The New York Times
April 17, 2004, Saturday, Late Edition - Final
SECTION: Section B; Page 7; Column 1; Arts & Ideas/Cultural Desk
LENGTH: 1294 words
HEADLINE: Wal-Mart, a Nation Unto Itself
BYLINE: By STEVEN GREENHOUSE
DATELINE: SANTA BARBARA, Calif., April 13
We already know that Wal-Mart is the biggest retailer. (If it were an
independent nation, it would be China's eighth-largest trading partner.) We also
know that it is maniacal about low prices. (Some economists say it has
single-handedly cut inflation by 1 percent in recent years, saving consumers
billions of dollars annually.) We know that its labor practices have come under
attack. (It charges its workers so much for health insurance that about
one-third of them do not have it.)
But the more than 250 sociologists, anthropologists, historians and other
scholars who gathered at the University of California here on Monday for a
conference on Wal-Mart came looking for more than the company's vital
statistics. Like archaeologists who pick over artifacts to understand an ancient
society, the scholars here were examining Wal-Mart for insights into the very
nature of American capitalist culture. As Susan Strasser, a history professor at
the University of Delaware, said, "Wal-Mart has come to represent something that
's even bigger than it is."
Indeed, with $256 billion in annual sales and 20 million shoppers visiting
its stores each day, Wal-Mart has greater reach and influence than any retailer
in history. "In each historical epoch a prototypical enterprise seems to embody
a new and innovative set of economic structures and social relationships," said
Nelson Lichtenstein, a history professor at the University of California here
and the organizer of the conference. "These template businesses are emulated
because they have put in place, indeed perfected for their era, the most
efficient and profitable relationship between the technology of production, the
organization of work and the new shape of the market."
In the 19th century, he said, the standard-setting company was the
Pennsylvania Railroad; in the mid-20th century, it was General Motors; and in
the late 20th century, it was Microsoft. Today's prototypical company, he
declared in opening the conference, is Wal-Mart, which, he said, rezones
American cities, sets wage standards and even conducts diplomacy with other
"In short, the company's management legislates for the rest of us key
components of American social and industrial policy," Mr. Lichtenstein said.
Wal-Mart has created a very different model from General Motors, he added,
noting that G.M. helped build the world's most affluent middle class by paying
wages far above the average and by providing generous health and pension plans.
Mr. Lichtenstein said G.M.'s wage pattern spurred other companies to raise
compensation levels, while Wal-Mart's relatively low wages and benefits -- its
workers average less than $18,000 a year -- were doing just the opposite.
The company's pay scale and hard-nosed labor practices, said Simon Head, a
fellow at the Century Foundation and author of "The New Ruthless Economy: Work
and Power in the Digital Age" (Oxford University Press, 2003) mean that
"Wal-Mart is certainly a template of 21st-century capitalism, but a capitalism
that increasingly resembles a capitalism of 100 years ago." He added, "It
combines the extremely dynamic use of technology with a very authoritarian and
ruthless managerial culture."
Wal-Mart declined to send a representative to the conference. "We were
invited to attend, but we passed," said Sarah Clark, a company spokeswoman. "The
agenda looked pretty biased against Wal-Mart."
If Wal-Mart is helping revolutionize labor relations, it is also
revolutionizing consumer patterns. Ms. Strasser said it was the leading exemplar
of a shift toward mass merchandising, which in her view has transformed
customers into consumers. Many Americans, she said plaintively, no longer deal
daily with craftsmen and neighborhood shopkeepers who give them advice on goods.
Advertising is the source of shoppers' information.
Wal-Mart has made a traditional sales force obsolete for another reason, said
James Hoopes, a historian at Babson College, in Wellesley, Mass. When retailing
began centuries ago, salesmen were needed to explain goods to customers. But
Wal-Mart follows a different model. Using technology, the company collects
detailed information on the billions of purchases its customers make each year.
Based on that information, it orders products (at low prices), confident that
customers will like the merchandise and the prices, thus eliminating some of the
need for an informed sales force.
Everyone at the conference seemed to marvel at Wal-Mart's extraordinarily
sophisticated use of technology. The temperature of every one of its more than
3,500 American stores is controlled from its headquarters in Bentonville, Ark.
Logistics gurus keep track of hundreds of thousands of shipments at home and
abroad. Computers also keep close tabs on workers' hours and productivity.
"One store manager told me, 'I could tell you last year, July 12, how much in
sales the store did and how much was rung up by Sally Jo, the cashier, within a
particular hour,' " said Ellen Rosen, a professor of women's studies at Brandeis
University, in Waltham, Mass.
Wal-Mart's in-depth knowledge of what consumers want, coupled with its
immense size, has given the company huge power over its suppliers, effectively
changing the traditional relationship between manufacturer and retailer. It
usually knows more than manufacturers do about what shoppers want this week and
will want next year. With some suppliers complaining that the company has
bullied them, Wal-Mart has caused factories from South Texas to Shanghai to
increase efficiencies continually and to lower their costs and prices.
"It's changed the balance of global manufacturing," said Gary G. Hamilton, a
China expert and sociology professor at the University of Washington.
And not just manufacturing.
"What do low-cost goods mean in light of the pressing issues of the global
environment, global human rights and the global labor force?" Ms. Strasser
asked. "And how do we move beyond the single-minded self-interest of price?"
Low prices come at a cost, she and other speakers insisted, arguing, for
instance, that Wal-Mart encouraged overconsumption and overdevelopment, which
place strains on natural resources and the environment.
"Everything is based on the consumer first," said Edna Bonacich, a sociology
professor at the University of California, Riverside. "Is this the way we want
To Ms. Bonacich, a hopeful sign that at least some people would answer no
came just days before the conference. On April 6 in Inglewood, Calif., a largely
black and Hispanic suburb of Los Angeles, voters rejected a ballot initiative
allowing Wal-Mart to build a store there, with many saying they were unhappy
with its wage levels, fierce anti-unionism and efforts to circumvent land-use
Other conference participants pointed to a four-month labor dispute in which
the grocery workers' union fought a push by Southern California supermarket
chains to cut wages and benefits for many workers because they feared Wal-Mart's
expansion plans in the state.
"The fact that it is starting to produce a backlash in a lot of different
areas has heightened the interest," Ms. Strasser said.
But Mr. Hoopes questioned whether price-minded American shoppers would ever
rush to the barricades to battle Wal-Mart.
"Wal-Mart has been tremendously helpful to the American consumer," he said.
"It's lowered prices for lots and lots of people. People are voting with their
feet and with their dollars by shopping at Wal-Mart."
He added, "If anybody is proposing that they're going to solve what they see
as the Wal-Mart problem by urging people not to think of themselves as
consumers, they're barking up the wrong tree."