Home / It Is Time for Wal-Mart to Do the John Galt Thing

It Is Time for Wal-Mart to Do the John Galt Thing

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I recently proposed at the Laissez Faire Books Blog that Wal-Mart shut down all of its operations in Maryland. I explained that they should do this immediately, in protest of a Draconian new state law mandating how much they spend on the health care insurance of their employees.

I instructed Wal-Mart to hold a press conference in order, first, to apologize for its actual sins — for example, occasions on which it has collaborated with local governments to eject property owners from their land on spurious eminent-domain grounds — and, second, to declare that given the right of Wal-Mart officers to bargain freely with Wal-Mart workers, Wal-Mart would not cooperate with the new law. I said Wal-Mart should announce that all operations in Maryland will begin to be phased out starting now, a process to be concluded within two weeks unless the Maryland legislators saw fit to rescind the new law.

There were critics of my proposal, whom I answered in a subsequent post.

One of my critics, a blogger, went so far as to claim at his blog site that because corporations are a “creation of the state” (like, presumably, all organizations that benefit from legal conventions and protections), the government may therefore properly compel its members to do virtually anything when they are acting as part of the corporation – including fork over more dough for employee health insurance. My new arch-enemy suggests that this is so because a corporation, being a confection of the state and hence “not a person,” can possess no rights. It exists at the sufferance of the state and is thus obliged to be the state’s bitch. I may be paraphrasing.

I am not fully satisfied with what I have posted to date at LFB. The more I consider the claims of my new arch-enemy and the assumptions on which they rest, the more I realize how deeply destructive these assumptions must be of the individual rights of all of us if followed to their logical conclusion. In fact, in a society governed by these assumptions, all our rights would be wiped out.

It is, crucially, the various individuals within a corporation who enjoy rights, including any contracted-for rights. This is so even should the law speak of the corporation as a fictional person as a matter of convention. Mr. Enemy wants to dispute this; i.e., he wants to dispute that the participants retain rights as individuals to freedom of action within the contracted terms. But he can’t dispute it unless he relies upon the implicit assumption that an individual and his rights cease to exist whenever the individual enters into a contractual-legal agreement with one or more other individuals. Otherwise, Mr. Enemy would have no trouble agreeing that a State Legislature should not be micro-managing Wal-Mart’s business decisions. At most he would simply be making a not irrelevant but essentially separate argument about the need to repair alleged deficiencies in the laws governing corporations.

If Mr. Enemy’s rights-annihilating assumption were true, its scope would be wider than he seems to realize. It would apply to many more persons than those who participate in corporate enterprises. For it would mean that you and I and all other persons lose our rights as individuals each time we enter into an agreement that generates any kind of persisting organization of persons subject to a rule of law. And what is the most basic such organization but society itself?

Mr. Enemy’s assumptions imply that as soon as individuals in a state of nature become peaceful and deliberative enough to form a society and government, to form any law-governed polity at all, they may then properly be ordered about by the rulers of that regime, and no matter how ostensibly reprehensible the orders may be. That’s Hobbes waving in the distance. Society under a rule of law would then be viewed as a “mere” concoction of the state and of course “not a person”…just as a corporation made possible by contract and rule of law would be viewed as a “mere” concoction of the state and “not a person.”

This much is true: groups of persons are not the same as the individual persons within the group. It’s the individuals who are the individuals.

This ultimate consequence of Mr. Enemy’s perhaps insufficiently attended assumptions may well be what the Ralph Naders and other would-be dictators have in mind: the power to govern a land in which no individual citizen possesses any legally recognized and enduring rights that any ruler need respect. After all, it is harder to social-engineer from on high if the little people down below possess individual rights considered by the law to be sacred and inviolable. (To be clear about my own political-ethical understanding, I should stress that I don’t believe that persons have or could ever possibly have a “right” to health care, or to any other good or service, that exists apart from obligations freely incurred by others, e.g. by parents when they choose to raise children. What we have is the right to the freedom of action we need to make an honest living – which would be one based on voluntary trade with others, not robbery.)

We must thus accept the stunning fact that Mr. Enemy’s argument is not really about limited liability or any other debatable legal feature of corporations. Rather, his view implies that the very act of engaging in organized cooperation under the aegis of law in and of itself constitutes a wholesale relinquishing of one’s rights as a person. One becomes in consequence merely a society-part – just as an officer of a corporation becomes, in consequence of joining the corporation, merely a corporate-part. And though you can quit a corporation, how do you quit society without moving to a desert island? Meanwhile, the necessities of making a living in any more complex way than growing carrots in a garden require that one form and join sundry sub-organizations within a society – such sub-organizations as corporations. The problem is a single problem, the assault on the ability of the individual to act a single assault.

It seems that the desert island is the only solution. Given Mr. Enemy’s assumptions, the only way to remain an individual, to retain one’s personhood, would be to reside in complete isolation from the rest of society, with not one other human being in the vicinity, nor any scrap of law.

And that can’t be right, can it?

David M. Brown is the publisher of The Webzine, a general-interest Internet magazine, and runs the blog for the Laissez Faire Books web site, where he talks about Wal-Mart, annoying laws against being annoying, and other things.

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About David M. Brown

  • Maurice

    “creation of the state”


    I’m not a lawyer but I thought the Corporation model was created so that the phantasmagorical blob of persons involved in commerce could be sued as one entity. To me that means legally the Corporation is viewed as an individual. In this case the rights of the INDIVIDUAL are being eroded in a big way.

    As far as shutting down, I agree but only about 66% of the stores need to be shut down. They just have to get under the number of employees covered by this law which I believe is 3000. If they have the balls to close those stores it will send a powerful message to other states considering the same action.

    Pray to God Laissez Faire can be revived in this country.

  • “phantasmagorical blob of persons… To me that means legally the Corporation is viewed as an individual…”

    No, there is no phantasmagorical blob of persons. There are only persons organized in a certain way and subject to certain legal strictures and rights because of being organized in that way. An organization of any kind is indeed an entity or an individual instance of something, but it’s an individual organization, not an individual person. Nothing about its nature or the adjudication of issues that arise from its existence requires the legal fiction that a corporation is an individual in the sense of being a “person,” a characterization superfluous at best and door-opening for the likes of Mr. Enemy at worst.

    This whole line about how corporations per se constitute a violation of individual rights is bogus, as Hessen argues in one of the linked books, In Defense of the Corporation. Does it make sense for a person to be able to buy a single share in a company without jeopardizing his whole wealth should the company he invests in fall prey to a multi-million-dollar lawsuit? I think it does make sense. But a corporate officer is not able to escape criminal prosecution for criminal acts.

    As for what Wal-Mart should do, no, I think the response should be as thoroughgoing as I suggested, precisely because the victims of such statist insanity need to rebel against it on a much bigger scale than has been done to date. But I develop that point further in my follow-up blog at the Laissez Faire Books site.

  • “In this case the rights of the INDIVIDUAL are being eroded in a big way.”

    Oops. I think I misread this, Maurice, as a reference to the formation of corporations, rather than to the vile assault on Wal-Mart. I realize you’re with me on the wrongness of what’s being done to Wal-Mart even if we disagree about strategy.

  • Here’s an interesting piece by Arnold Kling at Tech Central Station about, among other things, the likely economic consequences of Maryland’s incursion against Wal-Mart if it is allowed to stand.

  • RedTard

    The problem is the legislature would simply change the law to a lower number. Instead of putting an arbitrary number to make it seem like they were being ‘fair’ they should have just called WlMart out directly.

    This is a direct action to attack one corporation by the US government essentially because they refuse to unionize. All these bogus lawsuits that have been in the news lately are being shopped to liberal judges and paid for by union leadership.

    All property rights are under severe attack from the American left. From Kelo, to punishing corps for not unionizing, these scumbags are taking away our rights at every turn. I hope the Iraq war does not turn the populace to where they vote these nuts into office.

  • That’s a very good point, RedTard. If Wal-Mart strategically tweaks in response to some non-essential element of the state legislature’s assault, that’s exactly how the legislators would respond. “We need to counter-tweak the legislation so Wal-Mart can’t squirm out of this.” Instead, it would be much better if Wal-Mart refused to have anything to do with the whole kit and caboodle. For one thing, if Wal-Mart shuts down in Maryland, and states its reasons clearly, legislators in other states would have to re-think any commie inclinations they might have to copy what the Maryland legislature has done.

    One clarification. It’s an attack, in this case, by the Maryland government, not the U.S. government.

  • Nick Jones

    So it’s not okay for Wal-Mart to be the State’s bitch, but it’s okay for 1000x employees to be Wal-Mart’s bitches? I suppose I don’t need to guess that you’re also against employees entering into collective bargaining with employers.

  • “So it’s not okay for Wal-Mart to be the State’s bitch, but it’s okay for 1000x employees to be Wal-Mart’s bitches?”

    Nick, perhaps you could explain what you’re talking about. If I don’t like the terms of employment I have with an employer, I can leave. Presumably Wal-Mart employees receive paychecks, enabling them to pay bills that they could not otherwise have paid. This is bad? Of course, in any office one might be stuck with unpleasant co-workers or supervisors. In that case, one can transfer or quit. Wal-Mart is a big enough company that I’m sure there are plenty of good pockets as well as bad pockets.

    If you want to improve the lot of workers economically, what you do is you peel back the taxes and regulations that make it ever more expensive and cumbersome to add each new worker to the payroll. What I object to in the case of the Maryland legislature’s actions is the use of arbitrary and unwarranted coercion against Wal-Mart, or more specifically, against its officers. I am sure that you are aware, Nick, that Wal-Mart does not use any coercion to force its employees to work. Any employee is free to quit at any time. No employee possesses an inalienable right to a particular job or to a particular job on such terms as are not accepted by his employer.

    In my view, the bargaining rights of the agents on both sides should be respected. So am I in favor of “collective bargaining”? Personally, no, I’m not. I have never benefited from it, and never could benefit from it. I’m the kind of employee who wants his work to be recognized and rewarded on an individual basis. But setting aside my personal distaste for such a tactic, I certainly agree that collective bargaining should be legal, as long as it is voluntary and does not involve any thug tactics against either the employer or employees who are not interested in signing up. But that’s not the kind of bargaining I often read about in the papers.

    Perhaps a trend can be detected in my remarks. I am not in favor of dealing with my fellow human beings by means of force, except in response to force. If a mugger comes at me, I believe I have the right to take him out. But I do not believe I have the right to become a mugger myself, either directly or under cover of “well-intentioned” legislation aimed at destroying the rights of others. I do not pick and choose whose rights I will respect based on whether that person is an employee or an employer, someone I like or someone I dislike. I respect the rights of all others who deal with me peaceably.

  • JohnnyTwoTone

    Honestly, if WalMart treated it’s employees better, or at least gave the impression they would once in a while, this conversation would not be necessary. The fact is that Walmart employees cost you tax dollars because they need to get public health care, being kept below the poverty line and all. It is easy to sit of your high horse and say they can just quit…but if your alternative is McDonalds you maybe don’t have a wealth of job opportunities at your door.

    It is sad to see that we still live in a world where people will stick up for corporations who care more about profits than people, and making it worse is that anyone not directly affected has the ‘you can just quit’ excuse.

  • I agree with you, TwoTone. Any Wal-Mart employee who says that the world owes him a living should be fired immediately. Honestly.

    The notion that Wal-Mart employees are “kept below the poverty line” is a non-starter. What poverty line? The average income in the Dark Ages? In modern-day Bangladesh? Don’t compare the clerks with the billionaires in a society as comparatively rich as the United States and declare that, ohmigod, those who can only earn the salary of a clerk are not earning what the billionaires are earning.

    If you want a wealthier society, you need a free society, which implies a society in which widely varying incomes are possible. You can’t have a prosperous society in which there are no profit-seeking businesses, only charities who give all their income away.

    I contend that a) everyone has the right to exist and to honestly pursue the values that his survival and prosperity requires, including businessmen; and that b) economics is a real existing field of inquiry. You might take up the study of it. Start with Economics in One Lesson by Henry Hazlitt and learn that you can’t erode the institutional bases of prosperity without also eroding the prosperity. It makes no sense to arbitrarily shackle those who create the wealth and jobs that allow those who are not so productive to earn a living, or to belittle the profit motive that drives and guides the production of the goods and services we all need.

    I don’t follow your reasoning when you imply that precisely because Wal-Mart employees “can’t [i.e., don’t] go” elsewhere, they are ipso facto being treated badly–as if the mere fact that Wal-Mart offers a deal which the employee wants to accept is proof of Wal-Mart’s rottenness. By the same reasoning, the fact that the sun is shining is proof of the rain. The socialists claim that all workers are trapped by the their jobs and capitalist bosses. No. What “traps” them is the fact that survival is not automatic, that it requires effort. Don’t blame your employer if you resent the necessity of that effort.

    What I’m hearing are claims based on untutored disdain for Wal-Mart, not any facts about either Wal-Mart in particular or the requirements of doing well as a business in general. I have my own criticisms of Wal-Mart–as I’ve indicated, I hardly think they enjoy a pristine record when it comes to respecting the rights of others. The eminent domain abuse is first on that list of bad things. But giving a person a job that that person wants and needs, and paying him for his work, is not on that list of bad things. How could it be? And what makes you think Wal-Mart or any firm owes you anything beyond what it’s worth to Wal-Mart to compensate you for your services?

    If an employee wants to earn more money for his efforts, he needs a better attitude than world-owes-me-a-lving. He needs to work harder. Smarter. Act as if he must give value to his employer in exchange for the paycheck. Not as if the paycheck, and more besides, is his by right regardless of what kind of effort is given in return.

  • Bliffle

    John Galt? Are you suggesting that there are still some enfants uninstitutionalized who believe that treacle? Didn’t they get the telegram on Ayn Rands proclivities?

  • Piffle. Do you have an argument, an objection, or an intelligible thought of any kind to offer on the issue at hand, Bliffle?

    Of course not. Otherwise we would have heard it. Hence the expectorant allusion to controversies irrelevant to that issue.

  • Tell ya there Mr Brown, I was a little torn on the literary thrust here. It looked like we was getting ready to play pirates in the street, with this new Enemy guy. I could play Ellsworth Toohey sometimes. I also dress up as the devil for Halloween sometimes. My nephew calls me Uncle Satan.

    But you went more into libertarian monastery theological mode instead, you ended up talking about how many Objectivist philosophers could dance on the head of a pin.

    You’re right, though, and we probably need a little of this. On the other hand, I prefer playing pirate.

    Now I’ma make some pinkos walk the plank. Yee-haw!

  • Forgive us our literary trespasses, as we forgive those who literarily trespass against us.

    I’ll hold off on my decision whether to give you any candy, Bart, until after I have seen you in costume.

  • Now Mr Brown, you start quoting irrational altruistic books like the KJV, and St Ayn’s liable to rise up out of Valhallah and come smite the bejesus out ya. I’m just saying…

  • I reside in an undisclosed location.

  • Dave Nalle

    How on earth does WalMart keep employees ‘below the poverty line’? The poverty line in the US is around $9500. The lowest salary they pay at WalMart is $8.50 an hour – more in many areas. Do the math. That’s $16320 a year – almost DOUBLE the poverty line. In fact, if you take out $1500 for health insurance for a single person it’s STILL substantially over the poverty line. And this is without taking into consideration overtime OR the inevitable salary increases you get if you’re not totally incompetent and stay there for at least 6 months.

    Hell, it’s more than most people I knew were getting paid as a starting salary – adjusted for inflation – with a college degree back when I graduated. It’s like double what I earned and lived on throughout my time in graduate school, and I had to pay tuition out of that money.

    This complaint against WalMart is pure ridiculousness. It is entirely driven by unions which are pissed off because WalMart won’t let them in and have used their lobbying power to bully the retards in the Maryland legislature into passing this law. And I say this having had a cousin in the Maryland legislature and therefore knowing what idiots get elected there.


  • Unions may be the driver in the politics of Wal-Mart bashing in Maryland, but they didn’t invent the mentality they’re exploiting. The commie crowd will use whatever means necessary to extract sympathy, stroke liberal shibboleths, and induce guilt in those susceptible to guilt trips for the crime of living.

    Poor is relative. So the “poor” American Wal-Mart employees have TVs, DVD players, shoes, regular food on the table, subscriptions to Time magazine–it’s a life of wanton luxury, really, compared to the lot of many on this globe. But if something-for-nothing is your creed, you’ll never be sated. There will always be something that the people who make the world go round are keeping for themselves, the bastards

  • Maurice


    I have 2 definitions of the term corporation. Here is one from Webster:

    “…a body formed and authorized by law to act as a single person although constituted by one or more persons…”

    Here is one from legal-dictionary:

    “an organization formed with state governmental approval to act as an artificial person to carry on business (or other activities), which can sue or be sued…”

    As you and the other posters noted a partial pullout would be met with more legislation. Damn!

    I read your link and in my case it involved preaching to the choir. It will be interesting to see what Walmart does to combat this law.

  • Yeah. Of course a corporation is not an “artificial person,” whatever that is, but the enemies of economic liberty sure seem to think it means that corporations are state-created Frankensteins.

    Robert Hessen notes in his Concise Encyclopedia of Economics entry on corporations, which we’ll be reprinting at TheWebzine.com, that “To differentiate it from a partnership, a corporation should be defined as a legal and contractual mechanism for creating and operating a business for profit, using capital from investors that will be managed on their behalf by directors and officers. To lawyers, however, the classic definition is Chief Justice John Marshall’s 1819 remark that ‘a corporation is an artificial being, invisible, intangible, and existing only in contemplation of law.’ But Marshall’s definition is useless because it is a metaphor; it makes a corporation a judicial hallucination….

    “Recent writers who have tried to recast Marshall’s metaphor into a literal definition say that a corporation is an entity (or a fictitious legal person or an artificial legal being) that exists independent of its owners. The entity notion is metaphorical too and violates Occam’s Razor, the scientific principle that explanations should be concise and literal.”

    That a corporation is an entity of some kind is true enough; it’s just not a physical entity or “artificial person.”

    Hessen’s entry on Capitalism is already posted at The Webzine, here. We have permission to reprint the Corporations entry also, so I’ll try to get it posted soon.

  • Right Wing Wacko

    I’m in favor of sweat shops. If the kids don’t like 6 cents an hour they can quit.

  • Yes, there are “sweat shops” overseas at which kids work for a low rate. Low compared to what? What are the alternatives for them and their families? What what happen if the company pulls out and those jobs don’t exist any more? Would it be better if they were to earn less, or nothing, or resort to prostitution?

    Wacko, I think the adjective you want for yourself is “Left Wing.” If smears and glaring misconceptions are all you have in your tool kit, why even bother? If you’ve lost the debate for economic freedom and know that you’ve lost, if you have no case to make for stomping those who create the enterprises that make possible general improvements in standard of living, why not just concede that you’ve lost graciously instead of stewing and sputtering?

    Anyway, let’s all hope and pray that the Wal-Mart people–who live in a country where capitalism has had a chance to develop, instead of being strangled at birth–will one day be able to earn more than 6 cents an hour.

  • Robert Hessen’s excellent article on corporations is now up at TheWebzine.com. “Particular corporations can be mismanaged. They are sometimes too large or too diversified to operate efficiently, too slow to innovate, overloaded with debt, top-heavy with high-salaried executives, or too slow to respond to challenges from domestic or foreign competitors. But this does not invalidate corporations as a class.”

  • Scott Butki

    David, swing by please and check out my piece(s) on Wal-Mart please – I’d like to exchange ideas on this since we have very different viewpoints.

  • Dave Nalle

    As you and the other posters noted a partial pullout would be met with more legislation. Damn!

    Perhaps the Maryland legislature could pass a law requiring WalMart to open MORE stores in Maryland AND pay more too. Then they could pass a law requiring them to divide all of their assets among their employees. Why not. They’re legislators, they have the power.


  • JohnnyTwoTone

    At the end of the day, sitting around quoting garbage and using big words don’t change the fact that WalMart pays the least they possibly can, even though the Walton family are among the 3-4 richest people in the world(one died I think, not sure how many there are now).

    Anyway, great calculations for full time work, have you checked out how many people are actually full time at Wal-mart….didn’t think so.

    Sweat shops….better than child prostitution…now there is a great argument. Do you know a lot of these people’s lives would be changed unbelievably by another .25/hour. maybe they could buy a table to eat their food at, or eat something other than rice. But hey, you just keep getting fatter eating your McDonalds, what the hell does anyone who is not you matter.

  • Dave Nalle

    At the end of the day, sitting around quoting garbage and using big words don’t change the fact that WalMart pays the least they possibly can, even though the Walton family are among the 3-4 richest people in the world(one died I think, not sure how many there are now).

    The least they have to pay would be $5.15 an hour under current law and they start workers at $8.50 and pay an average of over $10 per hour. So they hardly pay the ‘least they possibly can’. That’s just a load of bull.

    Anyway, great calculations for full time work, have you checked out how many people are actually full time at Wal-mart….didn’t think so.

    I’m fully aware they have a lot of part time employees. Part time work is what it is. Most of those workers are also homemakers or students or have a second job. No one is forcing them to work part time. WalMart certainly doesn’t have any reason to hire parttimers instead of fulltimers since they don’t give either group insurance benefits.


  • “At the end of the day, sitting around quoting garbage and using big words don’t change the fact that WalMart pays the least they possibly can…”

    At the beginning, middle and end of the day, decrying the fact that persons pursue their economic self-interest does not render that pursuit evil. The issue is how they pursue wealth. Mugging people you want to take stuff from is evil. Peaceful trade is not. If it were not for selfish economic pursuits, we’d still all be back in the caves. TwoTone has no answer, so he resorts to sarcasm and venom. But sarcasm and venom are not a substitute for economic and moral knowledge, nor for moral virtue.

    Mr. TwoTone, of course, always pays more than he has to for everything. With the single exception of my own work, of course. I haven’t seen a dime from him yet, though clearly he’s a fan.

  • lumpy

    sarcasm, venom and don’t forget attrocious grammar.

  • Baronius

    David, I agree with your argument. But as a practical point, have you ever been to Walmart? The employees exhibit that inefficiency and overt contempt for the customer which are the trademarks of low-wage employees. I wonder if Walmart wouldn’t be better off paying its people better, and cutting its workforce by 10%.

  • Maurice

    Dave Nalle #25

    Funny as hell!

    ….wait, it’s too true to be funny!


  • Bliffle

    Corporations have had their ups and downs over the years. A hundred years ago they routinely screwed minority shareholders and crushed competition with monopolies, to the extent that government regulation was required to avoid a real socialist revolution in the USA. Fifty years ago their reps were enhanced as corps became the hope of middleclass wageearners who saw them as communal providers of healthcare and steady employment. But the ascendancy of the corp pirates and other scoundrels who are draining the Blue Sky value from corps has demonstrated that the simple-minded idea of ‘market forces’ simply doesn’t inhibit bad behaviour: it’s good business to bribe officials and cheat shareholders becuase the fines are so (relatively) small that there is a very high ROI.

    Plus, the more imaginative among us have discovered simple ways to manipulate corporate privilege to assure that we Socialize The Risk And Privatize The Profit. For example, it is quite common now for large operating corps to be owned by a holding company that siphons off profits every year and leaves themselves free of liability, thus ending the idea of Retained Profits for future growth.

    It is not only large corps that can perform these manipulations. Even a small capitalist can construct a series of financial redoubts to insulate himself from the vagaries of markets and other externalities, while retaining whatever profits are made.

  • And don’t forget incorporating your company in the Grand Caymans and thereby avoiding US taxes.