Because in a free market, WalMart would not exist. It is not for lack of trying. WalMart entered the Hong Kong market and ran away after two years with its tail between its legs. The freer the market, the less need for a WalMart. WalMart is touted as a free market success story, and I will be the first to admit that where WalMart shows up, the standard of living rises. It has been demonstrated when people save a buck a week times 50 consumer items, they spend the $200 savings on upscale products. Those small companies who go upscale when WalMart comes to town thrive. This is one of the delights of a fascist economy.
Aside from the assists WalMart gets from the social welfare network supporting its employees, and the fact that it can convert private property of others into its own private property by means of compliant city councils abusing the condemnation process, WalMart is an example of survivorship bias in a country where the public policy is "get big or get out." As more and more rules are designed to crush small business, large businesses thrive on economies of scale. Retailers are obliged to test clothes for "lead and phthalates" which WalMart can afford but is a killer to small businesses. These small business killers are in place for every aspect and sector of the USA economy. In an economy which features a big business/big government cooperation, WalMart thrives. Where the economy is in some measure freer, WalMart has a harder time. In the freest economy on earth, Hong Kong, Walmart did not stand a chance.
It is said in USA we talk Jeffersonian but act Hamiltonian. Well, some of us do. And the hamiltonian structures are crashing around us. The solution is the Jeffersonian ethic we once held. We need to roll back the fascist state and resume the path we left ten, twenty, fifty years ago... The irony is Hong Kong and USA were formed by the same people of the same ethic at the same time; Hong Kong stayed true to form, USA has been distorted by the Hamiltonian elements.
In a free market, small business innovates and large businesses lower the cost and widen the access to material benefits and services, a natural social justice network, an example of spontaneous order out of chaos.
In Hong Kong, in the measure it is a free market, you can get low cost anything at anytime, where you need it. Hong Kong also offers high cost innovation as well. The symbiotic relation between the economic conservators and the innovators is alive and well. Hong Kong welcomed WalMart's effort in the territory, but the monster could not thrive where people are free to offer what they want, and where customers live under caveat emptor. That is the natural order.
Thursday, March 4, 2010
Why No WalMart In Hong Kong?
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2 comments:
Hmmm... free market indeed...
That's not exactly true. Walmart left because two of Hong Kong's largest companies control retail. They have divided the market up between themselves and collaborate to crush any competitor. Both Walmart and Carrefour suffered the same fate.
If you don't believe me, try to start up a shop (even a small one) in Hong Kong selling something that PARKnSHOP and Wellcome sell for less than they do. You will discover the market is not as free as you think. These two large companies will lean on suppliers to either increase their prices or stop supplying you. That's some free market...
Walmart also failed because Hong Kong people don't shop like Americans. We shop every day and thus don't want big box stores to which which we have to commute for hours. We want smaller stores within walking distance of our homes.
I am not sure you are disagreeing... All you are saying is in the area where companies compete on price, Hong Kong companies better serve Hong Kong people than either French or USA invaders. Usually WalMart wins, you've only explained why they may have lost.
Now in Hong Kong new businesses that do not compete on price form and grow with regularity, wherein the USA the Walmarts work to crush upstarts.
The market is free where it matters, in innovation.
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