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  • 01.19.06

The Wal-Mart Effect

Fast Company senior writer Charles Fishman‘s new book The Wal-Mart Effect — which FC recently excerpted — could very well be the most important book about the most important company in the world.

Fast Company senior writer Charles Fishman‘s new book The Wal-Mart Effect — which FC recently excerpted — could very well be the most important book about the most important company in the world.

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Wal-Mart sells salmon fillets at $4.84 a pound nationwide at its Supercenter fish counters. How can it sell what was once a luxury item at $2 or $3 less than other grocers already low price? Would we purchase and grill up that salmon so happily if we could watch a video of how it was raised and handled before we bought it?

Do consumer product makers really close U.S. factories and open Chinese ones to reduce prices, because of demands from Wal-Mart — or is that a kind of economic urban legend?

What’s the typical workday like, not at a Wal-Mart store, but for the 10,000 people who work at Wal-Mart’s headquarters in Bentonville, Arkansas, a place surrounded by a wall of silence?

Wal-Mart isn’t just the largest store in America, or the largest store in the world, or the largest employer in the world. Wal-Mart is the largest company in the history of the world — and one of the most powerful. It is also one of the most secretive.

In the book, Fishman cracks open Wal-Mart in a way no journalist or insider ever has before, and answers a pair of related questions: What is Wal-Mart doing for America? What is Wal-Mart doing to America?

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Wal-Mart is now so large, it has created its own business ecosystem, where Wal-Mart alone sets the tempo, the rules, the economic climate. That ecosystem, Fishman explains, literally allows Wal-Mart to stand outside the very market forces which we rely on to modulate and regulate all companies. Wal-Mart is so dominant, it can reshape even the rules of market capitalism.

Without ever resorting to “unnamed sources,” The Wal-Mart Effect uses the stories of real Wal-Mart suppliers, real Wal-Mart executives, and real Wal-Mart shoppers to explain how Wal-Mart delivers “every day low prices.” The book shows in fascinating detail what the impact of that unrelenting drive for cheapness has been across the U.S. economy and the around the world, as the Wal-Mart ecosystem gets extended.

In the end, The Wal-Mart Effect marshalls its reporting to make two vitally important points that cut to the heart of business and society:

  • The conversation about Wal-Mart in America is stuck. It’s a shouting match, Wal-Mart is good! Wal-Mart is bad! The Wal-Mart Effect aims to push the conversation forward. Wal-Mart is both good and bad. The question is how to preserve the good Wal-Mart does, while reducing the harm.
  • Wal-Mart isn’t just another company. Wal-Mart is a whole new kind of economic actor. As was the case 100 years ago with U.S. Steel and Standard Oil, we need to take a step back and assess what kind of impact mega-corporations are having on our economy, our democracy, our culture, and our own perceptions — and hold those mega-corporations accountable. Wal-Mart has outgrown the rules. The Wal-Mart Effect argues that its time to change those rules.

See if you agree.