things like supporting increased minimum wages etc etc. Go Wal-Mart, and go the law of unintended consequences!!!

  2. Unfortunately Wal-mart performs in strict adherence to the cost-benefit analysis- eliminating any external influences concerning social benefits or fair business ethics. To their benefit, a fascist approach to the political-economic climate will benefit their enterprise regardless of associated costs as leading enterprises control content will not leave room for independents.

    If you’re interested in holding Wal-mart accountable for their disgusting business ethics please take the time to nominate them into Corporate Accountability International’s Hall of Corporate Shame: http://salsa.democracyinaction.org/o/2215/t/8981/signUp.jsp?key=4278

  3. uhm. i dont think so…

  4. Mr. or Ms. scepare,

    I do not know to whom you are replying. Are you replying to Mr. Smith or to Mr. or Ms. Geetha, or are you me?

    If you are replying to my original article, wherein I point out that Wal-Mart, according to The Wall Street Journal, has begun advocating a statist policy, then surely you cannot disagree with the fact that it has. See the front page of the July 1st edition.

    I analyse the scenario and point out that the unconstitutional, statist policy will hurt Wal-Mart’s smaller competitors, forcing some of them out of business. This should be obvious, when one considers that smaller firms do not have the same resources as do larger firms and often cannot offer the same benefits as do the larger firms until they have had the opportunity to grow. By forcing small businesses to provide uneconomic benefits, the state makes it even more difficult for small businesses to get out of the red. Such statist regulation thus makes small businesses and worker-owned firms less stable and more likely to fail, leaving less businesses against which big businesses (e.g. Wal-Mart) will need to compete. I don’t think there can really be any disagreement there, as this analysis of the difficulties faced by small business in the face of regulation is fairly uncontroversial.

    Perhaps it is to my claim that—insofar as a firm, individual, or organisation advocates this statist policy, it advocates a step in the direction of economic fascism—that you object. But, again, I don’t see why you should. My claim is not that such firms, individuals, and organisations embrace all aspects of fascism, including, e.g., hyper-militarism; the claim is merely that they embrace the economic aspects.

    I describe in brief detail the corporative economic model of Fascist Italy, and this description, too, should not be controversial, as it is a matter of historical record. Definitely check out the two sources I cite.

    Let us be clear, my claim is not that the adoption of this destructive regulation would take us entirely to a corporative system. As I write above, “Does the federal state’s most recent initiative take us fully into fascism? Probably not, but it is certainly a step in that direction.” After all, is this proposed regulation not a means by which the state will aim to direct the economic progress of the nation? Surely, I do not see how one could think not.

    If your disagreement is with Mr. Smith above, then I have to agree with your disagreement. Although Mr. Smith is correct that the law of unintended consequences is pertinent to this matter, he seems to infer that Wal-Mart would be wrong not to conform to its currupt, statist environment. I am too much of a stoic to agree with Mr. Smith’s position. If the institution of slavery were still (openly) protected by the state, if that were our environment, would the “most rational” thing be to try to acquire additional slaves? I would rather die than promote an unethical institution, and the statist regulation being promoted by Wal-Mart is an unethical institution.

    Finally, if your disagree is with Mr. or Ms. geetha, then perhaps again we may have some agreement with one another, for in his/her response, he/she states that “Wal-mart performs in strict adherence to the cost-benefit analysis” while not also commenting on the manner in which the state distorts such analysis. Thus, in a sense, it can be said that Wal-Mart is not responding to true cost-benefit analysis but is instead responding to a statist distortion thereof. The cost-benefit analysis that would prevail among firms on a truly free market would yeild responses of a much more libertarian quality.

    Sincerely yours,
    Alex Peak

  5. If I were commercially active in a time of slavery, and I had shareholders and employees to think of, then as disgusted as I may or may not feel about said slavery, I would be duty bound to do the best I could by my shareholders and employees given the prevailing conditions. If I am honest, I don’t really see any moral difference between slavery, and killing (rather than keeping as a prisoner) an enemy combatant. Is it better to kill them, or to keep them in your service? I know where my vote is! And if you want to say that Africans were never our enemies, but we enslaved them anyway, all I say is why did they not enslave us? Why didn’t they? I guess it’s because they are of a moral fibre beyond us filthy Europeans and knew that it was wrong. It wasn’t because they were disorganized lay-abouts, oh no no no no way!!

    Please, let freedom rule, as unpalatable as it may be to the frail of temperament.

  6. Mr. Smith, I would recommend surrendering the collectivist outlook. Not only had I no idea that you are a European, I further do not care. I would never be so cavelier as to paint all Europeans with a single brush, saying that all Europeans (or all Americans, all Australians, all Asians, whatever) have some sort of homogenous moral fibre. Such collectivist grouping would be silly at best and anti-intellectual at worst.

    The only appropriate manner in which to judge moral fibre is on an individual basis. Each individual is different. Each individual has a unique set of ordinal values. Thus each individual must be judged based on her or his own individual merits.

    Enslavement is an usurpation of one’s physical body from the self-owner. It is, therefore, an act of theft, pure and simple. As slavery stands in stark violation of self-ownership, and as all rational conceptions of justice must take into account the logical supremacy of the axiom of self-ownership, slavery is therefore always and everywhere a violation of natural law and of natural justice. It is just as unethical to petition for the protection of slaveholders from their just punishments, therefore, as it is to be a slaveholder oneself. Discussion of profits are irrelevant, for what right does anyone have to profits, or to any property whatsoever, if there be not a principle in nature of self-ownership by all human individuals? A proper defence of profits and of property rests first and foremost upon the very same precepts of a just society that invalidate slavery. How you “may or may not feel” remains irrelevant, as feelings have absolutely no place in any rational system of ethics.

    Best regards,
    Alex Peak

  7. I am not sure where you’re getting your information, but good topic. I needs to spend some time learning much more or understanding more. Thanks for fantastic information I was looking for this info for my mission.

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