The Cinepro Family Loves Walmart

[_EAllusion]

One the one hand, Kevin thinks Wal*Mart and other larger corporations are evil because of their power to get governments to enforce anti-competitive and unethical practices allowing them to more easily become monopolistic. On the other, he describes this as free market capitalism. The lesson here, it would seem, is that Kevin doesn't know what free market capitalism refers to.

[_EAllusion]

they engage in false advertisement (i.e. why hire a beautiful models to do their commercials instead of just going straight to a random Walmart and letting the viewers see what kind of people really work and shop there?)

I thought this was hilarious. Wal*Mart is evil because they use attractive people in their advertisements. That isn't representative! In addition to this being a condemnation of virtually every business who has ever advertised, instead of, you know, Wal*Mart there's irony here in that Wal*Mart used to be notorious for using fairly average-looking employees in its advertising. Wal*Mart still is much more inclined to use more average looking people in its advertisements than most businesses. This is part of a carefully thought out business strategy rather than an act of benevolence, but it's like saying Whole Foods is the worst grocery store because it doesn't carry enough organic produce. To the extent you have a qualm there, it is more aptly aimed at almost everything else. You have to go to late-night shoestring budget ads for local furniture stores and car dealerships to have a better shot at finding less overtly attractive spokespeople.

[_Kevin Graham]

Without any form of regulations, which is precisely what the Far Right is been pushing for, all businesses are left in a world of market Darwinism. Only those with the power/money, or the competitive advantages, will ultimately survive. The context of "free market" solutions in today's Right Wing rhetoric is always pointing in the same direction: less government is always better; consumers and service providers should be left completely alone and the market should determine the winners/losers. To them that's just. That's God's perfect plan. Little do they know, this has never existed in US history. So whatever virtues they like to refer to in our capitalistic history, they can't divorce their success stories from the fact that our system has always been heavily regulated, and periods of deregulation are those that lead to the greatest risk to our economy.

Monopolies are the natural result of all this and the winners are a tiny minority while the vast majority loses. Tell me why I'm wrong. Tell me that by leaving the "free market" to absolute freedom, corporations will make ethical choices not based strictly on profit. This is bcspace's wet dream that has never reflected our economic reality.

[_Kevin Graham]

I thought this was hilarious. Wal*Mart is evil because they use attractive people in their advertisements. That isn't representative! In addition to this being a condemnation of virtually every business who has ever advertised, instead of, you know, Wal*Mart there's irony here in that Wal*Mart used to be notorious for using fairly average-looking employees in its advertising. Wal*Mart still is much more inclined to use more average looking people in its advertisements than most businesses. This is part of a carefully thought out business strategy rather than an act of benevolence, but it's like saying Whole Foods is the worst grocery store because it doesn't carry enough organic produce. To the extent you have a qualm there, it is more aptly aimed at almost everything else.

Oh but it isn't. Apparently, you haven't been to any of the three Walmarts within a five mile radius of my home. Yes, I know companies typically hire beautiful actors for their advertisements. It is a deception by all companies, but more obvious with Walmart. Their advertisements with "shiny happy people" are funny because of the reputation they have for employing and servicing the poorest and saddest among us.

[_EAllusion]

Without any form of regulations, which is precisely what the Far Right is been pushing for, all businesses are left in a world of market Darwinism.

First, free market capitalism entails a baseline set of regulations surrounding the enforcement of contracts, property rights, and providing remedies for infringements upon them. You have confused this with a type of anarchy that even anarcho-capitalists don't believe in.

Second, to run with your analogy, Darwinism produces biodiversity. Competition produces a variety of solutions and niches, but you want to argue that the end result of competition is an uber-monopoly. Darwinism is a particularly poor analogy for that given that it produces millions of different forms in an ever changing balance. There are no monopolies in life.

Monopolies are the natural result of all this and the winners are a tiny minority while the vast majority loses. Tell me why I'm wrong.

Monopolies tend not to form unless aided by the government creating barriers to entry for potential competitors. Try to think of examples of monopolies where this isn't the case. It's hard for a monopoly to exist and manipulate the supply/demand curve in their favor without creating a window for alternative competitors to steal market share. But suppose you were correct on this point. One can still be extremely free market in one's philosophy while in principle supporting anti-trust measures that virtually never would have to be used. It doesn't follow from that to the sweep of government involvement you actually are favoring. That represents a false dichotomy.

Tell me that by leaving the "free market" to absolute freedom, corporations will make ethical choices not based strictly on profit. This is bcspace's wet dream that has never reflected our economic reality.

To quote Adam Smith, it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. Capitalism is doesn't produce efficient, fulfilling results from expecting people to naturally act with ethical regard for another. It comes from the fact that having a pricing system naturally responsive to people's desires is actually a fairly effective way for people's desires to get fulfilled. It creates a mutually beneficial feedback loop of self-interest. That said, I do think you disregard the extent to which businesses are run by real people who have varying degrees of conscience in their actions. Democrats tend to be high on Costco for its business practices and its CEO being a major Democratic booster. That happens in part because its something customers want to see and in part because it isn't run by amoral automatons.

[_EAllusion]

Oh but it isn't. Apparently, you haven't been to any of the three Walmarts within a five mile radius of my home. Yes, I know companies typically hire beautiful actors for their advertisements. It is a deception by all companies, but more obvious with Walmart. Their advertisements with "shiny happy people" are funny because of the reputation they have for employing and servicing the poorest and saddest among us.

It's the largest employer and retailer in the country. Their workforce and shopping base is incredibly diverse by mathematical necessity. I think you are displaying some myopic, stereotypical thinking about Wal*Mart being a haven of ugly, fat, red-neck types.

Apple, by contrast, advertises itself as a brand for affluent, creative, trendy counter-culturalists. This is hilarious because it is arguably the most ruthlessly monopolistic corporate behemoth of any of the major tech firms and owing their products could not be any more conformist. But hey, they've managed to sell rebellion as an advanced marketing strategy more effectively than almost anyone, ever. So bully for them. But something people should recognize is that the average consumer of their products is not anything like the image they craft. It can't be. Too many people buy their stuff and too many of them are average Joes. It's just a brand.

So it is with Wal*Mart. You've just bought into a negative stereotype of their consumers that can't possibly be true for its global reach. And, ironically, that stereotype derives from one of Wal*Mart's very own marketing strategies of trying to get poor whites to culturally identify with them. That's part of why they are notorious for using more average looking people in their advertisements, which is again why you picked a criticism that is humorously off-base on a number of levels. Next you'll be here informing us that Mentos is engaging in false advertising because most people eating them aren't attractive Dutch people thinking their way through zany situations with cornball creativity.

[_EAllusion]

http://www.youtube.com/watch?v=O4-e4nlfdRI

Eagleman can't lay eggs. This advertisement is a lie!

[_Kevin Graham]

First, free market capitalism entails a baseline set of regulations surrounding the enforcement of contracts, property rights, and providing remedies for infringements upon them. You have confused this with a type of anarchy that even anarcho-capitalists don't believe in.

Easy to assume if you just skipped through my posts. I don't know what it is with you in responding to my posts. Generally you're remarks are well thought out and informative, but when responding to anything I post you seem to jump the gun and abandon all comprehension. Take for instance my qualification of free market capitalism. It is as if you decided to just skip over it so you could pretend your straw man has merit. I said, and I quote:

Right Wingers harp on the virtues of Capitalism in the sense that government intrusion is always a bad thing, but what you folks do not understand is that pure "free market" Laissez-faire Capitalism has never existed in this country, and arguably anywhere else. So what we're really talking about is degree of Capitalism. I'm saying Capitalism allowed to run a muck, unregulated, naturally leads to monopolies, which means no choice.

So you're bitching at me for supposedly misunderstanding that free market capitalism necessarily entails some kind of regulation, when in fact I had already made it clear that I'm criticizing a specific type of Capitalism; the kind Right Wingers generally claim they want. While cinepro and folks like droopy love to say I'm all "black and white" on this issue, the exact opposite is true. For them you're either a Socialist or a Capitalist. Any attempt to support or promote regulations on businesses means you're the former and legislators taking such measures means we're on a path towards Socialism. That's how they see it. To them the economy would be perfect if company owners were only allowed to do whatever they wanted, because in their worldview, what they want is always what's best for consumers. I've heard them say it on this forum many times. The market regulates itself. Laws and regulations hinder prosperity. This is their doctrine and it is preached on a daily basis.

Second run with your analogy, Darwinism produces biodiversity. Competition produces a variety of solutions and niches, but you want to argue that the end result of competition is an uber-monopoly. Darwinism is a particularly poor analogy for that given that it produces millions of different forms in an ever changing balance. There are no monopolies in life.

Give me a break EA, you know damn well what I meant with this analogy. Obviously I'm referring to the "dog eat dog" world or natural selection aspect of Darwinism, the point being there are no rules or system of ethics or morality governing it. Dumb luck and blind chance plays a much larger role in determining the winners and losers in today's "capitalism" than you're willing to admit. As it is with natural selection, the survivors are determined by who has the most advantages. But you're going to go off on a rant about how the analogy is imperfect. Well, no crap. What analogy is perfect? I had hoped someone picking up my point about an unregulated economy would see the relevance, but you seem hell bent on arguing just for the sake of arguing.

Monopolies tend not to form unless aided by the government creating barriers to entry for potential competitors.

That's just another example of their money doing all the work for them. But my argument is that regulation is the only thing preventing the big companies from forming monopolies. You have presented no argument to the contrary, but instead changed the argument to address how companies can sometimes use governments to monopolize a market. Well no crap. How does this change the fact that corporations by their very nature are designed to maximize profits. In fact, publicly traded outfits have the legal obligation to make money for their shareholders whether they want to or not. The best way to continuously maximize profits is to corner markets and put your competition out of business. The inevitable result is monopoly. Of course we've always had some degree of regulations so you can't expect me to give you examples of completely unregulated markets. They don't exist. But we've seen enough from our own economic history to know that there isn't a corporation out there that isn't trying to make more money. What is the limit? There are no limits. They will not stop pursuing this endeavor until they own 100% of the market.

A classic example was when AT&T bought more companies to own the market, and was broken up by the government thirty years ago. The battles between Rockefeller, JP Morgan and Andrew Carnegie are also textbook examples of what happens when companies are allowed to operate with minimal to zero regulation.

One can still be extremely free market in one's philosophy while in principle supporting anti-trust measures that virtually never would have to be used. It doesn't follow from that to the sweep of government involvement you actually are favoring. That represents a false dichotomy.

"Sweep of government involvement"?? You're highlighting exceptions while I'm discussing the general rule.

I do think you disregard the extent to which businesses are run by real people who have varying degrees of conscience in their actions. Democrats tend to be high on Costco for its business practices and its CEO being a major Democratic booster. That happens in part because its something customers want to see and in part because it isn't run by amoral automatons.

That's all well and good that COSTCO has a CEO with a conscience, but you seem to think this one example proves there isn't a problem with the way a publicly traded corporation is designed and how it operates. Because the fact that COSTCO treats its employees well, is a point of strong criticism by Wall Street. If it reaches the point where shareholders decide his actions are costing them too much money, well guess what? He get's fired by the shareholders. Why? Because in the corporate world, "treating employees well" isn't considered profitable. And the shareholders are the ones with all the power. A CEO keeps his job only as long as he can keep his shareholders satisfied with their quarterly statements.

This is from the Wall Street Journal...

Costco’s Dilemma: Is Treating Employees Well Unacceptable for a Publicly-Traded Corporation?:

Costco’s kind-hearted philosophy toward its 100,000 cashiers, shelf-stockers and other workers is drawing criticism from Wall Street. Some analysts and investors contend that the Issaquah, Wash., warehouse-club operator actually is too good to employees, with Costco shareholders suffering as a result.

“From the perspective of investors, Costco’s benefits are overly generous,” says Bill Dreher, retailing analyst with Deutsche Bank Securities Inc. “Public companies need to care for shareholders first. Costco runs its business like it is a private company.”

It seems Wall Street understands the same point I've been making all along. Costco is an anomaly whose kind-hearted practices probably won't survive because of the well understood principles of cost-cutting and profit-maximizing mechanisms that make shareholders wealthier, which by law, is the corporation's only legal obligation. It has no legal obligation to make its employees happier, its environment cleaner, its consumers better off, etc.

So for you to take an exception like this and then spin it as evidence that this is really all about the ethics of any given CEO, is nothing short of disingenuous. Either that or you still do not understand or appreciate how a publicly traded corporation operates, and under what rules.

[_EAllusion]

So you're bitching at me for supposedly misunderstanding that free market capitalism necessarily entails some kind of regulation, when in fact I had already made it clear that I'm criticizing a specific type of Capitalism; the kind Right Wingers generally claim they want.

You continue to be confused even when I explicitly explained it. Lassiez-faire capitalism does not involve literally no regulation, not because no system is purely capitalistic, but because a purely capitalistic system still would involve things like property rights. It just involves only a specific kind of regulations. A key insight of capitalism is understanding that there needs to be a certain set of enforceable groundrules in economic negotiation and exchange. Without those regulations, it isn't capitalism, as those rules are fundamental to what it is. You are busy arguing with a strawman version of "right wingers" that don't really exist outside of hyperbolic rhetoric. The desire for deregulation is the desire to remove specific kinds of impediments to exchange, not to return to a state of nature. What you seem to think of as "pure" capitalism isn't capitalism at all.

Give me a break EA, you know damn well what I meant with this analogy. Obviously I'm referring to the "dog eat dog" world or natural selection aspect of Darwinism, the point being there are no rules or system of ethics or morality governing it.

Both natural selection and capitalist trade involve discernible rules and contain moral actors, so bad analogy on both fronts? You're trying to invoke Herbert Spencer's social darwinism, but like the concept of moral relativism, the modern use of that term is a pejorative rather than something anyone actually believes in as its advocates are so few. And the idea behind social darwinism is a gradual progression in efficiency to the maximize aggregate standard of living. The analogy is meant to relate to actual natural selection where you see diversity highly adapted to every problem imaginable.

But my argument is that regulation is the only thing preventing the big companies from forming monopolies.

This rock in my pocket is the only thing keeping tigers from mauling you right now. Better hope I don't lose my rock. It'd help if you provided some form of argument indicating this.

You have presented no argument to the contrary, but instead changed the argument to address how companies can sometimes use governments to monopolize a market.

My point actually was that's the only examples we are really aware of. Anti-trust laws are rarely invoked, and when they are it is usually against companies that either 1) really weren't monopolies and/or 2) extensively used the government to gain competitive advantage ala Ma Bell. The lack of constant need to invoke antitrust measures and the reality of broad-competition across a variety of market niches suggests that your law of monopolistic inevitability isn't correct and it certainly isn't being supported by anything other than a blind assertion that corporations are evil and would like to form monopolies if they could.

I also argued that if a monopoly uses is monopoly power to bend the supply demand curve too far, that will naturally create space for competitors to enter the market and offer a superior product. If the vertically and horizontally integrated Widgets R' Us Corp starts offering too bad of a product at too high of a price, eventually it will be beat by a nascent Widget competitor or, more likely, a Widget alternative. This exists as a natural check on monopolies getting too inefficient. You know, assuming they can't use the government to crush their competitors with fees and regulations.

The best way to continuously maximize profits is to corner markets and put your competition out of business.

Good thing lots of businesses are competing against one another to do that.

The inevitable result is monopoly.

I guess I missed that part in microecon.

"Sweep of government involvement"?? You're highlighting exceptions while I'm discussing the general rule.

Actual trusts are exceedingly rare. At your most successful, you are arguing for a highly limited anti-trust regulation as a necessary check on the market. That seems to be quite far away from the vast majority of regulations economic conservatives are opposing that you are condemning them for.

Why? Because in the corporate world, "treating employees well" isn't considered profitable.

Costco is insanely profitable, and part of its business model specifically is related to how it treats its employees. There are multiple kinds of ways to generate a profit much in the same way their are multiple ways to survive and reproduce in nature. That some people fret about whether this model is successful doesn't change whether or not it actually is. Given that it's one of the 25 largest companies in the United States, they're not exactly killing themselves by trying to have more skilled, better compensated workforce than other retailers typically shoot for. I used it as an example because it probably does worse than it could because of the philosophy of its leadership, but that was my point then, wasn't it?

So for you to take an exception like this and then spin it as evidence that this is really all about the ethics of any given CEO, is nothing short of disingenuous.

Actually my argument was that resource fulfillment in capitalist economics comes from mutually reinforcing self-interest, which you didn't seem to grasp. You don't have access to a wide variety of foods because people are personally worried about you having a well-balanced diet. You have that because it is in their interest to produce those items for you. But your idea that large businesses are run by amoral people who will harm employees and consumers as much as they can in pursuit of the most pennies possible is also mistaken, since the personal views of business leaders do have some influence on their operations. Company ethics are also restricted by consumer demand, but sometimes business leaders just have their own ideas about what is right and proper to do. I brought up Costco as one example, but is far from the only example.

[_Darth J]

I have no problem with Walmart. Of course we joke about it being the local "Try 'n' Save". However, the instant they unionize, I will oppose them fully.

So, refusing as you do to patronize businesses that have unionized employees, you of course fully oppose professional sports and major studio movies and TV shows.