Invisible Hand

Is Wal-Mart a Public Good?

By Matt Singer, 5-17-05

	Photo by Scott Poniewaz/New West Wal-Mart may be raising the public eye with its private status.

Adam Smith, in his note-worthy The Wealth of Nations, defended three areas of intervention into markets: defense, protection of property, and maintenance of "public works" (things that benefit society greatly, but where profit-motives fail to stimulate sufficient capacity). This last category is now known also as public goods or goods with positive externalities. Good examples would be things like schools, highways, and, arguably, wild lands for hiking and fishing. These public goods are widely desired, but individual profit motives would be unlikely to protect them, simply becaue most of the benefits go to society.

All of which raises a good question: Is Wal-Mart a public good? Because as Richard Barr points out today in the Santa Fe New Mexican, taxpayers sure are helping keep it afloat.

Richard Barr, writing for the New Mexican points out that Wal-Mart depends heavily on public assistance for its employees in order to cuts its own prices. Wal-Marts often also seek local tax breaks in order to bring their retail stores and jobs in. Ironically, as their own taxes are cut, older businesses are essentially subsidizing their own destruction by picking up the tab for health care for Wal-Mart's employees.

He points the way to two sites, one local, one national, for people interested in doing more to learn about Wal-Mart or how to support their local communities and workers at the same time:

• Santa Fe Alliance - promoting independent business and community


• PurpleOcean.org - a membership organization of the Service Employees International Union

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