The Business Ethics Blog

Controversy has arisen recently over plans to build a new Walmart in Los Angeles’s Chinatown neighbourhood. Some residents support the plan, welcoming the idea of a convenient source of low-price groceries, clothes, and electronics. Others worry about the effect on small businesses, as well as the potential impact the retail giant would have on Chinatown’s unique culture and flare.

The controversy strikes me as amusing, given certain similarities between Walmart and the stores that already typify Chinatowns in many North American cities. Maybe if Walmart displaces smaller stores it wouldn’t really be as much of a change as critics say it would.

Think of it this way. If I told you I recently bought a very cheap umbrella, made in China, from a store that was chock-full of low-price goods imported from China, and that the clerk who sold it to me was non-unionized, and that I had serious doubts about whether the “organic” apples for sale in the store really lived up to the label, where would you guess I had been shopping?

No, I wasn’t at Walmart. I was at some little nameless place in Toronto’s Chinatown, just a few blocks from where I live. But the similarity between this little hole in the wall and a massive Walmart is in many ways striking. In fact, it often occurs to me as I walk through Chinatown that the entire neighbourhood sort of “adds up” to a Walmart, in certain ways: for starters, there’s the cheap, imported merchandise at low, low prices, and not a unionized worker in sight.

Now, the comparison between Walmart and Chinatown may strike some as insulting. So I hasten to assure you that none of this is intended to criticize Chinatowns in particular. Were it not for the recent controversy in LA, we could just as easily be talking about bodegas, 7-Elevens, and the millions of little mom-and-pop shops that inhabit the nooks and crannies of our larger cities. And I realize that Chinatown consists of more than just small shops selling food and manufactured goods, but those kinds of shops are the ones most clearly in jeopardy when a Walmart comes to town.

Nor is my intention to trivialize what is great about Chinatowns, many of which are surely among the most culturally rich and varied neighbourhoods in North America. Toronto’s Chinatown, the one with which I am most familiar, is an amazing place with an energy and exuberance not found anywhere else in the city.

But still, it is instructive to note that many of the practices for which Walmart has been criticized also seem, to a casual observer at least, typical of the tiny stores that inhabit the streets and alleys of Chinatown.

Now, to be sure, there are also plenty of differences. Where Chinatown is vibrant, Walmart is sterile. Where Chinatown is zany and chaotic, Walmart is a study in top-down control. Where Chinatown is entrepreneurial, Walmart is imperialistic. But it is important to see that not all of the differences play out in Chinatown’s favour.

Indeed, the careful top-down control for which Walmart is famous brings significant benefits, from a business ethics point of view. For one major difference between Walmart and Chinatown has to do precisely with centralized accountability. If you worry about Walmart’s supply chain, for example, and about the manufacturing processes and labour practices that result in those low, low prices, you know who to talk to. If on the other hand you worry about the manufacturing processes and labour practices that result in the wares for sale in Chinatown, then, well, feel free to wonder but there is little concrete you can do about it. The wondrous diversity that typifies Chinatown also implies a problem when it comes to assessing business practices and changing them when change is required.

Another crucial difference has to do with publicity. It matters a lot that Walmart, in part because of its size, is so highly visible. Little that Walmart does goes unnoticed; bad practices and mis-steps draw fire quickly. Compare this to how little we know about the business practices of thousands of tiny, virtually anonymous retailers. It’s not much of a stretch to say that Walmart really is the devil we know.

So, what are we to think about a situation in which Walmart is about to move into a vibrant neighbourhood and, inevitably, jeopardize the future of dozens or perhaps hundreds of small businesses? Clearly, there would be some downsides. But just as clearly, there would be some upsides. But what is perhaps least obvious is that some things just wouldn’t change at all.