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Nationalize Walmart

Walmart is the largest private-sector employer in the United States, and it’s an important source of low-cost groceries for consumers around the country. It also pays poverty wages, busts unions, and drives economic inequality. Luckily, there is an economically viable route to solving those ills: bring the megacorporation under public ownership.

Nationalizing Walmart would be a dramatic improvement on the status quo. (Mike Mozart / flickr)

Walmart CEO Doug McMillon made headlines earlier this month for urging Congress to “get a stimulus deal done.” In his comments on CNBC’s Squawk Box, he said that a new round of stimulus was important for the sake of “small and medium-sized businesses.” Larger firms, he said, had been better able to “weather the storm” of the pandemic.

He didn’t mention that Walmart itself has done a whole lot better than just “weathering the storm.” The company’s second-quarter results, published in August, showed that its e-commerce sales had gone up by a whopping 97 percent since the beginning of the pandemic. Already the largest private-sector employer in the United States, Walmart has hired half a million new “associates” this year.

All of this has added $43.2 billion to the already-massive fortune of the Walton family, which owns just under half of the company stock. To put that in perspective, the family was already making more than a combined 43 percent of all Americans before the pandemic.

Nor is this wealth being shared throughout the company. “Associates” who have worked there for twenty years are still making less than $15 an hour. The company has long been a notorious union-buster, surveilling employees, forcing them to sit through anti-union “training” videos, setting up a hotline for managers to report union activity, and even preemptively closing stores to foil unionization efforts. It also drives economic inequality in society as a whole through the “Walmart Effect,” whereby both suppliers and competitors are incentivized to slash their own employees’ wages.

So what’s the solution?

Many progressives would probably like the company to simply go away. It’s not uncommon for attempts to build new Walmart Supercenters to be met by local resistance. While some of these efforts have been funded by rival retailers, much of this resistance comes from sincere concerns ranging from Walmart’s ecological impact to general distaste for corporate homogenization.

But imagine for a moment that a magical genie granted this wish. The actual disappearance of the largest private-sector employer in the country would mean the loss of millions of jobs. Even if other, smaller retailers rehired most of those unemployed “associates,” the transition would be brutal, and wages at these smaller firms would often be even lower. And a vastly larger number of working-class Americans rely on Walmart’s 4,756 US stores for low-cost groceries.

A better solution is to bring Walmart under public ownership.

Nationalized Stores Don’t Need to Mean Empty Shelves

Socialists want to nationalize lots of things. In the last year, I’ve written articles for Jacobin calling for bringing everything from energy companies to sports teams to Ivy League universities under public ownership. But the idea of nationalizing department and grocery stores might give even some critics of capitalism pause.

One of the greatest failures of countries like the Soviet Union during the twentieth century involved what is often called “the calculation problem” — the problem of coordinating production planning with fine-grained consumer preferences in the absence of price signals. As anti-communists love to point out, Soviet citizens were often amazed by trips to American grocery stores.

As Jacobin editor Seth Ackerman has put it, “the radical left is prone to slip into a posture of denying this sort of thing is politically relevant at all.” That’s a serious mistake. As Ackerman chronicles, the “citizens of Communist countries experienced the paucity, shoddiness and uniformity of their goods not merely as inconveniences” but as “violations of their basic rights.”

Given all of this, even some readers generally sympathetic to socialist ideas might be hesitant about nationalizing a retailer like Walmart. Do we really want to re-create the kind of grocery stores they had in the Soviet Union?

Contemporary socialists disagree among themselves about what lessons should be drawn from the Soviet experience. Some believe that the problem with its form of economic planning was that it was undemocratic, or emphasize technological advances that already allow giant companies like Walmart to run internal economies that make use of many planning mechanisms. Others think that the kind of socialism it’s most realistic to hope for at this historical juncture would still involve a market sector of competing worker-owned firms.

Whoever is right about this larger debate, though, we have no reason to believe that the à la carte nationalization of a grocery store chain, even one as humongous as Walmart, would lead to similar problems in 2020 America. First, we should remember that shortages at Soviet supermarkets weren’t primarily a product of bad ordering decisions by the managers of the stores themselves but of popular products not being produced in sufficient quantities in the first place. Nationalizing Walmart wouldn’t mean nationalizing all of its suppliers.

Second, private retailers could continue to compete with the nationalized chain. Indeed, if nationalizing Walmart really would somehow lead to Walmart locations being full of empty shelves while its competitors continued to be able to provide the sort of shopping experience that so amazed Boris Yeltsin in Texas in 1989, then every non-Walmart retailer would have every reason to welcome the change.

I suspect, however, that if some future socialist government does bring Walmart under public ownership, this won’t be any sort of windfall for its competitors. Quite likely, a publicly owned version of the chain — Publicmart? Americamart? — would continue to offer fairly cheap groceries while absorbing more short-term losses, and would pay employees a living wage in the process. Just look at the United States Postal Service, which manages to carry postcards from Alaska to Florida for 35 cents while continuing to provide hundreds of thousands of good union jobs around the country.

Or take the issue of the Walmart Effect on suppliers. A socialist government could not only solve the problem but engineer a Reverse Walmart Effect by mandating that Americamart only buy from suppliers that paid their own employees a living wage.

But nationalizing Walmart doesn’t have to be a panacea for it to be a dramatic improvement on the status quo. This is a company that’s been forced, year after year, to pay sums sometimes running to hundreds of millions of dollars to settle class action lawsuits for forcing “associates” to work off the clock, denying them legally required rest and meal breaks, stealing their wages, secretly taking out life insurance policies on them and naming itself as the beneficiary (a practice that’s been nicknamed “dead peasant insurance”), discriminating against pregnant women, and violating basic safety practices.

It’s hard to imagine the public sector doing any worse than that.