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Wal-Mart: The Leaders We Deserve


This corporate giant has reason to put on a happy face.

Editors Note: Welcome to Love It or Hate It, a regular dual-column feature that will capture the love-hate relationship America has with some of its biggest, most controversial companies. For past columns, click here. For the opposing view on this company, see Walmart: Abusing Its Power for Forty Years.

If it were possible to find the nation's largest merchant pitiable, Wal-Mart (WMT) would deserve our sympathy.

The goods Wal-Mart sells are too "white trash" for self-styled trendsetters on the American coasts. To those who would never deign to set foot in a Wal-Mart, the chain's labor practices are widely regarded as only slightly more civil than a slave galley.

Into the vacuum left by the loathsome Soviet Evil Empire, we've, improbably, cast a merchant. Wal-Mart drives mom and pop out of business, and bullies defenseless (?) vendors like Procter & Gamble (PG) and the Chinese into servitude using the cudgel of paying as little as possible, then, after taking a cut, passes the savings on to American consumers.

What's wrong with this picture? In a word: everything.

Wal-Mart isn't wrong with capitalism. Wal-Mart is capitalism.

See also, Raging Bull on Wal-Mart for the latest on stock action.

Fifty years ago, a man named Sam Walton took a look at the corner stores serving agrarian America and decided he could do it better. He didn't do it by inventing the spreadsheet and selling Ma and Pa indecipherable derivatives that left them homeless. He didn't see a country full of suckers who would work long hours for slave wages and pay top dollar for whatever Walton opted to throw on his shelves. Walton didn't even go the Standard Oil route and drive the competitors out of business before jacking up prices.

What Walton did was build a better mousetrap. He built a chain one store at a time, and revolutionized the distribution of goods to far-flung stores serving communities previously thought to be too small to support large-box retailers.

In so doing, Walton made it more affordable to live and do business in those communities. Were there losers in the Wal-Mart roll-out? Absolutely. If you ran an inefficient dry-goods store with one style of shoe in four sizes and Wal-Mart bought the lot across the street, your business wasn't long for this world.

Wal-Mart steamrolled lousy merchants like a jumbo thresher plowing through the heartland. Walton asked no quarter, gave none, and was legendary for grinding down the vendors whose goods stocked the shelves of his stores. And if you have a problem with that, you probably also object to the way Henry Ford made it impossible to sell $5,000 cars to the masses in the 1920s and are furious that Steve Jobs and Apple (AAPL) didn't wait 50 years for a clueless Xerox (XRX) to figure out what to do with a computer mouse.

When you serve the equivalent of two-thirds of Americans every week, as Wal-Mart does, you're going to take on both its positive and negative traits.
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