Wal-Mart, the Invisible Hand, and Moral Ambiguity

Brian has just posted something entitled "Moral Ambiguity and Economics" in which he castigates, if that's not too strong a word, the conservative right for its convenient rhetoric of free market economics and government abstention from involvement when it comes to money matters as arguably contradicted byt its, well, enthusiasm for government intervention in social matters (e.g., the anti-gay marriage amendment, which, whatever else it is, would be in effect only the second amendment to deny a social freedom, the first being prohibition, and it's equally ill-fated no matter where you come down on the issue). Brian, alluding to the post to which he is responding, writes:

Dignan is right -- it is incumbent upon consumers within a free market economy to effect change by using their power as consumers. We very well could put Wal-Mart out of business, but that requires a group effort, something that many conservatives abhor. There are many churches that have tried to wield economic power this way, and they may have been at least slightly effective, but I think this sort of action still misses the point. Conservatives (especially Christians) refuse to judge economic behavior in the name of the Free Market. Sure, they will, as Dignan does, point out the perhaps Wal-Mart doesn't treat its employees well, but, they'll say, those people can work elsewhere. And, of course, they are right. But, I believe that is beside the point.

It's actually beyond my current time capacity to take up the moral issues, but Brian grants Dignan territory I think he shouldn't. He allows, at least heuristically, that market choice entails consumers affirmatively making a choice, such that where Wal-Mart runs roughshod over a small community's economy, wiping out small businesses like so many anthills, it's at least partially a consequence of consumers choosing the lowest priced items without regard to the cost to their community. That's true in a very immediate sense. Similarly, in some general sense it is true that people might choose to work elsewhere.

But these are not premises that hold true indefinitely. If our generation chooses Wal-Mart over smaller merchants, those smaller merchants will cease to exist, and the generations that follow will face a world lacking in the entrereneurial imagination and the fiscal resources to challenge big box retailers from scratch. If it's hard for a private businessman to retain a market sufficient to sustain his business when big-box retailers enter a market now, it will be infinitely more difficult to start a business in fifty years. It's this longview, in my opinion, that's anti-American (in the sense of adverse to free enterprise) and economically short-sighted, and it's this way in which free-market capitalism, as it has been implemented here, fails us. This is largely a consequence of a sea-change in the way antitrust law is now construed; where the abstract concept of innovation once animated antitrust, now the questioned has reduced to one of price competition, such that if there are two big-box retailers fighting for your dollars, it's a situation presumed to be acceptable under antitrust regulation. Of course, this is a reductio, but only marginally so.

Also, while I'm at it, I'll note that the non-interventionist attitude on the right doesn't even hold in the economic sphere: even as they threaten to deny federal subsidies to environmentally friendly rail transport, it's only a matter of time before the feds once again bail out the airlines. And that doesn't even take into account the proliferation of pork and tax breaks and rigged bidding, etc., which are the lifeblood of many major corporations it would be foolish to say flourish solely due to their enterprise and prowess in the free market.

End of sermon.