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Tuesday, December 19, 2017

Walmart Super Centers Are Glorious

The market's secret sauce is neglect — benign neglect, the willingness to trust people and let them alone to see what they can do.

The more squared-away among us have been doing their Christmas shopping for a while. People like me are getting started. It’s fashionable to dislike shopping. Men of course aren’t supposed to enjoy shopping, because shopping is a stereotypically female thing, and we men are weirdly delicate in the face of such threats. But many women say they dislike shopping, too: It’s a hassle, it’s stressful, and taking pleasure in the mere exercise of consumption strikes many as suggestive of shallowness. It’s a fine argument, but I don’t buy it.

Ayn Rand loved architects, or at least the idea of an architect. Sitcom writers did, too. (Ever notice that about every third character on a sitcom is an architect?) That’s because architects and the buildings they put up (if only Rand had known the unglamorous daily reality of a modern architect!) are a kind of shorthand for human ingenuity and ambition.

Spare a thought for the everyday miracle of the Walmart Super Center, which contains within its walls a selection of worldly riches and exotic treasures.

When the alien archeologists land on Earth in some future age, they’ll see the Chrysler Building and Grand Central Terminal and they’ll know that there was once a real civilization here on Earth. (“And the wind shall say: ‘Here were decent Godless people: Their only monument the asphalt road and a thousand lost golf balls.”) They’ll wonder at some of our strange and barbaric practices, but they’ll know we had something going on.

I hope they find a Walmart.

The Electronic Marketplace

I’ve been to the Taj Mahal, Mount Rushmore, and St. Paul Outside the Walls. (“The alabaster columns were a gift from Muhammad Ali,” the priest showing us around said. “The real Muhammad Ali.”) And each lives up to its reputation — none disappoints. But spare a thought for the everyday miracle of the Walmart Super Center, which contains within its walls a selection of worldly riches and exotic treasures that Cleopatra would have blushed to contemplate.

A 60-inch flat-screen television was, until the day before yesterday, a token of wealth. You can buy a good one from Samsung for less than $300, or just a couple of bucks over what a minimum-wage worker earns in a 40-hour week. The best minds of Silicon Valley and the most efficient manufacturers around the world work tirelessly and ceaselessly, producing mind-bending innovations, to put goods on the shelves of a store dedicated to satisfying the demands of ordinary people, many of them relatively low-income.

And not to go all “I, Pencil” on you (again), consider the vast enterprise that supports that process: the global container-shipping network, the bankers and insurers, the companies that produce the energy and raw materials, the logistics experts, the engineers and architects — it is so complex as to be literally incomprehensible, and it is all organized around the whims and desires and interests of ordinary schmucks like us. Not for free, of course.

Jeff Bezos, the man behind Amazon, began his career as a seller of books in the electronic marketplace and has become the world’s wealthiest man and a pretty good candidate for real-life Bond villain by out-Walmarting Walmart. I was looking at a possible Christmas present on Amazon a couple of days ago and the question came up: Would you like this delivered the day after tomorrow? The item was in Japan, and I am in Texas.

The notable thing about the technology economy is that it is a peerless machine for turning intelligence into money. Sure, there are physical inputs for a company such as Apple, and warehouses and forklifts and such for Amazon, but what those companies really do is apply intelligence. Brainpower in, splendid products and services out, and what is most certainly literal tons of money produced for investors, workers, and shareholders. Nobody really planned that, and nobody is in charge.

Even Bill Gates, one of the great tech-business minds of his time, was slow to grasp the economic importance of the Web. In its earliest days, Web commerce was more or less dismissed as a bunch of nerds messing around in their garages, which it was. A great deal of what’s best about the modern world is the result of nerds messing around in their garages: Google, the modern automobile business, rock ’n’ roll. Thank goodness nobody took it seriously enough to try to regulate it, manage it, and direct it — which would only have deformed it.

Instead, it transformed every aspect of commercial life. Walmart may have big stacks of tires and mountains of socks stashed away somewhere in Arkansas, but it is a high-tech business, too, and a great deal of modern inventory management was invented in its back rooms and fluorescent-lit offices.

Nobody in Washington understands what it takes to make an iPhone or a pound of upland cotton.

The Value of Trade

The British Empire spent shocking sums of money maintaining a navy whose principal task was keeping the shipping lanes open to enable world trade — like many island nations, the United Kingdom has always understood the value of trade.

The Romans before them went to extraordinary lengths, expending untold quantities of blood and gold, to ensure that Roman consumers had access to the rich grain producers of Northern Africa. Great feats of engineering such as the Suez and Panama canals were undertaken in the service of enabling and expanding that trade. And we still have to do some of that, of course: The world is a dangerous place, and it’s more dangerous if you have something worth stealing.

But Julius Caesar would have been shocked by how little we really pay to protect a system — and it isn’t really a “system” at all — under which all of the manufacturers and farmers and innovators of the world compete ruthlessly to lay the very best of all that mankind produces at our feet, for our use and enjoyment. All we have to do is to let it happen.

A couple of weeks ago, I was in Iowa, speaking with some farmers. They were by and large very positive about the Trump administration, but they were concerned — and genuinely baffled — by the administration’s stance toward NAFTA, and toward free trade in general. These were corn farmers, and they are very excited by the possibility that Mexico may soon make a move toward expanding the use of ethanol in Mexican gasoline.

They envision a pipeline, not one that brings ethanol from Iowa to Mexico but one that brings great shunting gurgling flows of money from Mexico to Iowa ethanol producers. “Don’t they know how much business we already do in Mexico?” they ask. “Why would they mess that up?”

You can have the same conversation with executives at Apple or Ford worried that Washington is going to throw a big stupid wrench into their global supply chains.

The secret sauce is neglect — benign neglect, the willingness to trust people and let them alone to see what they can do.

Nobody in Washington understands what it takes to make an iPhone or a pound of upland cotton, but they do know how to get in the way, how to hold up one hand and say “No!” while holding out the other hand and saying “Pay!” There are a few necessary conditions for prosperity: peace, property rights, stable and reasonably accountable government, good courts, effective education, etc. Those are necessary but not sufficient.

Benign Neglect

The secret sauce is neglect — benign neglect, the willingness to trust people and let them alone to see what they can do, to let them try new things and fail nine times out of ten, even if trusting people means letting them reach across a border or two and cooperate with the nefarious Canadians or the Indians or the Chinese or the Mexicans.

Years ago, shortly after the fall of the Berlin Wall, some newly liberated East Germans were discussing the changes that had taken place with the end of Communism. What stood out for them? Oranges. Suddenly, they could buy oranges whenever they wanted, because there were oranges in the stores to buy. Previously, they could get oranges only at Christmas. In that sense, it’s always Christmas for us, and it always has been. Whether it always will be is up to us.

Reprinted from National Review.