- Is it economically or politically a good thing to preserve "small towns" in the first place? Although there are certainly diseconomies of scale to consider at some level, the "Wal-Mart wipes out small retailers" argument is an excellent example of applying a current economy of scale to something that exists only because of a historical monopoly effect created by 19th and early 20th-century differentials in transportation abilities and costs. Too often, those differentials are now used as justification for inefficiency. If you'd really like to see these in a microcosm, take a look at communities surrounding military bases that are at least 200 miles from a top-50 SMSA.
- Do the principles of ecological diversity and niche occupation indicate that Wal-Mart is an invader or a change agent? Part of the problem that I have with the most doctrinaire and unregenerate conservatives is that they treat all change as inherently bad on balance, except when those changes are to their immediate and personal financial advantage.1 (Exhibit A: Silicon Valley and the dot-com bubble.) The study of ecology and subspecial communities—something that economics tends to neglect—indicates that the question isn't even as simple as stating the question. There's a good case to be made that Wal-Mart has different functions in different contexts, different niches; and, therefore, is an invader in some of them (usually considered a bad thing) and a change agent in others (usually considered a good thing).
What Wal-Mart really does is make some economic niches no longer viable in the areas in which it operates. Other economic niches, however, remain viable, and even unfilled; so communities that adapt to that can continue to prosper while those that can't don't. Although I haven't studied this in detail, what I have seen points to a very simple survival factor: The better the local education base, the better an otherwise-isolated community survives a new Wal-Mart. We have an excellent example just north of here in Rantoul. Certainly, it's no longer as populous as it was when Chanute (embarassing as it is, I must admit that Chanute was my first duty station…) was actively churning out freshly trained aircraft maintenance personnel. However, there's an excellent argument that the addition of a Wal-Mart in the late 1980s made it possible for that town's retail district to adapt to the base closure. I don't think that would have been possible in an area with a lower proportion of high-school and college graduates.
Of course, one can ask the same questions about the publishing industry, too. Which might leave some authors questioning whether they're merely change agents… or invaders. And the less said about the recording industry and the film/TV industry in this context, the less confused we'll all be, OK?
What the argument really comes down to is this: Is preserving "smalltown America" a good thing, keeping in mind that Norman Rockwell's portfolio is arguably the greatest set of visual fantasies of the mid-twentieth century? While "change for the sake of change" is not an unvarnished good, neither is (or can be) "resistance to change for the sake of the present." Down the latter path lies approval of slavery, Ludd et al., creationism (and its ironically evolved descendant Intelligentscrutable Design), and The Battle of the Books (only not so funny this time).
- Why "financial benefit" instead of "economic benefit"? Because economics is about a great deal more than the profit motive; it concerns the efficient allocation of resources and outputs at a systemic level. Wealth accumulation is a side effect of certain kinds of economic activity and analysis; it is not always a good thing, even to those who are doing the accumulating. Remember that the French Revolution had causes far beyond mere "political enlightenment" or "dissatisfaction with the King"; an increasing proportion of the population in abject poverty had at least something to do with it!