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Jan. 15, 2020

Walmart, Amazon and Israel (EP.196)

Walmart, Amazon and Israel (EP.196)


Not long ago, almost all Americans loved a success story. Hometown boy makes good. Little guy succeeds against all odds. But not so much any more, not so much at all. 

That is the subject of today’s 10-minute episode. 


Has anyone heard of Horatio Alger? Horatio Alger Jr. was an American writer in the 1800s who wrote young adult novels about poor lads and their rise from humble backgrounds to lives of middle-class security and comfort through hard work, determination, courage, and honesty. His writings were characterized by the “rags-to-riches” narrative, which had a formative effect on the United States at the time.

My Dad once told me, after observing a summer of my reading science fiction in early high school, “Truth is stranger than fiction.” as he handed me a copy of a book detailing true first ascent mountain climbs. I remember reading about K2, Annapurna, and, of course, Everest. And my Dad was right. Those stories were more riveting, more astounding, and more full of human courage and determination than anything written by Asimov or Heinlein. 

The same is true in business and commerce. Here are a few examples:

  1. Microsoft. Bill Gates and his friend, Paul Allen, dropped out of college in 1974 to start Microsoft on a shoestring.
  2. Mattel. In 1959, a woman named Ruth Handler noticed that her daughter had more interest in playing with paper dolls that looked like adults, rather than dolls that looked like babies or children. She designed a plastic doll that had mature features, and brought it to the 1959 New York Toy Fair. The Barbie Doll was an instant hit with young girls. Mattel was born. 
  3. Disney. Post WWI, Walt Disney returned from France as part of the Red Cross (turned down by the Army–too young), and convinced a Kansas theater to show his cartoons. Disney was born.
  4. Walmart. After a previous business failure, Sam Walton opened a single store with the vision of generating sales with low prices driven by low profit margins. Today Walmart is the largest US employer, with 2.2M (yes, million) employees.
  5. Amazon. Jeff Bezos started by quitting his job, and starting selling books online in 1994. Today, Amazon employs 750,000 people, and offers wide product selection, reviews and door delivery to many millions around the world. The cover photo in this episode is Jeff Bezo, in his Amazon office in 1994. 

How did it come about that at least three of these companies have engendered intense dislike, bordering on hatred? 

Let’s start with the two companies that have only been met with relatively mild fussing: Mattel and Disney. Mattel is accused of pushing an ideal of femininity that is impossible to achieve. But no one seems to mind that I have no way of meeting the “ideal” as modeled by G.I. Joe. Disney is criticized for having screwed up George Lucas’ Star Wars. And tarting up the original G-rated Disney movies and cartoons.

Microsoft has more severe critics, accusing the computer giant of crushing competition. Gates and Allen started with almost nothing, and sold whatever they could to keep the doors open, starting with their first company, named Traf-O-Data, which sold a rudimentary computer to track and analyze automobile traffic data. They struggled, worked hard, took creative advantages of opportunities open to all, and succeeded wildly. Yet here is a meme representing Microsoft’s critics. 

The most intense criticism–hatred–is reserved for Amazon and Walmart. The critics charge that neither pays its employees enough, and that both crush the little guy. Walmart was the first to be subject to this attack, but only because they succeeded before Amazon even got started. 

Let’s take the accusations in reverse order: Neither Amazon nor Walmart have ever crushed anyone. Not a small business, not a Mom ‘n’ Pop, and nary a bookstore. The people who used to shop in those stores now choose to do business with Amazon or Walmart. They voted against their previous preferences with their time and their dollars. Perhaps it was price or convenience or selection that influenced them. It does not matter. The shoppers, consumers, the people who had to earn their money prior to spending it, were given a choice, and they made it. People no longer buy horses for transportation. The automobile industry did not crush the horse, horse and buggy and buggy whip businesses; something better came along and people made intelligent choices with their time and money.

The response to the pay accusation is only slightly less obvious. Starting pay, often as low as minimum wage, is designed for non-skilled people starting out in life. It is there to get someone started, while living with 3 roommates in a two bedroom apartment. It is not designed to support someone with a family who has not yet acquired skills that will pay enough to meet his responsibilities. 

Now to Israel. Israel is literally a David and Goliath story, the story of the little man righting wrongs in a very positive way, with people cheering enthusiastically for David. Post WWII, post the elimination of European Jewry in the Holocaust, the UN voted to patition Palestine to create the Jewish State of Israel in 1947. They were attacked 3 times by far superior neighboring forces, one of them immediately after partition, with each attack dedicated to Israel’s complete destruction, dedicated to pushing Israel into the Mediterrranean. They not only survived, but they thrived. Without access to oil, Israel, the only democracy in the Middle East, has built a booming economy and a necessarily successful military. In other words, Israel has been a tremendous success. Yet Israel is vilified as being the opposite of what they are. They are accused of being the aggressors, of wanting to punish and eliminate their attackers. Here’s what is true: If Israel’s enemies would put down their weapons, there would be peace; if Israel put down its weapons, there would be no Israel.

Today’s Key Point: What do entities like Amazon, Walmart and Israel have in common? Success. Wild success. And some folks just can’t stand success, more specifically someone else’s success. And at the same time they attack success, they want to tax and otherwise benefit from the very success they can’t seem to abide. In addition to the extreme unfairness of all that, there is the lesson from the story of the golden goose

And is this why so many people and groups, foreign and, sadly and shockingly, domestic, detest, hate, and blame America? Is it because America is almost miraculously successful, the most successful nation in the history of nations; successful militarily, economically, socially? The same America that is the world’s oldest democracy, showing every day the joys and risks of true freedom.

Where do you stand on this subject?


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Will Luden, coming to you from 7,200’ in Colorado Springs.