heiss93
26th November 2008, 19:19
Isn't the Wal-Mart model an example of Labor theory of value. Yes they respond to supply and demand. But no one denies the importance of S&D.
However Wal-Mart does not sell products at their maximum supply and demand point, instead they sell it at the minimum profit point. The minimum profit point is not affected by demand at all, but ONLY by costs of production. And while increases in tech and efficancy can help relatively. The easiest way to cut costs is to cut labor costs. That is why Wal-Mart places so much pressure on producers. Manufacturers find the only way to meet the Wal-Mart price is to go overseas for cheaper labor. Ultimately economic crisis are not based on subjectivist demand, but on labor power. Because labor does not receive full wages they can not purchase their own goods. No where is that more clear than in the USA where the Reagan-Bush regime employeyed Pinochet/Austrian/Chicago/Sameulson style economics and once the Republicans controlled congress and the presidency were able to fully implement their ideology. The result was under Bush the 1st decline in wages during an economic expansion in history.
However Wal-Mart does not sell products at their maximum supply and demand point, instead they sell it at the minimum profit point. The minimum profit point is not affected by demand at all, but ONLY by costs of production. And while increases in tech and efficancy can help relatively. The easiest way to cut costs is to cut labor costs. That is why Wal-Mart places so much pressure on producers. Manufacturers find the only way to meet the Wal-Mart price is to go overseas for cheaper labor. Ultimately economic crisis are not based on subjectivist demand, but on labor power. Because labor does not receive full wages they can not purchase their own goods. No where is that more clear than in the USA where the Reagan-Bush regime employeyed Pinochet/Austrian/Chicago/Sameulson style economics and once the Republicans controlled congress and the presidency were able to fully implement their ideology. The result was under Bush the 1st decline in wages during an economic expansion in history.