By: Hamilton Nolan
Wal-Mart is widely despised by left wingers for reasons both philosophical and aesthetic. The company, in turn—though sometimes pushing for "green" improvements and other traditionally liberal notions that will help the Wal-Mart bottom line—is a heavy Republican donor and notorious union-buster, and generally behaves in the corporatist, center-right way that one would expect of one of America's largest corporations.
This is not about whether or not we agree with Wal-Mart's political persuasion. It is about the fact that it doesn't make sense. If there is any company out there that should throw its financial and political clout behind socialism, it is Wal-Mart. Why is Wal-Mart so big in the first place? What is the business model that pulled in $447 billion in annual revenue? It is populism—corporate populism. Wal-Mart's customers are everyone. And, in America, that means that Wal-Mart's customers are distinctly not wealthy. Wal-Mart got so big by driving prices down as far as they could possibly go, and becoming a one-stop shop for poorer Americans to save money on everything. Wal-Mart is not about the best quality, or the best selection; it is about selling cheap things to people for whom every dollar is precious.
This month, Wal-Mart executives fretted in an internal memo about slow sales, thanks to higher payroll taxes on their financially strapped customers, and a weak economy in general. In the WSJ today, Rich Karlgaard argues that the "political left" should not applaud Wal-Mart's hard times, because what they really signal are hard times for the retailer's customers—the middle and lower classes of America.
He's right. But the implications of this are not simply that liberals should cheer Wal-Mart on. The real implications are that Wal-Mart should be doing everything it can to stabilize and enrich the socioeconomic position of its customer base. The vast inequality that plagues America is not Wal-Mart's friend. The fact that the wealth gains of recent decades have flowed overwhelmingly to the very rich means that that money is not in the pockets of Wal-Mart shoppers. If Wal-Mart, the world's largest private employer, wants to put together a rational political platform for the long-term good of itself and its customers, that platform should resemble socialism much more than it would resemble anything coming out of the Republican party. Consider: