Tuesday, June 27, 2006

Wal-Mart Debate in Slate

Slate this week has an interesting "dialogue" (an exchange of published emails) between Barbara Ehrenreich (author of a few books including Bait and Switch: The (Futile) Pursuit of the American Dream) and Jason Furman (an economist) debating the merits of Wal-Mart.

I already posted my views on this topic, and they haven't been changed by reading Ehrenreich's opposing view. I doubt most people who have thought seriously about this issue will find their minds changed by reading the debate (there are four entries so far, two by each writer, with probably more to come).

What is interesting about the debate is how much the two sides (at least as represented by these two) argue past each other. They are really not speaking from the same frame of reference. From my perspective, Ehrenreich is really missing the point and not understanding some basic economic realities. No doubt from her perspective, Furman is missing the point about what is important and what our priorities should be.

Mosch and I argued recently about whether people who support and oppose Wal-Mart do so out of fundamentally different understandings of economics (my position) or because, despite agreeing on the various factors involved, they come to different views on the overall valuation. (I trust Mosch will post a comment if he disagrees that we had a discussion like that, but that was my interpretation, anyway.)

In any case, if you have an opinion on Wal-Mart and really don't know how other people can hold a different one, this article might educate you (probably about how wrong-headed the other side is, that being the nature of opinions, but anyway...)


Mosch said...

I remember no such discussion between Tam and me. This is not to say it didn't happen. Tam's telling of it sounds right as to what each of us might have said. It probably happened just that way. It's just that I have a terrible memory. That allows me to have identical conversations again and again and find them fresh and enjoyable every time.

Tam said...

It started because we were choosing the next book to read together, and I suggested "Economics in One Lesson." We abandoned the plan when Mosch basically dismissed the book's entire opening as being sort of (my interpretation of what he should have said) a straw man argument, because everyone (in Mosch's opinion) who is smart at all actually understands what that book argues already. Wal-Mart came up as an example (raised by me).

Mosch said...

oh, THAT conversation. Yes, I think there are smart economists on the left as well as on the right. And liberal non-economists are as likely to have basic facility with the dreadful discipline as their conservative counterparts.

Mosch said...

Now for more serious:

I find the WalMart debate worth spending time reading on, as a non-economist moderate liberal, because it's current and hot, and also gives me the motivation to read serious economic discussion and analysis. So I read the debate between Ehrenreich and Furman (which now has 5 of 6 parts). I also read the 16-page paper by Furman and the 22-page technical paper by Economic Policy Institute economists Bernstein, Bivens and Dube including the appendices (though I didn't take the time to decipher the math so I could read the charts. That would have taken hours more!).

And I just realized, if I even begin to write what I think as a result, my comment will be longer than any of Tam's blog entries. And I'm already working on a book. Bye.

Tam said...

Just to be clear, I didn't argue what Mosch imputed to me: that there are no smart economists on the left, or that liberal non-economists are less familiar with the dismal science ("dreadful discipline"?) than conservative non-economists.

What I did argue is that liberals who oppose Wal-Mart (which is not, to be clear, all liberals - I am a liberal myself) seem not to understand the basics of economics. IMO, Ehrenreich's side of the Slate argument supports my position. (Her response to Furman's Best Buy example was particularly clueless, IMO.) Perhaps Ehrenreich is not as typical of liberal Wal-Mart opposers as I think she is.

Furman is a liberal too, of course.

sally said...

It is just killing me that I was able to read up through page 3 and then got repeated "sorry.. we're busy.. go away" messages from Slate.

I could say a lot on this topic, but I will just say this specifically about the Slate thread for now:

Poor Barb. Having to debate an economist on an economic issue is awkward when you don't even know the difference between a mean and median wage. (She says she is doubtful about Wal-Mart's reported mean wage of $9.68 being accurate and says "I find it hard to believe that half of Wal-Mart's associates earn above $9.68." Now I don't know what the distribution of Wal-Mart wages looks like, but there isn't any reason Wal-Mart's reported number and her feeling about "half" the workers making less than that number can't be right. Right??) She is also in the difficult position of arguing from personal experience and anecdotal information rather than data.

Mosch said...

Just for the record, I agree with you and Ehrenreich that she should not have been invited into this debate. Her last book, as I understood from her interviews at the time, is about her subjective experiences undercover working at low class jobs around the country, including at WalMart. I guess that's why they picked her. And I suppose that's why they matched her with the liberal Furman instead of a true attack dog.

Debbie said...

Right, Sally. The CEO is supposedly paid a much more ridiculously high salary than even other CEOs. So averaging in his salary alone, well, on the other hand, there are an awful lot of other employees.

Tam said...

The advantage, as I see it, of pairing Ehrenreich up with a liberal economist rather than an "attack dog" is that the two of them can argue not about what should happen (where they agree), but the best way to get there. Severing the values argument from the pragmatic one is a good way to present an argument, especially to a mostly liberal readership.

I don't think it would be easy to find two liberal economists to argue [non-trivially] opposing views on Wal-Mart, so I can see why they picked Ehrenreich - her books are popular and she represents the views of a lot of people. And, of course, if two economists argued, they might be tempted to throw terms and stats back and forth in a way that wouldn't be helpful to readers. By having a non-economist, you force the economist to try to explain his position clearly.

sally said...

I've now been able to read the full 6 pages and Tam, man, her response to the electronics store hypothetical really does a good job of displaying the fact that she doesn't have a friggin' clue. What's interesting to me is that she also appears uninterested in understanding the actual economic reality - she is not merely ignorant, but almost defiantly so. (She quotes an economic paper that is anti-Wal-Mart but given her basic and transparent lack of rudimentary mathematical, let alone economic, understanding, she does so to no purpose, and you can really sense how eager she is to get past this meaningless economic analysis to the higher truth of the matter.) To the degree that this exchange aptly sums up the argument over Wal-Mart, it shows what a ridiculous "debate" it really is. (Obviously, there are other aspects to the Wal-Mart debate that are grounded in aesthetics, class elitism, hard core anti-globalization, and so forth, but I mean the economic debate.)

I don't argue with Slate's decision to have these two people debate each other. It provided a good deal of entertainment for me, after all (even though I am not really their typical reader).