| Fazil Mihlar |
| Vancouver Sun |
Saturday, February 09, 2008
|
Wal-Mart deserves the 2008 Nobel Peace Prize. And the Vatican may want to beatify the world's largest retailer.
CONSIDER THAT WAL-MART:
- Provides employment to 1.9 million people; the best defence against poverty is a job.
- Creates thousands of job opportunities for people in developing countries like China and India; this keeps hunger at bay in many households.
- Doles out hundreds of millions of dollars each year in dividends that help fund the retirement of millions of people; the company had sales in excess of $348 billion and a net profit of $11.3 billion in 2007.
- Sells food, clothing and other necessities to Canadians, Americans and others at prices that are 15 to 25 per cent below what other supermarkets charge; this helps millions of low-income families stretch their dollars.
- Pushes the inflation rate down and helps keep interest rates low; this comes in handy for millions of families when borrowing to buy a house or household appliances.
- Disburses $415 million in cash and in-kind merchandise annually to 100,000 charitable organizations around the world.
- Pursues environmental sustainability; sells more organic produce than most retailers; works with the Clinton Foundation to lower prices on sustainable technologies such as energy-efficient lighting and building materials; has opened the first in a series of high-efficiency stores that will use 20 per cent less energy than a typical Wal-Mart. And its proposed Vancouver store is more environmentally friendly than any building in the Lower Mainland.
All of this was made possible by Wal-Mart's innovations.
The retail business is characterized by large inventories, big sales volumes and a thin profit margin. That means retailers must reduce the cost of holding inventory, so efficient warehousing and transportation becomes critical.
A recent publication from Wharton Business School at the University of Pennsylvania suggests that the key to efficiency at Wal-Mart is its distribution.
The retailer integrated its data systems with those of its suppliers. This allows the company to watch what items are selling. This in turn allows the firm to keep inventory costs down, and vendors produce only what's moving fast. Estimates suggest that almost 70 per cent of Wal-Mart's merchandise is sold before the company has to pay the supplier.
Improving business productivity is the sure-fire way of increasing living standards. Ask any economist of repute.
While Wal-Mart's primary intent is not to do all the aforementioned social good, what it has done and is doing is raising the living standards of millions of families around the world.
So if we are concerned about consequences and not just intentions, doesn't Wal-Mart deserve the peace prize?
"The philosophers have only interpreted the world in various ways," Karl Marx said, "the point, however, is to change it," Wal-Mart has done more to change the world for the better than most anti-Wal-Mart do-gooders in North America ever have or could.
Recall that the 2006 Nobel Peace Prize went to Muhammad Yunus and the Grameen Bank, started in Bangladesh and now established in many developing countries, for their innovative efforts to create economic and social development from the ground up by providing credit to those whom mainline banks would not lend to.
And let's not forget Jimmy Carter, the former president of the United States, who received the peace prize for his efforts to advance democracy and human rights and to promote economic and social development in the Third World.
On the basis of the evidence, it is impossible to argue that Yunus or Carter have done more than Wal-Mart to alleviate poverty.
The company that Sam Walton established in 1962 in Arkansas is not without its flaws. Critics allege that Wal-Mart doesn't pay a "living wage" or provide health care. As well, they claim that the company puts many independent small retailers out of business and destroys communities.
Wal-Mart pays an average wage of $10 in North America and 90 per cent of its American employees have health coverage. In the past few years, Wal-Mart has been named the best employer in Canada. So much so for exploiting workers.
There is not much evidence that Wal-Mart puts mom-and-pop operations out of business. In fact, studies demonstrate that if shopowners adapt to the ever-changing retail market, they can thrive after Wal-Mart comes to their town.
As to the charge that it destroys communities, how come towns like Cranbrook in British Columbia and Miramichi in New Brunswick have petitions with 3,000 and 11,000 people respectively urging the company to set up shop?
Even assuming that Wal-Mart is an imperfect entity (it has paid fines for violating labour laws), that's not reason enough to deprive it of the peace prize. After all, many Nobel laureates aren't exactly without flaws -- Henry Kissinger (1973), Menachem Begin and Anwar Sadat (1978), or Yitzhak Rabin and Yasser Arafat (1994) come to mind.
Now, to the possibly more controversial issue of beatification/sainthood for Wal-Mart.
Pope John Paul II beatified Mother Teresa, who died in 1997. In 2002, the Vatican recognized the healing of an Indian woman as the miracle needed to beatify Mother Teresa.
One can plausibly argue that Wal-Mart's innovations and the resulting "Everyday Low Prices" are nothing short of a miracle.
Last, but not least, Wal-Mart is able to provide low-priced goods because the company is positively parsimonious. Its executives fly cattle-class, share low-priced hotel rooms and empty their own trash. Every penny saved ends up in the pockets of customers, many of them on low incomes.
How much more saintly can a corporate entity get?
fmihlar@png.canwest.com
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