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Nelson Lichtenstein, ed., Wal-Mart: The Face of 21st Century Capitalism.

Nelson Lichtenstein, ed., Wal-Mart: The Face of 21st Century Capitalism (New York: New Press 2006)

THIS BOOK IS THE outcome of a conference convened in anticipation of the entry of Wal-Mart "Supercenters" into the southern California market. There is reason to be wary of collections based on conference proceedings--hastily written papers cobbled together under a loosely-defined theme--but this book is a clear exception. It encompasses twelve polished papers organized around a central and salient question: does Wal-Mart represent the "template" for the 21st century capitalist firm?

In his introduction, Nelson Lichtenstein makes the case that Wal-Mart, just like General Motors before it, constitutes a new model of the capitalist firm. Re quantitative dimensions are staggering: annual sales of over $300 billion, 5,000 stores, and 1.5 million employees worldwide. It imports more goods from China than the United Kingdom and is the largest private sector employer in Canada, Mexico, and the us. Qualitatively, its impact can be found in its labour policies, its application of information technology to centralize control over inventories and global supply chains, its reorganization of the urban landscape, and its redefinition of the culture of consumerism. Subsequent papers take up various aspects of this argument and, to the volume's credit, offer differing views on Wal-Mart's uniqueness.

Susan Strasser emphasizes the historical continuity from earlier retailers to Wal-Mart. Chain stores like Sears, Woolworth's, and A&P lured households away from shopkeepers down the street on much the same business model (fixed prices, rapid turnover, and low overhead) and also made use of new technologies (such as modern accounting methods) to alter the system of distribution. Not surprisingly, then, opposition to early mass merchandisers, based on their poor working conditions, the concentration of wealth that mass marketers represented, and the need to sustain local economies, carried many of the same criticisms as opposition to Wal-Mart does today.

In contrast, James Hoopes argues that Wal-Mart's use of information technology has enabled it to achieve a size previously unthinkable in the retail sector. Its extensive satellite and computer network links managers and executives across the world, allows instant access to information on inventories, sales trends, and overall operations. Moreover, its superior inventory information system has made it efficient for some suppliers to cede control over their own production levels to Wal-Mart, reversing the traditional power relationship between retailers and suppliers. Edna Bonacich and Khaleelah Hardie describe how Wal-Mart is able to dictate that its suppliers reduce their prices to the point of razor-thin profit margins, in countries such as Bangladesh, where Wal-Mart is the largest destination for exports, such strong-arm tactics have a large impact on economic well-being. In a similar vein, David Karjanen demonstrates how Wal-Mart radically transforms the American communities in which it situates. In locating on the outskirts of urban centres and in by-passing regional suppliers in favour of in-sourcing goods produced worldwide, Wal-Mart often undermines the viability of local banks, suppliers, and wholesalers, as well as the downtown retail core where these firms are traditionally located.

The strength of this book lies not in a singular attempt to argue that Wal-Mart embodies the 21st century business template, but rather in the wealth of information it provides as fodder for debate. In this respect, Bethany Moreton highlights the importance of Wal-Mart's agrarian roots, in the seemingly backward Ozark Mountain region of Arkansas, as ironically contributing to the rise of the world's biggest company. Ozark farm families' need for off-farm labour income was a source of retail labour. To ameliorate the threat to "manhood" that service work represented, Wal-Mart accommodated and reinforced perceived gender roles, by imposing an occupational hierarchy with male managers and female clerks, and even allowing male employees to arm themselves with dummy weapons!

Chris Tilly provides important insight into Wal-Mart's reach outside of the us by examining the reasons for its success in Mexico. Although "Wal-Mex" followed the same formula, Mexico's extreme income inequality may limit its expansion by reducing the size of the middle class to which it caters. Indeed, as income inequality in Mexico has increased over the last decade, shoppers have returned to street markets at the expense of big box retailers. Wal-Mart's failure in Brazil reinforces this point. The lessons for the national economy are also informative. Although "Wal-Mex" provides wages and benefits comparable or superior to its chain competitors, its automated pricing and inventory management have led to a net job loss in the retail sector, while its propensity to import and its market power have stifled domestic entrepreneurship and production. There is a striking similarity between the impact of Wal-Mart in Mexico today and that of chain stores in the us in the early 20th century.

The final four papers of the book consider Wal-Mart's labour policies. Thomas Adams argues that low-mark-up, high-volume discount retailers did not create but perfected the managerial control strategies of the post-Fordist workplace. Aspects of shop floor control include deskilling of work through the use of automation, an "Orwellian atmosphere" of intense and continuous surveillance, and "often brutal and illegal" opposition to trade unionism. Similarly, Ellen Israel Rosen offers a depiction of Wal-Mart's labour policies that appears highly conventional. Technology which has permitted greater inventory control within a store has resulted in greater division of labour, while a general policy of understaffing intensifies the retail work process just as a speed-up in the assembly line does for production workers.

Brad Seligman examines the sharp gender division of labour in light of the Dukes versus Wal-Mart suit currently before the courts. Started on behalf of six women seeking redress for inequities in pay and promotion opportunities, it has become the largest civil rights class action suit ever certified in the United States, potentially extending to over 1.6 million former women employees. It is no small irony that the very centralized control exercised from Bentonville reinforces the argument that differential rates of pay and promotion are, indeed, systematic.

The book ends on a sobering note that underscores the sorry state of the American trade union movement. In light of past failures of traditional union organizing drives, Wade Rathke makes the case for a "Wal-Mart Workers Association" that stops short of seeking union recognition and collective bargaining rights. The argument is as compelling as it is depressing.

One aspect of the Wal-Mart phenomenon not sufficiently addressed in this collection is the broader legal, political, and economic environment that has made Wal-Mart possible. Industries based on "low-wage, high turnover" labour policies are obviously only possible if general labour market conditions and anti-union legislation ensure that a continuous supply of workers is available at low wages. In this regard, several authors touch upon the rise of temporary and part-time work, outsourcing, the increase in undocumented immigrants in the us, and the rise of contingent work, all of which make unionization more difficult if not impossible. A more in-depth discussion of the economic and regulatory environments that have allowed Wal-Mart's labour exploitation to continue, however, would have been informative, especially in light of Lichtenstein's contention that mass retailers are the "driving force of American inequality."

Overall this is an excellent volume, providing background and context to the debate over Wal-Mart's wide-ranging impact. It is essential reading for anyone concerned with the spread of 'big box' retailing in North America and abroad.


University of Winnipeg
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Author:O'Gorman, Melanie
Publication:Labour/Le Travail
Article Type:Book review
Date:Mar 22, 2008
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