[Dialogue] Wal-Mart?

[FacilitationFla at aol.com]

October 17, 2006
Shopping for a Nobel 
By _JOHN TIERNEY_ 
(http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/johntierney/index.html?inline=nyt-per&inline=nyt-per) 
 
I don’t want to begrudge the Nobel Peace Prize won last week by the Grameen  
Bank and its founder, Muhammad Yunus. They deserve it. The Grameen Bank has 
done  more than the World Bank to help the poor, and Yunus has done more than 
Jimmy  Carter or Bono or any philanthropist. 
But has he done more good than someone who never got the prize: Sam Walton?  
Has any organization in the world lifted more people out of poverty than  
Wal-Mart? 
The Grameen Bank is both an inspiration and a lesson in limits. Compared with 
 other development programs, it’s remarkable for its large scale. Since it 
was  started three decades ago in Bangladesh, it has expanded to more than 2,000 
 branches. Its micro-loans, typically less than $150, have helped millions of 
 villagers start small businesses, like peddling incense or handicrafts at 
the  local market, or selling milk and eggs.  
The economist William Easterly, who was afraid Bono was going to get this  
year’s Nobel, calls the bank’s prize “a victory for the one-step-at-a-time  
homegrown bottom-up approach” to development. That approach is a welcome  
contrast to the grandiose foreign-aid schemes that do more harm than good, as  
Easterly documents in his book, “The White Man’s Burden.”  
But there’s a limit to how much money villagers can make selling eggs to one  
another — a thatched ceiling, as Michael Strong calls it. Strong, the head of 
 Flow, a nonprofit group promoting entrepreneurship abroad, is a fan of the  
Grameen Bank, but he figures that villagers can lift themselves out of poverty 
 much faster by getting a job in a factory.  
The best way for third world villagers to tap “the vast pipeline of wealth  
from the developed world,” he argued in a recent _TCSDaily.com_ 
(http://tcsdaily.com/)  article, is to sell their  products to the world’s largest retailer, 
Wal-Mart. Strong challenged anyone to  name an organization that is doing more 
to alleviate third world poverty than  Wal-Mart.  
So far he’s gotten a lot of angry responses from Wal-Mart’s critics, but  
nobody has come up with a convincing nomination for a more effective antipoverty 
 organization. And certainly none that saves money for Americans at the same 
time  it’s helping foreigners. 
Making toys or shoes for Wal-Mart in a Chinese or Latin American factory may  
sound like hell to American college students — and some factories should 
treat  their workers much better, as Strong readily concedes. But there are good  
reasons that villagers will move hundreds of miles for a job.  
Most “sweatshop” jobs — even ones paying just $2 per day — provide enough 
to  lift a worker above the poverty level, and often far above it, according to 
a  study of 10 Asian and Latin American countries by Benjamin Powell and 
David  Skarbek. In Honduras, the economists note, the average apparel worker makes 
$13  a day, while nearly half the population makes less than $2 a day. 
In America, the economic debate on Wal-Mart mostly concerns its effect on  
American workers. The best evidence is that, while Wal-Mart’s competition might  
(or might not) depress the wages of some workers, on balance Americans come 
out  well ahead because they save so much money by shopping there.  
Some critics, particularly ones allied with American labor unions, argue that 
 the consumer savings don’t justify the social dislocations caused by Wal-Mart
’s  relentless cost-cutting. They’d rather see Wal-Mart and other retailers 
paying  higher wages to their employees, and selling more products made by 
Americans  instead of foreigners.  
But this argument makes moral sense only if your overriding concern is saving 
 the jobs and protecting the salaries of American workers who are already far 
 better off than most of the planet’s population. If you’re committed to Bono
’s  vision of “making poverty history,” shouldn’t you take a less parochial 
view?  Shouldn’t you be more worried about villagers overseas subsisting on a 
dollar a  day?  
Some of them prefer to keep farming or to run small local businesses, and  
they’re lucky to get loans from the Grameen Bank and its many emulators. But  
other villagers would prefer to make more money by working in a factory. If you  
want to help them, remember the new social justice slogan proposed by Strong: 
 “Act locally, think globally: Shop Wal-Mart.” 

 
Cynthia N.  Vance
Strategics International Inc.
8245 SW 116 Terrace
Miami, Florida,  33156
305-378-1327; fax 305-378-9178
_http://members.aol.com/facilitationfla_ 
(http://members.aol.com/facilitationfla) 

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