Wal-Mart is cancelling its plans for retail stores in India, a setback triggered by the Indian government’s regulatory morass that discourages foreign investment and unfortunately harms India's poorest people.
The retailer giant once aspired to become India’s top retailer by 2015, a goal that became untenable as it became clear that Byzantine rules governing foreign ownership and management of stores were needlessly burdensome and uneconomical.
The sad irony is that even while the Indian government is choking out free enterprise on one hand it’s also massively expanding its welfare state by doling out “free” food to 800 million people. This so-called National Food Security Bill does nothing to protect India’s long-term economic security and creates an unhealthy co-dependency on the state.
It's no wonder then that the International Monetary Fund is now projecting that India's growth--once an inspirational success story--will be slower than sub-Saharan Africa.
Wal-Mart is far more than an abstraction for me. As one of eight children in a family with limited money growing up in the United States, my creative mother worked hard to stretch our budget. Thrift stores were goldmines for treasure hunting the best used couches and bunk beds. Perhaps the biggest economic godsend for us was Wal-Mart and its retail warehouse, Sam’s Club. These stores boosted our quality of life tremendously, giving us cheaper alternatives for food, clothes, housewares—basically everything, including the kitchen sink!
My anecdotal experience is confirmed by economists with Massachusetts Institute of Technology and the U.S. Department of Agriculture, who found that Wal-Mart confers “substantial,” benefit to consumers, particularly the poorest segment of the population. But the Arkansas-based behemoth has become the boogeyman of the left, a piñata for various documentaries and left-wing protests complaining about Wal-Mart’s anti-union positions, low wages and its aggressively low prices.
This column isn’t the place to dissect the technical and economic outcomes of recycling, but recycling campaigns introduce a fair analogy about how Wal-Mart and other businesses could fight back. Liberals won a huge victory for the environmental movement during the 1990s through aggressive marketing and public pressure. The result: recycling bins became ubiquitous. Environmentalists won this victory in part by telling Joe Six Pack he needs to recycle because we are one inter-connected Web of life and he must do his part to protect it. This brilliant marketing worked—it tugged at the heartstrings of Americans, who wanted to do their part to save our global ecosystem.
Our global economic system is as delicate as our ecosystem—if not more so since it can hinge on intangible reputations. So why can’t conservatives explain to Joe Six Pack that every economic policy change creates consequences that ripple onward to everyone, including the poor? That every election contributes to making or breaking a nation’s economic future. That states enacting pro-business laws attract new investment and new jobs. That developing countries rejecting free enterprises like Wal-Mart are only hurting themselves in the end.
