Inside the Leviathan

Wal-Mart: Template for 21st Century Capitalism?

edited by Nelson Lichtenstein
Papers presented at a conference on Wal-Mart held at the University of California, Santa Barbara, April 12, 2004.
New Press, forthcoming in 2005

US Productivity Growth, 1995–2000, Section VI: Retail Trade

a report by the McKinsey Global Institute
October 2001, at

Betty Dukes, Patricia Surgeson, Cleo Page et al., Plaintiff, vs. Wal-Mart Stores Inc., Defendant: Declarations in Support of Plaintiffs

United States District Court, Northern District of California, at

Everyday Low Wages: The Hidden Price We All Pay for Wal-Mart

a report by the Democratic Staff of the House Committee on Education and the Workforce
February 16, 2004, at


Throughout the recent history of American capitalism there has always been one giant corporation whose size dwarfs that of all others, and whose power conveys to the world the strength and confidence of American capitalism itself. At mid-century General Motors was the undisputed occupant of this corporate throne. But from the late 1970s onward GM shrank in the face of superior Japanese competition and from having outsourced the manufacture of many car components to independent suppliers. By the millennium GM was struggling to maintain its lead over Ford, its longstanding rival.

With the technology boom of the 1990s, the business press began writing about Microsoft as if it were GM’s rightful heir as the dominant American corporation. But despite its worldwide monopoly as the provider of software for personal computers, Microsoft has lacked the essential qualification of size. In Fortune’s 2004 listings of the largest US corporations, Microsoft ranks a mere forty-sixth, behind such falling stars as AT&T and J.C. Penney. However, Fortune’s 2004 rankings also reveal the clear successor to GM, Wal-Mart. In 2003 Wal-Mart was also Fortune’s “most admired company.”1

Wal-Mart is an improbable candidate for corporate gorilla because it belongs to a sector, retail, that has never before produced America’s most powerful companies. But Wal-Mart has grown into a business whose dominance of the corporate world rivals GM’s in its heyday. With 1.4 million employees worldwide, Wal-Mart’s workforce is now larger than that of GM, Ford, GE, and IBM combined. At $258 billion in 2003, Wal-Mart’s annual revenues are 2 percent of US GDP, and eight times the size of Microsoft’s. In fact, when ranked by its revenues, Wal-Mart is the world’s largest corporation.

One sign of its rising status is an academic conference devoted entirely to the subject of Wal-Mart that was held last April at the University of California, Santa Barbara. The range of subjects covered in the conference papers to be published early next year testifies to Wal-Mart’s impact both on the transfer of goods from third-world sweatshops to suburban shopping malls in the US and on local communities where its stores are located. At the conference the many class-action lawsuits against Wal-Mart’s employment practices were discussed, particularly its unfair treatment of women, whether by paying them extremely low wages or denying them promotions. The conference organizer, the labor historian Nelson Lichtenstein, asked Wal-Mart to send a representative, but Wal-Mart declined.

Within the corporate world Wal-Mart’s preeminence is not simply a matter of size. In its analysis of the growth of US productivity, or output per worker, between 1995 and 2000—the years of the “new economy” and the high-tech bubble on Wall Street—the McKinsey Global Institute has found that just over half that growth took place in two sectors, retail and wholesale, where, directly or indirectly, Wal-Mart “caused the bulk of the productivity acceleration through ongoing managerial innovation that increased competition intensity and drove the diffusion of best practice.” This is management-speak for Wal-Mart’s aggressive use of information technology and its skill in…

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