Low Prices Uber Alles?

Quote of the day:
“Ask not what you can do for your country, ask what’s for lunch.”
--Orson Welles

Quote of the day no. 2:
“Winter is only a verb if you’re rich.”
--D. Robert Lennon

Two news items about Wal-Mart this week: they reported lower-than-expected earnings and said the holiday season will not be stellar; and the San Diego City Council has outlawed super-centers which also sell groceries, an action which bars Wal-Mart from opening any new stores within the city limits.

There are many factors at play here. Wal-Mart has been lambasted for years for the effect its store openings have had on local businesses. Yet when they open, people flock to them and keep coming back. They have been criticized for their hiring practices, and their pay and treatment of employees. Yet when they open there are many applicants for each available position.

It seems like the bottom line is that people need jobs, and people either need or must have low prices. It is common to hear someone complain about the store and yet regularly shop there.

The main issue for San Diego had to do with development--to what extent are more stores this size good for the city in terms of land use, congestion and appearance. The decision fits with the long-term history of the city--it is a bit difficult to build here. I think the city looks north to Los Angeles as an example of how not to develop.

The recent death of economist Milton Friedman has stimulated discussions about the value and pitfalls of free markets. In an ideal world, all businesses, on their own, would operate always in the long-term best interest of their communities (and themselves, ultimately). Unfortunately, this is not what happens. The drive to move dollars to the short-term bottom line invariably trumps interest in long-term anything.

It’s tempting to think of the possibility of a completely free and unfettered system--pure capitalism, if you will. But I think it’s appropriate for government to limit or regulate any business when there is significant doubt that it will operate in the broader, long-term public good.