The Glittering Eye, has unquestionably been on the leading edge of this contaminated pet food business, for some time. The Eye reaches in, and comes up with another comment on it, today:
Most people are not aware of the massive effect that the world’s largest company has on the American food supply. As noted by Charles Fishman in his book “The Wal-Mart Effect,” Wal-Mart is China’s eighth-largest trading partner. In 2004, almost 10 percent of everything imported to the United States from China was imported by Wal-Mart. With the way Wal-Mart pushes its suppliers to do business at the lowest possible cost, systems are poorly regulated and done on the cheap.
Clearly, Wal-Mart’s taking the lead in this matter would simultaneously be good corporate citizenship and good business—when all is said and done Wal-Mart will probably have been noticeably injured by the pet food recall. But there is an old fable about geese and golden eggs and China certainly is that for Wal-Mart.
Personally am getting a little tired of Wal-Mart being painted the villain, every time the name comes up. And frankly, that’s precisely what’s going on here; Wal-Mart yet again is being painted the villain in the matter, for not doing anything. Unfortunately there’s no evidence to support that thesis either way. Thus the reaction is more of knee jerk than of actual thought.
Applying free market principles however we see another possibility; Given the amount of dollars that rides on this, I can’t imagine that Wal-mart execs are not already putting pressure on China, if only to cover their own future liability, by, for example, buying from other sources within China, for example… sources untainted by the recent problems, you should pardon the pun.
You see, sometimes, the overt pressure is the less effective, than are the goings on you CAN’T see. The Invisible Hand, ya know.
..every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.
Yes, I know very well that he is referring in part to local production, here. But the world is getting smaller over the last few hundred years. Therefore “local” is less important than it used to be. Still, the principle holds, in the overall; Wal-Mart’s self-interest, here is also the interests of the public at large. Therefore, I dismiss as highly unlikely, the concept that Wal-Mart isn’t already taking action; Action that we can’t see at our level.
Tags: BitsBlog, Economics, International affairs
