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The Wal-Mart Steamroller Effect

Updated on April 29, 2010

Nobody did more to unsettle rural America than Henry Ford, but that didn't prevent him from pining after the small-town values and traditions he and his automobile disrupted. Late in the 1920s, long after his own cars and factories had made the village life of Ford's boyhood all but obsolete, he spent millions re-creating it in a park on the outside of Detroit, complete with dirt roads, gas street lamps, horse-drawn carriages and a grassy town square. "I am trying in a small way," Ford said, "to help America take a step toward the saner and sweeter idea of life that prevailed in the pre-war days."
 
If there is a Henry Ford of the other half of the 20th century, it is Sam Walton of Bentonville, Arkansas, the creator of Wal-Mart stores. His autobiography, Made in America, published shortly after his death, all but gushes with praise for the small-town values that he says made him a business success and kept his head on straight long after he'd become a billionaire. "We thrive on a lot of the traditions of small-town America," Walton wrote of his mega-billion dollar empire. He says he and his wife kept the corporate headquarters in Bentonville "so we could raise our kids with the same values she and I had been exposed to in our youth."

Walton never had his boyhood home made into a theme park, the way Ford did, but he did install a Wal-Mart museum on the Bentonville town square, in a restored version of the old Five-and-Dime Building where he first opened up for business in 1951. What he wanted, Walton said, "was to capture a little bit of the old dime store feel." That dime store is the 21st century equivalent of the buggies that still trudge up and down the roads of Greenfield Village, Henry Ford's ersatz hometown. It is a relic of the world that Sam Walton both loved and helped to destroy.

There is no reason to doubt the sincerity of Walton's old-fashioned values. He was a genuine Rotarian, Presbyterian deacon and small-town Chamber of Commerce president. But there is also no mistaking the legacy of the Walton era: boarded-up stores and deserted Main Streets in just the sort of towns he cared most about, towns that fell victim to giant Wal-Mart stores that came in and priced their goods so low that the independent merchant never had a chance.

This is a familiar enough story by now; it has been the subject of quite a few newspaper and magazine articles over the past decade. But the issue seems to have stung Sam Walton to the end of his life. "Nobody has more love for the heyday of the small-town retailing era than I do," he protests in his autobiography. "Of all the notions I've heard about Wal-Mart none has ever baffled me more than this idea that we are somehow the enemy of small-town America."

Walton mounts a reasonable enough defense: he didn't kill Main Street, change killed it. If he hadn't dropped Wal-Mart stores all over the landscape, then K-mart or Target or Woolco would have come along and done the same thing. From the point of view of the druggist or hardware dealer forced out of business, it would have amounted to the same thing. "The small stores were just destined to disappear," Walton wrote. "It was as inevitable as the replacement of the buggy by the car."

Sam Walton goes further: Not only was the Wal-Mart phenomenon inevitable, he says, but it has been a good thing for the communities it has hit. There are almost a million Wal-Mart employees, and the full-time ones are eligible for profit sharing. A significant number have become rich by investing in company stock. Most important to Walton, though, his low prices have kept money in the pockets of ordinary rural people like the ones he grew up with. The dimes they save on socks and toothpaste make it that much easier to get through the week on a tight budget. "Millions of people," he argues, "are better off today than they would be if Wal-Mart had not existed."

Fair enough. But one still has to balance those gains against losses of a staggering dimension. It is not just a matter of nostalgia for the days when locally owned stores competed with each other for business across a thriving town square. It is a matter of numbers.

Continued In The Wal-Mart Steamroller Effect Part 2

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