The continuing persecution of Walmart — VOICES for REASON

In recent lectures on the incessant pressure group warfare over land rights in America, I’ve highlighted the legal hurdles that Walmart faces everywhere it tries to expand. Walmart’s low prices and non-unionized workforce pose big competitive challenges to high-price mom and pop stores as well as labor unions. Our legal system encourages such groups, as well as nearby landowners, to exert pressure on state regulators and courts to deny Walmart the zoning and development permits it needs to expand.

As far as I knew, however, other large chain stores typically refrained from trying to block Walmart’s expansion through local political pressure. Boy, was I wrong. According to this article in The Wall Street Journal, Walmart’s competitors are sometimes hiring outside consultants adept at “black arts” to block new Walmart projects, while disguising the true opponents’ identities.

In Mundelein, Illinois, near Chicago, a grocery store chain called Jewel-Osco became alarmed when a developer announced plans for a shopping center anchored by a 200,000-square-foot Walmart supercenter with a full grocery store inside. (Walmart is now the nation’s largest purveyor of groceries.) Jewel-Osco turned to the ironically named Saint Consulting Group for help. Saint appointed a project manager who, per company policy, adopted an assumed name. This manager then contacted landowners near the Walmart site and complained—falsely—about how construction of a Walmart had driven down the price of his parents’ home and ruined their planned retirement. Suitably riled up, neighbors climbed on the anti-Walmart bandwagon.

Using Jewel-Osco money, Saint’s project manager then hired a local attorney (at a cost of $20,000 to $55,000 monthly) to file suit on behalf of local property owners. Two and a half years later, a judge finally approved the project—but even that decision is now on appeal, and the project in limbo. The developer? He’s $3 million poorer. That was the cost of legal fees, expert testimony, and other expenses related to defending the suit.

Giant Foods, another grocery chain burdened by union wages and work rules, used Saint’s skills in a similar Walmart-blocking effort in North Cornwall, Pennsylvania, starting in 2005. But after sponsoring a lawsuit that delayed the project, Giant changed its mind and determined to build a new store of its own right across from the new Walmart. That meant telling Saint to switch sides and promote the commercial zoning instead of opposing it!

Is this the best American law can do—pit productive enterprises against each other in contests of political pull and courtroom strategy? I say no. The principle of property rights, if correctly applied, would take government coercion out of the game entirely (except in cases of nuisance, fraud, breach of contract, and the like). Property owners would be free, as a matter of right, to allow a Walmart (or a Giant or a Jewel-Osco) to be built on their land—but they would have no right to use government force against others in the local economy. So, for example, small shops could keep customers by offering friendlier service and more convenience—labor unions could stay strong by offering workers with superior skills and attitudes—landowners could preserve residential neighborhoods by voluntary covenants.

As for the new stores, the success or failure of each would depend on convincing individual consumers to patronize one or the other—and the outcome would be decided by persuasion, not by modern-day force of arms: fines, penalties, and the threat of jail.

Image: Wikimedia Commons