Advocatus Diaboli

Fazil Mihlar has an article in the Vancouver Sun titled Saint Wal-Mart?. (Conical hat tip to LRC.) The question mark is superfluous – it’s the usual right-libertarian hagiography of Wal-Mart.

He includes his e-mail at the end of the article, so I wrote him the following note:

I read your article on Wal-Mart with interest. But I think you’ve left out one important source of Wal-Mart’s low prices – government intervention.

WaltchmartWal-Mart stores frequently acquire their land by eminent domain; in other words, they get to acquire land at lower prices than those at which the owners would be willing to sell voluntarily.

Once in business, such stores further benefit from various sorts of corporate welfare, both the direct kind and such indirect forms as the mass of regulations that have the indirect effect of making it harder for small companies to compete with big ones. As companies grow, diseconomies of scale eventually surpass economies of scale, placing a natural curb on their growth; but government regulation, by stalling competition, allows companies to continue growing past this point by externalising their costs.

Moreover, Wal-Mart’s entire business model depends heavily on federal transportation subsidies; so its competition with local businesses doesn’t exactly occur on a level playing field.

Both Wal-Mart’s critics and its defenders usually see it as an embodiment of the free market. But to me Wal-Mart looks like just one more special interest feeding at the taxpayers’ trough.

I’m opposed to Wal-Mart because I like the free market.

If others want to mail him, he’s at

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71 Responses to Advocatus Diaboli

  1. Brother Mark, Amen April 2, 2009 at 10:10 pm #

    “Moreover, Wal-Mart’s entire business model depends heavily on federal transportation subsidies”

    Are these subsidies special to Wal-Mart? Seems every business depends to the same extent on federal transportation system.

  2. Daniel April 3, 2009 at 7:21 pm #

    Stephan Kinsella: I am not sure what corporate welfare you mean. But I seriously doubt it exceeds or even compensates for the harmful effect of state regulations and taxes that are applied to the company.

    I’m sorry but this little bit puzzles me. I was under the apparently mistaken assumption that individuals chose to incorporate voluntarily. Further, I assumed that corporate taxes (unlike personal income taxes) are also voluntary, for precisely this reason. These regulations and taxes you claim as being “harmful” are accepted freely by people who are fully informed of their existence before signing the papers and agreeing to incorporate. Why? It would seem to me that they have assessed that the advantages of incorporating far outweigh the disadvantages. (And that is before any additional potential benefit of corporate welfare.)

    • Mike D April 3, 2009 at 7:34 pm #

      Daniel, this is irrelevant. Individuals freely choose almost every activity that is taxed by the government, including employment and consumption. But as Stephan would likely say, “So what?” Just because they choose to take a course of action that the government has decided to penalize does not mean that they have in any way “consented” to the penalization, since the government threatens them with violence if they do not comply.

  3. Bob Kaercher April 14, 2009 at 10:28 am #

    In skimming over that report that Roderick linked earlier in this thread, one thing I noticed is that a lot of municipal governments like to subsidize Walmart stores using TIF (Tax Increment Financing) schemes. TIFs have been particularly popular here in Chicago. Mayor Daley loves this type of racket. A TIF is a particularly sneaky and pernicious way to get local taxpayers to subsidize a politically favored business.

    I can’t help but wonder lately if this ongoing discussion between left-and non-left libertarians on this topic is not entirely the right one to have and that the two sides are grappling toward conclusions that are somewhat irrelevant to the bigger picture.

    To be sure, there are some very obvious, cut-and-dried instances where a net beneficiary of the statist system can be clearly identified (the players in the military-industrial-congressional complex immediately come to mind). But I agree with Stephan that below that obvious level of benefit from statist force and coercion, it all tends to get rather “messy” from the point of view of libertarian ethics. Rather than trying to identify a market actor as either clearly villainous or heroic in these more muddled situations, maybe we should instead keep focusing our efforts (as, of course, many here already make great effort to do in a variety of forums and publications) on educating and persuading people on the destructiveness of statism, which means attempting to convince many of the very people who perceive themselves as somehow benefiting from it, which as far as I can see at this point, is about 95% of the population. They see some “common good” in cannibalizing themselves and one another. This doesn’t necessarily mean that I think they’re all “evil” and “criminal”, though perhaps some of them are. A great many of them are more likely just very, very confused, trying to make their way in a world that initially was not of their making.

    In this system, most market actors are likely both “heroes” and “villains” to some degree or other, depending on the context. I would think this implies that one can observe specific instances of state-enforced privileges lobbied by and granted to particular businesses without all sorts of dark and sinister implications that the observer is somehow anti-market in doing so (this in fact would highlight one’s pro-free market cred, I would think). At the same time, another observer can also point out that it’s the rent-seeking and rent-granting apparatus itself that must be abolished instead of particular forms of business, without all sorts of dark and sinister implications that the observer is somehow shilling for the established order.

    There’s my two pennies.


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