Saturday, November 05, 2005


The current issue of The Freeman includes John Semmens' "Wal-Mart is Good for the Economy". It seems that many people need reminding of the simple fact that, absent force, fraud or significant external costs, profitable enterprises are that way for good reasons -- they serve people best.

But success and progress also have powerful enemies -- even in what lazy observers still refer to the "laissez-faire" U.S.

Are there externalities? Sure. Everywhere. Are they significantly (net) positive or (net) negative? Only the conceivably negative are grist for popular discourse.

"Pecuniary externality" effects on wages or market prices are not a market failure.

Politicians may want to see every government program as a jobs program -- and they may want to see private enterprises in that light too but that is not economics.

Along these lines is the accusation that Wal-Mart's compensation packages push many employees to rely on public health programs. All things considered, employees and employers find each other and agree to terms in light of all of their available options.

Those who fret most about all of this are often the same people who routinely condemn the poorest to go to the worst (government) schools -- and thereby must bear much of the blame when poor people have few good options.