Tuesday, August 01, 2006

Wal-Mart Withdraws from Germany

Wal-Mart continues to stir up negative emotions among some observers. In Germany it is to close its 85 stores and withdraw commercial operations from the country.

Withdrawals of foreign retail firms from the Continent are not unusual. Marks and Spencer, hardly a company with a poor record on anything (except, perhaps its rate of profits), withdrew recently from France; other British companies have entered and then left the USA. German labour laws inhibit investment, which inhibits employment. The choice is a political one.

I do not recall massive feelings one way of another about these and other withdrawals, though public resistance to incoming take-overs of German, French, Italian or Spanish firms across all business sectors are common, whether initiated by US or by EU firms in neighbouring countries. This probably accounts for the higher levels of unemployment in these countries.

However, here are two comments from readers of the DW-World.DE (Deutsche Welle) web site. Make of them what you will. I am not too sure that Germans have not heard of Adam Smith; he was a major figure in a German-originated controversy in the late 19th century known as ‘Das Adam Smith Problem’; and I think Mr Mooney makes light of 19th century 'sweat shop' owners:

Two views on ‘Welcoming Wal-Mart's Withdrawal from Germany’

“It's an example of a predatory, profit-at-all-cost operation. Its presence has obliterated the commercial centers of many rural communities. Worse -- the traffic and trash its centers create in rural acres has a profound negative impact on the equity value of the single family homes along the traffic corridor. Its labor practices make the sweat-shop owners of the 19th century look enlightened.” W. Mooney, US

“The German government is cradle to grave socialism. Wal-Mart offered Adam Smith hope and prosperity. The German people would rather have total security. The Germans never heard of Adam Smith.” -- Jim Gray


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