I can highly recommend two books that I finished recently.
Charles Fishman’s The Wal-Mart Effect stands for the moment as the definitive treatment of one of the world’s key economic actors. When I was reading The Wal-Mart Effect, I rather annoyingly interrupted my wife every few pages to share with her some amazing fact. The percentage of P&G’s sales that go to Wal-Mart. The ubiquity of Wal-Marts in the US (I am apparently one of the few Americans never to have stepped inside a Wal-Mart). The severely Spartan ethos of headquarters. And on and on.
What Fishman does so well is to take a behemoth as controversial as Wal-Mart and present what I consider a balanced view. You cannot read Fishman without marveling and admiring Wal-Mart’s logistical and retailing genius. You also cannot read Fishman without being appalled at Wal-Mart’s blindness to the impacts of its decisions. Is Wal-Mart good or bad? Yes, is Fishman’s answer, and he manages the adroit trick of that not seeming a cop-out. I will make that trip to Wal-Mart one day – for sociological reasons – but after reading Fishman I’m certain that I’ll be both amazed and appalled.
My other recent read, The Economic Naturalist, by Robert Frank, does a better job of helping readers understand key economic concepts than The Undercover Economist, which I also enjoyed. Frank’s contention that most people learn best through storytelling is certainly right, and I found his series of everyday questions and answers guided by economic principles both entertaining and instructive. It’s clear that Frank’s book won’t become a bestseller like Freakonomics (it’s currently 516th on Amazon.com, which isn’t shabby, but the revised edition of Freakonomics – two years after the original publication – is 39th), but it’s more deserving than the Levitt and Dubner blockbuster.
I don’t know if this is in the book at all, but I lived in rural America before Wal-Mart came to town. This was the late 1980s, so Sam W was still alive, the “made in America” ethos was still part of their buying, and I am sure that many things were different.
Not to put too fine a point on it, shopping in the Middle Tennessee region where I lived completely sucked before Wal-Mart. And I was a college student with relatively simple needs (and, honestly, wants). It’s hard to imagine what raising a family was like. The other stores on the square had passed their prime decades before. The closest thing to a department store was musty, poorly organized, open seemingly random hours, and anyway didn’t have what you were looking for. There was a Sears outlet about the size of someone’s living room; I think it served as a place to put in catalog orders. I know I never darkened its doors. The things that I would later buy at Wal-Mart, I originally ported 600 miles across the country from the medium-sized city where my parents lived because you simply couldn’t get them at that period without a trip to Nashville or Chattanooga.
Like I said, I’m sure plenty has changed in the intervening years, but without a grasp of what retail was like in small-town America before Wal-Mart, I don’t think it’s possible to know why the company became so successful, or why it still enjoys a significant reservoir of goodwill.
That’s not a point that comes across in the book. What the book does detail, however, is how today’s Wal-Mart is dramatically different in scale to Sam’s Wal-Mart.
When Sam Walton died in 1992 Wal-Mart’s annual revenues were around $44 billion. A big, successful company certainly. But Wal-Mart’s revenues now are around $350 billion. Its annual growth in revenues is not far short of its total revenues at the end of Sam’s reign.
Fair enough; difference in scale does eventually become a difference in kind. And yet, understanding AT&T helps a lot in understanding the Baby Bells, and understanding Rockefeller’s Standard Oil goes a long way to grasping the oil majors. There’s probably lots in earlier Wal-Mart history that would be revealing about why the company is the way it is today.
From the review here and some of the others at Amazon, it looks like Fishman did well on the what; as a reader, I would want to know the why.