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 fmihlar@png.canwest.com.

, ,

71 Responses to Advocatus Diaboli

  1. Sheldon Richman April 2, 2009 at 8:49 am #

    Stephan writes: “So why single out Walmart?”

    Because so much praise is lavished on it by people who say they favor the free market. If Kmart got this kind of praise, I’d criticize it more often.

    • Stephan Kinsella April 2, 2009 at 10:51 am #

      But pointing out unlibertarian aspects of Walmart is trivial, and no one disagrees with it. There is more than this–there is the implicit claim that they are in effect, essentially criminal, or part of the state–not deserving of protection of property rights. Not legitimate owners of their nominal property. To claim this requires a sweeping, careful, comprehensive libertarian-compatible theory about all this, and careful application to a concrete situation replete with relevant factual details. That has not been done here. It has not even been attempted.

      • Neverfox April 2, 2009 at 4:48 pm #

        there is the implicit claim that they are in effect, essentially criminal, or part of the state–not deserving of protection of property rights. Not legitimate owners of their nominal property.

        In Roderick’s post? I don’t see any of that there. So I also don’t see any reason to decry the lack of an attempt at the type of careful analysis you describe. Actus non facit reum nisi mens sit rea.

        • Stephan Kinsella April 3, 2009 at 12:05 am #

          Rebus sic stantibus!

        • Jeff Henderson April 5, 2009 at 2:46 am #

          Linguam Latinam non loquor!

      • Araglin April 2, 2009 at 6:25 pm #

        Mr. Kinsella — Do you think Walmart has at least prima facie rights (as ‘nominal owner’) to land that it obtains via eminent domain? I understand your concerns about sweeping assertions of complicity with the state as voiding out any and all claims to property (and I share many of them), but do you acknowledge that Walmart’s claim to land based on nominal title deriving from a ‘taking’ is a nullity?

        Perhaps they shouldn’t be violently outsted or otherwise deprived of possession without some sort of orderly process (establishing that the person seeking to outs Walmart has a paramount claim), but that’s simply to minimize on violence arising when one thief tries to steal (already-stolen) property from another.

        • Stephan Kinsella April 3, 2009 at 12:01 am #

          Araglin:

          Mr. Kinsella — Do you think Walmart has at least prima facie rights (as ‘nominal owner’) to land that it obtains via eminent domain?

          I think it’s messy. I think that they *paid* for it, right? And even the original owner was paid some compensation. In my view, if the original landowner wants his land back, he has the better claim (but presumably would have to return some of the compensation he received). But vis-a-vis the rest of the world Walmart has the better claim, of course.

          The more it becomes a lobbyist for this, the more it becomes a criminal and has a worse claim. But I really doubt this is a common thing for Walmart.

          This problem is not confined to Walmart. Suppose Kevin Carson buys a house, from Mr. A. But Mr. A got it from a tax sale, b/c the state foreclosed on previous owner B, b/c of tax deficiencies. Or, perhaps B was foreclosed on by the bank, because he was impoverished by state regulations. Does Kevin Carson have good title to his house? I don’t know. Presumably so–until some particular person can make out a better claim.

        • Mike D. April 3, 2009 at 8:24 am #

          “The more it becomes a lobbyist for this, the more it becomes a criminal and has a worse claim. But I really doubt this is a common thing for Walmart.”

          It’s an incredibly common thing. This is precisely how eminent domain seizures like this work. Do you really think the state goes around stealing land on spec?

        • Chris D. April 3, 2009 at 5:20 pm #

          “In my view, if the original landowner wants his land back, he has the better claim (but presumably would have to return some of the compensation he received).”

          Interesting, but wouldn’t Rothbardian appropriate compensation theory demand the aggressor repay double the amount stolen? If so, Wal-Mart would probably owe even more to the victim of eminent domain, since the compensation they originally received was probably undervalued, given the nature of the forced transaction.

      • Robert Chesnavich April 13, 2009 at 11:45 pm #

        “there is the implicit claim that they are in effect, essentially criminal, or part of the state–not deserving of protection of property rights. Not legitimate owners of their nominal property. To claim this requires a sweeping, careful, comprehensive libertarian-compatible theory about all this, and careful application to a concrete situation replete with relevant factual details. That has not been done here. It has not even been attempted.”

        This could have something to do with the fact that this “claim”, in your own words is “implicit”. But it has not been made *ex*plicitly, and refuting a claim that has not been made, however much you wish to personally submit that it must follow logically from the originally stated opinions, is called a strawman argument.

        You would do far better if you asked Mr. Long whether or not this is what he is claiming, and continue the discussion from there based on his reply.

  2. 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.

  3. 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.

  4. 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.

Trackbacks/Pingbacks

  1. Attack the System » Blog Archive » Updated News Digest April 5, 2009 - April 5, 2009

    […] Saint Wal-Mart? by Roderick Long […]

Powered by WordPress. Designed by WooThemes