Abstract
N. Lichtenstein, The Retail Revolution: How Wal-Mart Created a Brave New World of Business New York: Henry Holt, 2009. 432 pp. $17.00. ISBN 9780312429683 (pbk)
Nelson Lichtenstein has written an insightful and compelling book that explains Wal-Mart’s relationship to their ‘associates’, to the USA and to the world. His work can also be seen as a case study of contemporary discount retailer practices. Closely considered are the hyper-efficient practices either invented or ‘borrowed’ by Wal-Mart founder Sam Walton, and the unique Southern American culture Wal-Mart has fostered. Using a huge variety of sources, Lichtenstein is able to penetrate the secretive world of executive Wal-Mart, which stands in sharp contrast to the folksy charm carefully crafted by ‘Mr. Sam’.
For those not already adept in the intricacies of history of retailing in the first half of the 20th century, Lichtenstein provides an overview, focusing on those details that pertain to the later growth of Sam Walton’s Wal-Mart. Although Lichtenstein rightly vilifies Wal-Mart and its executives in its later stages, his tone is somewhat reverential of the, admittedly, impressively young, entrepreneurial Sam Walton operating his chain of Ben Franklin Stores, and eventually Wal-Mart. Particularly of interest is Lichtenstein’s thorough exploration of ‘the South’ as an uniquely fertile breeding ground for a company such as Wal-Mart, its subsequent reliance on Southern mores to aid its growth, and the manifestation of Southern values in its far flung reaches from Sacramento to Shanghai. Lichtenstein shows how Sam Walton first cultivated his workforce from the anti-Yankee, anti-New Deal, poverty stricken, free market and Christian sentiment, and how these Southernisms allow a brutally efficient company to maintain a folksy and familiar tone.
After a lucid overview of the formation of discount stores and the formation of Sam Walton’s Wal-Mart, Lichtenstein, a labour historian, moves to an analysis of Wal-Mart primarily in relation to labour. Although this approach might be a shortcoming in other studies, the importance Wal-Mart places on keeping labour costs low makes Lichtenstein’s choice of lens an effective tool. Brutal efficiency at every step of the business chain is what brings Wal-Mart customers their ‘Everyday Low Prices’. As innovative as Wal-Mart has been over the years, one basic idea underlies every initiative Wal-Mart takes: keep the cost on someone else’s books. For example, this attitude led to their use of just-in-time ordering and their hyper-efficient distribution centres, ending the need for risky and potentially costly warehouses.
Unfortunately a similar conviction has led to a dastardly squeeze on their labour force. Despite the many official sermons from Wal-Mart executives and managers on the importance of the Wal-Mart family and ‘servant leadership’, ‘associates’ are really seen as just one more cost to keep down. Encouraging high turnover in an attempt to discourage high wages, pushing healthcare costs on employees through Health Savings Accounts, and implicitly encouraging off-the-clock work while decrying any employee who would dare to work paid overtime, Wal-Mart squeezes labours costs to a bare minimum.
To this end, and above all else, Wal-Mart battles labour unions with a bloodthirsty zeal. Mobile anti-union squads, psychologists and entire law firms are kept employed with the single goal of keeping out labour unions, and they are extremely successful. In fact, the anti-union forces are so successful at Wal-Mart, that they have managed to hurt other companies’ unions, whose members are forced to take salary and benefit cuts to keep their companies competitive. Through political donations, astroturf campaigning and outright contempt for the law, Wal-Mart has managed to reshape how the USA views labour and corporate rights.
Lichtenstein also takes us abroad to Europe, South America and Canada; but most importantly, Lichtenstein shows us Guangdong. If Bentonville is the brains of Wal-Mart, Guangdong is its soul (bad news for Wal-Mart’s final judgment). It is here in southern China that Wal-Mart performs its most important squeeze. In the worst-case scenarios, underage employees working in unsafe conditions crank out Wal-Mart’s monstrous orders for pennies an hour. Ordering frequently, in mass quantity, and in a country with few enforced labour laws, Mr. Sam is able to bring the lowest prices to the consumer in their neighbourhood Wal-Mart.
One minor criticism of the book stands out for me. Lichtenstein does not spend nearly enough time discussing the implications of ‘Everyday Low Prices’ for the consumer. He points out that Wal-Mart considers its mere existence to be an example of corporate charity because it offers such low prices to average Americans and admits that, indeed, shopping at Wal-Mart can save families a significant amount of money. In fairness to him, he elegantly counters both of these points and spends time on the customer in parts of most chapters, but I still wish Lichtenstein had endeavoured to write one entire chapter solely on the Wal-Mart customer.
Lichtenstein has nonetheless written an intriguing exposé of one of the largest and most important corporations in existence today. As he proves, there is much more to this corporation than the daily trip to the local store. Wal-Mart’s actions have a wide-ranging effect on the USA and the world. Lichtenstein concludes by predicting Wal-Mart’s growth will eventually be stymied under the weight of its own efficiency. But as we see in the small Texas town that he describes when a Wal-Mart goes under, it puts the whole town out of business for a second time. What implications would this have on a global scale? Lichtenstein can provide no firm answer to this question at the moment. We will just have to wait for the sequel.