The goliath that reshaped America

Did Wal-Mart bring us a triumph of capitalism - or its darkest hour?

The world's largest firm by sales (although it will yield the title to ExxonMobil this year, owing to oil prices), Wal-Mart invites debate like no other company. The No. 1 employer in perhaps 24 states, it is a steamroller of mom-and-pop shops, a union-defying exploiter of the "associates" it treats as serfs. Or, it is a shrewd, hardball-playing handler of its suppliers, a bargain-stacked bazaar for the hard-pressed. It all depends on whom you ask.

But one point is not disputed: Wal-Mart is an unrelenting shifter of the retail - and social - landscape.

As such it has been examined from both poles. The third edition of Texas newspaperman Bill Quinn's 1998 book "How Wal-Mart is Destroying America (and the World)" rolled out in 2005. So did "The Wal-Mart Way," by senior Wal-Mart executive Don Soderquist, finally presenting the Arkansas-based retailer's own perspective and principles.

Now come others, wisely working the middle ground. A dozen essayists parse the meaning of the late Sam Walton's enigmatic store in Wal-Mart: The Face of Twenty-First Century Capitalism, edited by labor historian Nelson Lichtenstein. But the breezier read, by far, comes from Charles Fishman, a senior editor at Fast Company.

The Wal-Mart Effect saunters through the influential economic "ecosystem" that the discount chain represents with clarity, compelling nuance, and refreshing objectivity.

Swaths of well-placed narrative - some of it first-person - put the reader in the aisles, hunting down light bulbs, taking in the sight of 12-lb. jars of whole pickles, sorting through the mixed emotions that a trip to Wal-Mart can evoke.

Fishman describes, for example, the remarkable efficiency of his local Wal-Mart (he goes to buy, never to "shop") in fully renovating without closing.

Fishman's main point: Wal-Mart is a force that requires new thinking about management. He comes around to explaining Wal-Mart's effect on US inflation (it holds it down). He shows the somewhat illusory nature of its job-creation numbers. And he dutifully follows the painful labor chain - which is by no means exclusive to Wal-Mart - back to the workers (most often foreign workers) who pay for the "dark bargains of the global economy."

Fishman also explains how Wal-Mart appeals to pennypinchers but leaves many customers feeling conflicted, not cheered in the way that, say, a Southwest Airlines experience might leave them.

But first come the passages that define Wal-Mart's scale. However many superlatives you have heard applied to the company, you will still be astonished.

Think Target seems ubiquitous? Wal-Mart, which now employs 1.6 million people, sells more by St. Patrick's Day than Target does all year.

Wal-Mart has crashed the party even in industries that seemed invulnerable.

"In little more than a decade, from a standing start, Wal-Mart mastered the US grocery business and remade what turned out to be a complacent industry in its wake," Fishman writes. "Today Wal-Mart sells more groceries than any company not just in the United States but in the world...."

Some of what the goliath has wrought is undeniably good. In the early 1990s, when it ditched the practice of boxing deodorant containers in the interest of thrift, the industry followed suit, saving an incalculable amount of cardboard.

Today, when Wal-Mart negotiates with suppliers, it tends to get its way. The firm has an obsession, Fishman reports, "almost a corporate fetish" with the kind of cost- and price-cutting that have made Wal-Mart a consumer magnet.

Fishman quotes a former president of Tropicana on dealing with the Wal-Mart muscle. "They won't relent. They'd just as soon do business without Tropicana, and keep faith with their customers."

So are little guys necessarily ground up in Wal-Mart's maw? No. Fishman walks readers through the case of a father-daughter firm from Minnesota whose microwaveable bacon-cooking device sees profitable distribution through the store while keeping their manufacturing local.

But Fishman is no apologist. He gives the dark-siders their due. "What looks like missionary zeal when you're a quirky regional retailer comes across much differently when you're the most powerful company, and the largest employer, in the world," he writes.

In a chapter called "the Squeeze," Fishman uses the story of those gallon jars of pickles to show how Wal-Mart effectively bent the principles of the free-market economy to get from supplier Vlasic what it needed, at Vlasic's expense.

Wal-Mart, Fishman explains, does not concern itself with being genial. Dangling the prospect of volume sales, it essentially gets companies hooked.

Some firms break away, and talk. Fishman details the successful fight of Snapper, the lawnmower company. Given the scale on which it works, Snapper saw in its Wal-Mart partnership a future of off-shore manufacturing and a push to go down-market. It chose to resist the lure.

"[Wal-Mart] not only has no rivals, it often seems impervious to challenge, let alone accountability," writes Fishman. "Many of the most basic, and most urgent, questions about Wal-Mart, those at the core of the public debate, are unanswered. Wal-Mart's own forty-year history of absolute secrecy, including forbidding its suppliers to talk about Wal-Mart, has only deepened the mystery of Wal-Mart's impact."

It's not that Wal-Mart is greedy or disingenuous, Fishman maintains: "How could a company so ... unpretentious, so frugal, a company so driven, so tireless, so determined to drive a hard bargain be bad?"

Wal-mart is perhaps a perfect fit for the culture that spawned it - one that simultaneously values frugality and loves to consume.

But America now confronts a creation that grew from a simple idea to a social test. "What changes is the scale," writes Fishman, "what changes is the intangible - the power, the impact that comes with scale."

Clay Collins is a Monitor staff writer.

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