Wal-Mart Never Read Keynes

Wal-Mart, which has worked hard to lower wages around the world, is now getting hoisted by its own petard. The company has been discovering over the last couple of years that its sales depend upon the prosperity of the people to whom it markets.

Hudson, Kris and James Covert. 2007. “Wal-Mart Recovery Dealt a Blow.” Wall Street Journal (15 August): p. A 2.

Chief Executive Lee Scott said that “Wal-Mart’s customers continue to cite “money and finances, the increase in cost of living and gas prices” as top concerns, and that they are clustering their spending around paycheck dates on the 1st and 15th of the month.”


3 comments so far

  1. Jay on

    I find it fascinating that these companies don’t understand that their workers and people like them need to have a decent standard of living so that they can in turn buy the goods from those companies. It’s basic capitalist economics.

    But we need to be careful not to say that it’s a good thing if Wal-Mart were to give higher wages to its workers. After all, that idea was created by Henry Ford as a way to really further oppress his workers.

  2. ChampSummers on

    Isn’t this what Marx predicted?

  3. mperelman on

    Marx gave some comments about aggregate demand, but I don’t think it was at the core of his theory.

    Henry Ford’s higher wage was not really so. Only men who qualify got the “profit sharing,” as Ford called it. No women. Also, they had to have some seniority & be approved by Ford’s Sociological Department, led by the thug Harry Bennett.

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