August 25, 2006

Wal-Mart as the Cure for Global Poverty?

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 2:08 pm

I’ve certainly been critical of Wal-Mart for losing its way by trying to appease its critics in the US (here and here) and allowing the Chinese Communist Party to set up a recruiting center in one of its Mainland stores, but this TCS Daily piece by Michael Strong makes some awfully important points about what the company has accomplished while pursuing global growth.

Strong certainly comes on strong:

Between 1990 and 2002 more than 174 million people escaped poverty in China, about 1.2 million per month. With an estimated $23 billion in Chinese exports in 2005 (out of a total of $713 billion in manufacturing exports), Wal-Mart might well be single-handedly responsible for bringing about 38,000 people out of poverty in China each month, about 460,000 per year.

There are estimates that 70 percent of Wal-Mart’s products are made in China. One writer vividly suggests that “One way to think of Wal-Mart is as a vast pipeline that gives non-U.S. companies direct access to the American market.” Even without considering the $263 billion in consumer savings that Wal-Mart provides for low-income Americans, or the millions lifted out of poverty by Wal-Mart in other developing nations, it is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people. Moreover, insofar as China’s rapid manufacturing growth has been associated with a decline in its status as a global arms dealer, Wal-Mart has also done more than its share in contributing to global peace.

….. rural Chinese peasants surviving on less than a dollar per day do not regard economic growth, or Wal-Mart factory jobs, as a cancer. When a Mongolian student at a U.S. workshop on globalization heard U.S. college students denounce sweatshops, he shouted: “Please give us your sweatshops!”

An unreflective passion for social justice may be one of the biggest obstacles to creating peace and prosperity in the 21st century. While there are most certainly factory owners in China whom we would rightly regard as criminal in their treatment of their workers, it is very important not to confuse these incidents with the phenomenon of globalization. It is a good thing that Wal-Mart is encouraging more humane standards in its supplier’s factories. And yet it is also important to remember that Wal-Mart’s “vast pipeline that gives non-U.S. companies direct access to the American market” is a vast pipeline of prosperity for the hundreds of millions of rural Chinese whose lives are more difficult than we can imagine.

Act locally, think globally: Shop Wal-Mart.

If the choice is merely preventing starvation with private charity and foreign aid vs. economically uplifting commerce, I know which side I’m on. I wish the folks in Bentonville understood that their doomed-to-failure appeasement efforts and the implied recognition of the Chinese Communist Party could get in the way of the company’s powerful global poverty-fighting formula.

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2 Comments

  1. [...] The initial article at TCS by Michael Strong gives the numbers, but I think that BuzyBlog’s conclusion is what needs to be emphasized: If the choice is merely preventing starvation with private charity and foreign aid vs. economically uplifting commerce, I know which side I’m on. I wish the folks in Bentonville understood that their doomed-to-failure appeasement efforts and the implied recognition of the Chinese Communist Party could get in the way of the company’s powerful global poverty-fighting formula. [...]

    Pingback by Wal-Mart Cures Poverty « Colorado Right — August 25, 2006 @ 5:56 pm

  2. Quote For The Day…

    “I’m of the opinion that how to handle Wal-Mart is among the two or three most important issues facing the country.”Glenn doesn’t think so, but I do. Not for the same reason as the person whose article the quote comes……

    Trackback by triticale - the wheat / rye guy — August 26, 2006 @ 8:37 pm

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