Wal-Mart: sinner or saint?

Sam Walton's empire has been in the news lately and frequently for various and paradoxical reasons. They've been on the ropes for probably several years now over the treatment of their employees (which spawned their massive PR campaign-- notice what all of their commercials are talking about?). Allegations of low compensation and an "iron fist" approach to those suspected of unionizing has dogged Wal-Mart and Sam's Club's reputations in the market for some time. For those of you who are interested, WalMart Watch and American Rights at Work has the details on Wal-Mart's seedy underbelly. This, for instance, from the latter: "When Wal-Mart employees attempt to stand up for themselves and try to form a union, they face threats, propaganda, discrimination, intimidation, and even firings."

Yet, at the same time, we have this from the Washington Post:

Over the next few days, Wal-Mart's response to Katrina -- an unrivaled $20 million in cash donations, 1,500 truckloads of free merchandise, food for 100,000 meals and the promise of a job for every one of its displaced workers -- has turned the chain into an unexpected lifeline for much of the Southeast and earned it near-universal praise at a time when the company is struggling to burnish its image.

While state and federal officials have come under harsh criticism for their handling of the storm's aftermath, Wal-Mart is being held up as a model for logistical efficiency and nimble disaster planning, which have allowed it to quickly deliver staples such as water, fuel and toilet paper to thousands of evacuees.

So the question: is Wal-Mart good or bad? Angel or demon? Jedi Master or Sith Lord?

Here's my take: This may sound cynical at first (and maybe it is), but Wal-Mart is a corporation, like any other. A private enterprise. And private companies have one goal, and only one: to make a profit. Thus, when companies do evil, like denying their workers fair pay or rights, it's not because their evil, but rather because it inhibits their ability to achieve the highest possible profit margin. Similarly with good acts: a company like Wal-Mart doesn't spend millions on philanthropy out of the goodness of its heart. It does so to enhance its reputation so more people will go and spend money in its stores. This is not to say that CEOs and boardroom execs are somehow disingenuous in their philanthropic enterprises; I'm sure that H. Lee Scott sincerely enjoys the opportunity to mobilize his company's resources for the public good. But at the end of the day, he wouldn't do it if it didn't provide fiscal advantages (as the cases of his company's "sins" illustrate). After all, one could say the same thing about individuals: there are exceedingly few, if any, acts that are truly altruistic.

I think this carries an important lesson both for those who consider "big whathaveyou" to be intrinsically evil, and those who believe that "the free market" is intrinsically good. Private enterprises are capable of both tremendous good and unspeakable evil, just like human beings. There is nothing "anti-capitalistic" or "anti-business" about using your power as a consumer and citizen to make them stop doing evil, and encouraging them when they do good. At the same time, to be "anti-big business" to the point of wishing their demise is similarly simplistic.

There is also a lesson here for the government. Surely the federal government has vastly more resources than Wal-Mart, right? Then why was Wal-Mart's performance so much better?

Easy: patronage. The government (especially the administration), as we all know, put the wrong people in charge of FEMA for the purposes of political patronage. Thus, the government has people with backgrounds in PR, for instance, in positions that should be filled by specialists in emergency services. Wal-Mart does not do this; it has specialists filling positions requiring specialists, and PR people filling positions requiring PR people. That's how you run an effective organization.