Wal-Mart and Katrina

With all the self-righteous criticism of Wal-Mart among the elitist snobs in the media, I guess it’s no surprise that I’ve not heard of this before.

According to a recent report, in the aftermath of the Katrina disaster, the retail giant put the federal government to shame in providing essential goods and services to the people who needed them.

Knowing that the area was about to get hit with a disaster of unimaginable scope, the Wal-Mart CEO gave his managers almost unlimited authority to do whatever it took to help the people of their communities. As a result, while federal officials were hamstrung by skeins of bureaucratic red tape, Wal-Mart employees acting well above their pay grade made instant decisions to circumvent the idiocy and do the right thing, like driving a forklift through a warehouse door to get bottled water for a nursing home. According to one local official who was fed up with FEMA’s Keystone Cops response, “If [the U.S.] government would have responded like Wal-Mart has responded, we wouldn’t be in this crisis.”

In summary:

It is really nothing more than a terminological error to label governments “public” and corporations “private” when it is the latter that often have the strongest incentives to respond to social needs. A company that alienates a community will soon be forced to retreat from it, but the government is always there. Companies must, to survive, create economic value one way or another; government employees can increase their budgets and their personal power by destroying or wasting wealth, and most may do little else. Companies have price signals to guide their productive efforts; governments obfuscate those signals.

In other words, all other things being equal, it is the free market, not government fiat, that best serves the public good. We need to remember that in this election season, as we are treated to an endless parade of promises from politicians about all the good things the government will do for us if only they are elected.

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