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.
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).
4 Adamy and Zimmerman, op. cit., A4.
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.
—Alexander S. Peak