Thursday, May 25, 2006

Column on The Bank of Wal-Mart

The Bank of Wal-Mart

Tibor R. Machan

No, there?s no such financial institution, at least not yet. I am simply
giving this name to whatever Wal-Mart will call its bank, should its right
to establish one gain the protection it should in this supposedly free
market society.

When the big chain of low-cost merchandise announced that it wants to
provide banking services in its several discount stores, a bunch of
politicians, with the disgraceful support of some existing banks and
certain non-profit pressure groups, proceeded to assemble whatever
obstacles they could against the effort. An outfit I have only recently
become aware of, Inner City Press/Community on the Move, has been hard at
work to place all the bureaucratic hurdles you can imagine in Wal-Mart?s
way. (See: When one visits
ICP?s web site, what one finds is pages and pages of reports about the red
tape that either has been or has not been successfully injected in
Wal-Mart?s efforts to start its banking services.

The only substantive information, concerned with why anything could be
wrong with Wal-Mart?s efforts outside some tedious regulations, concerns
the usual charges about Wal-Mart?s failure to live up to various political
correct expectations. These include the alleged malpractices of the giant
retailer in its employment practices, a list of law suits filed against
the retailer, and other typical populist, socialist objections to
Wal-Mart?s success in the relatively free market place.

I am no great fan of some of what Wal-Mart does to advance its
business?for example, its willingness to jump into bed with various city
governments in using eminent domain measures so as to lease huge chunks of
land without having to go through regular market processes. If Wal-Mart
did the right thing, it would simply enter the market and make reasonable
offers for the land it wants from those who now own it. Instead, often
Wal-Mart, sadly not unlike Costco and some other giant businesses, wants
governments to confiscate properties and turn around and lease them to it.
And this is now a disgraceful legally available approach by which huge
enterprises can sic government on smaller ones that pay lower taxes and do
not fit in with the city planners? redevelopment objectives.

But as far as The Bank of Wal-Mart is concerned, this issue is beside the
point. It isn?t so much whether Wal-Mart in particular has a right to
enter a line of business and whether its right to do so is respected and
protected?it could easily be Starbucks or McDonald or Longs Drugs. Whoever
wants to enter the banking market must not be kept out. It is just that
kind of open, unobstructed entry that keeps a free market a properly
competitive arena, instead of a protected region that favors only a few
businesses. It is all, really, about individual human rights, something
that ICP supposedly champions!

Wal-Mart and others like it would probably do the banking industry a
world of good, leading to additional measures by established banks to
provide efficient services. To have these established banks join ICP?which
is, to all appearances, some kind of global anti-capitalist
organization?judging by its repeated use of the term ?fair? in its
literature (?fair? often being a euphemism for ?government
regulated?)?demonstrates once again how wrong Karl Marx was to believe
that capitalists work hard to promote capitalism. Quite the contrary?many
so called capitalists are just as willing to turn to government so as to
advance their special or vested interests as are unions, universities, art
groups, and so forth.

Sadly, although in this instance Wal-Mart may turn out to be the victim
of the anti-capitalist mentality that?s so rampant throughout the world,
in other cases Wal-Mart is right in there sharing that mentality. Still,
those who know that capitalism is the best of all political economics
systems?something even the late John Kenneth Galbraith, a perennial
champion of government planned economies, acknowledged near the end of his
life?need to defend even such two faced capitalists as Wal-Mart when their
right to engage in free trade is under assault. The simple fact is, that
no one ought to have the authority to interfere with Wal-Mart or any other
business if it wants to add banking services to whatever else it is
already selling. (And isn?t Sears doing this already and aren?t others,
even Wal-Mart, doing so too, what with eye doctors, fast food restaurants,
pharmacies and the like all under the same roof?)

What needs to be stressed is the importance of unfettered freedom of
trade, regardless of what is being traded so long as it is done
peacefully, without resort to coercion. Some may regard this market
fundamentalism, some ideological thinking, some bourgeois imperialism or
globalization. Never mind all those efforts to besmirch it?we are talking
about the liberty if individuals and their economic companies to do
business with one another. And Wal-Mart?s liberty may not be ignored as we
do so.

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