July 1, 2009

Walmart*

Those who love liberty are pretty reliable to step up and defend Walmart from its many enemies. We'll fight off the back-to-the-cavers who want a 1900 grocery with a pickle jar. We'll fight religious wackos upset that the company sells pants to women.

And in the end, as Adam Smith predicts, we'll be sold out by the firm's rent-seeking. Will they make a case for liberty? No. Jimmy P details Walmart's coming out in favor of government mandate that employers provide health insurance. In short, they can afford it and many competitors cannot. Pethokoukis links to Heritage and CATO:

An employer mandate to provide health insurance would enhance Wal-Mart’s cost advantage. Wal-Mart has 1.4 million U.S. employees, and can negotiate a health insurance contract for them all at once. As a large multi-state employer, they can self-insure and provide coverage under federal ERISA regulations, which exempts them from costly compliance with most state health insurance regulations.

Wal-Mart's small competitors have neither of these advantages. Employers with less than 20 employees often pay more than twice as much per employee for the same coverage, and small employers must comply with sometimes-onerous state regulations.


Now is time for ThreeSourcers to shove back in my face my frequent suggestion that a corporation exists only to maximize value for its shareholders. If Walmart can crush Target as it crushes liberty, I should cheer, right?.

yay.

Philosophy Posted by John Kranz at July 1, 2009 4:08 PM

You hit the nail on the head, but it's not a new concept. In business school (lo these many years ago)we learned about companies using regulations as a competitive weapon - increase barriers to entry for innovative companies and increase the costs of your competitors. We studied it more as an observation than as a "how to," but there's a fine line in that distinction.

Companies are, or at least should be, dispationate objects. Otherwise, the become like GM. However, they are run by people and therein lies the weak link.

Posted by: Boulder Refugee at July 1, 2009 4:34 PM

And yet it hurts to have this company that all but defines capitalism treat it so cavilerly.

Posted by: jk at July 1, 2009 4:45 PM

Was meaning to blog about this myself. This is just the latest case demonstrating the adage, "Government makes criminals of us all." Wal-Mart is put in the unenviable position of having to choose between Bad and Really Bad. Consider this: if it were so advantageous for Wal-Mart to push for mandated employer-provided health insurance, why didn't it before?

Wal-Mart's actions prove that it prefers the status quo. However, now it has to support some sort of health care "reform" BS, in the hopes that it will placate the feds and stall the nationalization movement. So, I'm willing to give Wal-Mart a bit of a break here. It's not to the level of Standard Oil, which lobbied for hefty insurance requirements as artificial barriers to entry for its competitors.

Posted by: Perry Eidelbus at July 2, 2009 12:00 PM | What do you think? [3]