Global Policy Forum

By Robert B. Reich

Wal-Mart is America's largest corporation, with a whopping $256 billion in sales last year. It's also the largest employer in the United States, with more than a million American workers. And that's not including millions more Americans who work for companies that exclusively supply Wal-Mart.

Is Wal-Mart too big? Not according to America's antitrust laws, which consider only one thing—whether a company is so big it drives competitors out, thereby forcing consumers to pay more. Wal-Mart is huge, but it still represents only 8 percent of retail sales in America. That's not nearly enough to reduce competition. And no one can accuse Wal-Mart of forcing consumers to pay too much. The company's entire strategy is to charge consumers as little as possible, by using computerized ordering and distribution systems, paying its employees extremely low wages and squeezing its suppliers. These cost-cutting measures may hurt local retailers that can't meet Wal-Mart's low prices, and they're not popular with all employees and suppliers, but Wal-Mart consumers are the clear beneficiaries.

Yet there's another tradition of American antitrust that may be relevant here. We don't hear much about it any longer, but a century ago, antitrust was also concerned about companies becoming so large they distorted the political process. In fact, the danger to democracy posed by large corporations was the primary reason for antitrust laws being enacted in the first place.

By this criterion, Wal-Mart may indeed be too big. Its size gives it huge political clout. Recently, when its plan to open 40 "super-centers" in California ran into a buzz saw of local political opposition, Wal-Mart responded in kind—even financing local ballot initiatives to overturn zoning laws. In March, following one hard-fought campaign, voters in Contra Costa County reversed a county ordinance banning super-centers.

Nationally, Wal-Mart's Political Action Committee is now the second-largest in the country, doling out giant contributions to political candidates. And its lobbying muscle in Washington keeps growing.

Maybe it's time to reinstate the first principle of antitrust—and what better test case than Wal-Mart?