A paper written by Steven Horwitz, an Austrian-school economist (we’re still not quite sure what that means, other than it’s considered slightly controversial), recounts Wal-Mart’s relief efforts after Hurricane Katrina (PDF) and points out that private businesses, along with the Coast Guard, did far more than any “official” government agency in providing immediate, on-the-ground assistance to victims. His argument is that something as complex as a relief effort is more efficient when it’s decentralized and involves private businesses. Horwitz has also, separately, supported the idea that Wal-Mart should win the Nobel Peace Price. Hey, we told you his school of economics was controversial.
Horwitz describes how, in the hours before Katrina struck, Wal-Mart’s CEO laid out a ground plan of autonomy to store managers to do what they felt was best—in effect, giving them permission to take fairly radical actions that in other circumstances would have been considered criminal:
Another element of Wal-Mart’s successful response was the great degree of discretion that the company gave to district and store managers. Store managers have sufficient authority to make decisions based on local information and immediate needs. As the storm approached, CEO Lee Scott provided a guiding edict to his senior staff and told them to pass it down to regional, district, and store managers: “A lot of you are going to have to make decisions above your level. Make the best decision that you can with the information that’s available to you at the time, and, above all, do the right thing.”
In several cases, store managers allowed either emergency personnel or local residents to take store supplies as needed. They did not feel the need to get pre-approval from supervisors to do so. A Kenner, Louisiana employee used a forklift to knock open a warehouse door to get water for a local retirement home. In Marrero, Louisiana employees allowed local police officers to use the store as a headquarters and a sleeping place as many had lost their homes.
In Waveland, Mississippi assistant manager Jessica Lewis, who was unable to reach her superiors to get permission, decided to run a bulldozer through her store to collect basics that were not water-damaged, which she then piled in the parking lot and gave away to residents. She also broke into the store’s locked pharmacy to supply critical drugs to a local hospital.
Now about that peace prize thing—Horwitz says that consequences are what matters, not intention:
To the extent that Wal-Mart (and market capitalism more generally) have both encouraged people to deal with each other on the basis of voluntary exchange rather than force and have raised the standard of living so greatly, especially of the poor, they have made the world a more peaceful place. And in the long run, their contributions to peace are probably far greater and longer-lasting than the politicians and social missionaries who normally get the Prize.
Whaddya think of that? Do the good deeds of Wal-Mart, intentional or not, outweigh any damage it causes?
Update 2:50pm:
Stephen Horwitz, the author of the Wal-Mart paper, wrote in to clarify a few points.
Thanks for linking to my study on Wal-Mart and Katrina. I’ve been reading the comments section and rather than post myself, I thought I’d email you with three clarifications/corrections that you can either add yourself or tack to the end of the entry or just ignore.
1. I do NOT work for Wal-Mart. I sometimes shop there though. I’m a college professor at the opposite end of the country from the Gulf Coast and equally far from Bentonville. [He's a professor of economics at St. Lawrence University in New York.]
2. The wikipedia entry on Austrian economics is pretty good explanation of what the school of thought is about: http://en.wikipedia.org/wiki/Austrian_School
3. The 1112am commenter about what an Austrian economist supposedly said about 20-30% unemployment etc, is simply false. Nor does Austrian economics say everything should be “left to corporations.”
“Making Hurrican Response More Effective: Lessons from the Private Sector and the Coast Guard during Katrina” [Mercatus] (PDF document)
RELATED
“The Case for Wal-Mart Winning the Nobel Peace Prize” [The Austrian Economists]
“In Wal-Mart we trust” [National Post] (Thanks to Chris!)
(Photo: Brave New Films)
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Forgive me for actually liking Wal-Mart. Low prices and community involvement mean more to me than false negative stories and corporate conspiracies.
By “community involvement” do you mean running locally owned stores out of business and depressing area wages? Or do you mean paving over greenspaces and ruining local ecosystems? Because when I think of “positive community involvement,” it somehow doesn’t involve poverty and urban sprawl.
I’ve heard several apocryphal stories involving WM after the storm. Namely, the one where they had dozens of 18-wheelers loaded with ice that were parked on the side of I-10 because FEMA wouldn’t let them through.
Given what was reported about Wal-Mart, and what was reported (and that I personally observed) with FEMA, it doesn’t sound all that unlikely.
That is kind of amazing. I had no idea this went on. As a geek, I have always admired Wal-Mart’s IT department/infrastructure (it’s truly spectacular if you’re into that kind of thing) as well as their skill at logistics. (There’s also plenty about WM that I don’t like, so you can just backspace over that “fangirl” comment you were writing.) I’m not sure this outweighs everything bad they’ve ever done, because they’ve done a lot of really bad shit. It does, IMHO, build back some karma points in my book that they allowed their managers such wide discretion in helping people through a nearly incomprehensible catastrophe.
On the other hand, it’s pretty fucking sad that corporations like Wal-Mart come out of this looking better than the federal government.
@lookoutscout: By community involvement, I’m talking about how if it wasn’t for Wal-Mart, many low income schools would be without essential educational materials. They also donate to many research organizations and provide scholarships in some areas. I’m no environmentalist. “Paving over greenspaces” is natural expansion. Whether you love or hate Wal-Mart, if Wal-Mart didn’t pave the way for new stores and offices to be built some other company would. I look at the larger scheme of things, but I do understand, however, that I don’t care too much for the environment that much.
What is america going to do when another incident of this magnitude occurs?
Probably the same response as we saw last time. A city tore itself apart and brought out the worst in humanity while we watched it on TV.
Stopped watch, twice a day, etc.
Regardless, Wal-Mart did right on this one, and for that they deserve credit. Does this mean the private sector is better at responding to disasters than the government? Not really; it shows that that the private sector is better when the government is run by people who believe that government doesn’t work (and then set out to prove it.)
Remember that, back in the Clinton years, FEMA was considered a model federal agency.
@lookoutscout: Funny but I have yet to see a Wal-Mart in the North East area, that wasnt a Bradley’s or Caldor, or some other out of buisness department store company who’s building had laid vacant for 5-15 years.
@Verklemptomaniac: It’s been my experience in the rebuilding that the government (at all levels) has only succeeded in getting in the way. All it needs to do are three things: 1) oversee the insurance industry such they don’t fuck the policyholders too savagely; 2) put defrauding contractors in jail (or rather, under the jail, or in a vat of acid, I don’t care which); and 3) maintain law and order.
We can handle just about everything else on our own.
@lookoutscout: Walmart is always the biggest check every year for an organization I run. As for putting smaller business in the gutter, that is THAT CITIES PLANNING AND ZONING FAULT. They should have not zoned the area they way they did, placing a walmart far enough away from a CBD or SBD normally stops this fake problem.
Yes, if these actions are true, they deserve applause, and they are in no way reduced by other issues Wallmart most certainly has.
If a convicted rapist out on parole saves a drowning victim, is his actions any less heroic than the exact same actions performed by a Priest?
Good on Wal-Mart for doing this. There were also plenty of OTHER people who did things like this. The clusteruck that was FEMA should be placed squarely where it belongs: the federal government. That doesn’t mean you throw the baby out with the bathwater.
Also, Wal-Mart doing this means that they’re HUMAN BEINGS; it doesn’t wash away all the other truly shitty stuff they do, like leaving harmful chemicals outside their stores when it rains so that they drain into local water supplies, or screw other companies by artificially lowering prices.
Sun shines on a dog’s ass every once in a while.
“Do the good deeds of Walmart, intentional or not, outweigh the damage it does?”
In a word, NO.
@SkokieGuy: Did he try to have sex with the person drowning?
these people who dis wal-mart obviously haven’t lived paycheck to paycheck. Wal-Mart helps the poor people of this county by keeping prices low. There’s a great Penn & Teller Bullshit episode about wal-mart.
@SkokieGuy: And yes, yes they ARE. You can’t screw people left and right and sideways and then do a good deed and be like “hey, we’re cool now, right?”
“She also broke into the store’s locked pharmacy to supply critical drugs to a local hospital.”
That’s a wow. As a lowly cog in the huge machine that is Wal*Mart, in such a situation, there isn’t much I wouldn’t have considered doing to help out… But I would have been scared as hell to do this one. Bravo to this person – I would have collapsed under pressure to make this decision.
WalMart succeeded here where government failed b/c like it or not, at the topmost levels, extremely competent people run WalMart.
When total retards like Brownie and Nagin and Blanco and Bush are put in charge of government, it’s doomed. Change the culture of incompetence and cronyism, and we all get better government and services as a result. Garbage in = garbage out.
Let me guess, Mr. Horwitz is actually employed by Walmart. (Remember a few years ago when it was discovered that one “movie critic” was actually someone from a Hollywood studio writing the “reviews” for his companies movies.)
@omerhi: The priest or the rapist?
Sorry…
“His argument is that something as complex as a relief effort is more efficient when it’s decentralized and involves private businesses.”
When the relief is run by this administration, sure, I can go along with that, but not when it’s run by a real administration.
Government is terrible at almost everything it does except collect taxes. That applies to both major parties. We’ve forgotten that the job of the Federal Government is 1) highways and infrastructure 2) national defense. Local’s get law enforcement, and I like libraries, but beyond that let competitive capitalism do what it’s good at: finding a better/cheaper way to fix/make/destroy/kill things.
Maybe Wal-Mart did right on this because people give them such a hard time for their success (see above posts), maybe they did it because of a corporate conscience… I don’t care. They did it, they did a great job at it, and God bless ‘em for it.
What great challenge did FEMA face under Clinton? Saying that a (mostly) untested entity was great under one guy and terrible under another is a little partisan, don’t you think? Besides, didn’t LA authorities do a lot to break the process down there? Weren’t we waiting for permission from Gov before we could send forces in? Didn’t the Mayor drop the ball on evacuating his constituents?
I’m just sayin’…
@skitzogreg:
Nice avatar.
“Mac-Daddy will make your files…jump, jump.”
I stole that.
@omerhi:
Walmart is not seeking a pass for their other egregious behavior. Walmart is not commenting on these actions. The OP refers to an independent Australian researcher who is praising Walmarts efforts during Katrina, specifically as contrasted to our own government’s totally inept response.
I am not suggesting, and I don’t think anyone else is suggesting that somehow Walmart’s sins are now cleansed. On Consumerist we all thoroughly bash Walmart and most often deservedly. All the more reason to give praise on the (rare) occasions when it is deserved.
My comment is that YES, Walmart is deserving of praise for bypassing typical corporate policy and empowering employees to take courageous and unprecedented actions that saved lives and helped during truly desperate times.
If we trash this one extraordinary instance of heroic actions on the part of many Walmart employees, would we prefer that they do nothing exceptional in the future the next time an area is hit with a catastrophe? I think this behavior should be applauded LOUDLY and encouraged.
@savvy9999: @omerhi: I am sorry, but where was the LOCAL government in Katrina? I hate when people blame the federal government for stuff like this. If there is a fire in your town, do you call the government/National guard in, or local firemen? If there is an Earthquake, who provides assistance first? Your LOCAL government and first responders. What about the Coast Guard? They’re federal, and were able to mobilize faster than most any other Federal agenicies, due to them having extremely mobile equipment. They saved many people who were left hanging due to the local governments total lack of activity. What about the local governments letting buses sit in lots to be flooded and thus un-usable? Storm tracks are not very predictable sometimes, and you can’t mobilize units to each place where landfall may occur, as some may get stuck where they are, and unable to provide assistance. So you let local government, who being on the coast, should have plans in effect provide first responses, then you respond to the area that needs it. Local gov screwed the pooch, which left more people in trouble/in need of assistance, which then overwhelmed the governments back up response. OK, you can start flaming me now for not caring about black people.
I applaud Wal-Mart for doing the right thing, but frankly the contest was rigged. The problem with the government response to Katrina wasn’t that government response is inherently inefficient. The problem was that THIS government’s response was inept. FEMA under Clinton was far more organized and effective in responding to natural disasters big and small. This is a classic case of Republicans breaking the government and then using that as proof that the government doesn’t work. Its like the child who destroys a toy with wanton carelessness and then whines, “see, its no good.”
@Chad LaFarge: Actually, I’d argue that the government isn’t even good at collecting taxes. Why else do we have this huge ‘tax season’ where everybody’s scrambling to do the government’s work for them, telling them how much we overpaid or underpaid in taxes?
And I think Verklemptomaniac’s FEMA comment referred to the fact that a ‘model’ government agency screwed up so horribly (maybe that’s what they’re supposed to do?). At least that’s the way I took it.
IF this was posted yesterday, i would have had a good laugh, but I think it was a decision that would not have made too much difference in the end. I know the CEO announced it lower level employees, but this would only speed things up as in the end, they would have done what seemed suitable at that breaking point.
But it was still nice to have had it announced to speed things up during these hard times.
As far as I can tell, people get down on Wal*Mart because they aren’t the kind of place that sells free-range coffee. But they would, if the kind of people that are into free-range coffee shopped there.
The Austrian school of economics says basically that the government should keep out of everything besides the most basic tasks and leave everything to corporations.
One of the main proponants once statet that he wishes for a 20 – 30 % unelmpoyment rate cause that would break the power of theunions …
its pretty strong stuff and i am not sure that it would be a better world if all of there ideas were used.
@Falconfire: Look at Rte 1 and 130 in NJ – West Windsor, East Windsor, Hamilton, One of the Brunswicks all had new Wally-World construction over the past decade or so, while several Bradlees, Caldors, Jamesways, etc still sit vacant.
@Git Em SteveDave: Easy hoss– I explicitly mentioned Nagin, to reference the local government that failed also. As little more than a populist whiner, he was and is no better or competent than Brown or Blanco or the myriads of others who completely f’d up the evacuation and the subsequent non-rebuilding of the Gulf Coast.
@petrarch1608:
Thank you for that tip… great video. I had no idea.
@EllenRose: That was so perfectly put.
In a business that sets out to make money, you don’t get that far addressing the needs of people who aren’t in your core constituency.
There are plenty of negatives about Walmart, but as this story (and some of the anectdotes in the comments) confirm…There’s also some positives.
It’s funny how a lot of people don’t seem to want WalMart to ever do anything good. No matter what you think of WalMart, don’t you want to see companies act like this during a disaster? Shouldn’t you give credit where it’s due for this particular action, even if you don’t like others? I guess not if you’re a hate filled ideologue who’s so bitter that you would prefer that your favorite target (no pun intended) hurt others rather than help just so you have another talking point for DailyKos or Digg.
@Chris Walters: Conglomerist is shuttered; Consumerist is back. Perhaps you didn’t get the memo.
Just kidding, kudos to WM no matter what other people here say. You get smacked for doing things wrong, you get thanked for doing things right.
@lookoutscout: Didn’t you see the South Park about that?
It’s funny, I had an officemate who was very concerned about looking professional, even when it came to buying a bag to bring to the office (business casual). She loved Wal-Mart for their clothes!
BTW, hope we’re aware of the Katrina Myths: [article.nationalreview.com]
“virtually all of the gripping stories from Katrina were untrue. All of those stories about, in Paula Zahn’s words, “bands of rapists, going block to block”? Not true. The tales of snipers firing on medevac helicopters? Bogus. The yarns, peddled on Oprah by New Orleans Mayor Ray Nagin and the New Orleans police chief, that “little babies” were getting raped in the Superdome and that the bodies of the murdered were piling up? Completely false. The stories about poor blacks dying in comparatively huge numbers because American society “left them behind”? Nah-ah.
“an ubiquitous media chorus claims simultaneously that Katrina was Bush’s worst hour and the press’s best. That faultless paragon of media scrupulousness Dan Rather proclaimed it one of the “quintessential great moments in television news.” …
“But in the race to prove the federal response incompetent, the “real journalists” missed some important details. As Lou Dolinar exhaustively documents, the National Guard did amazing work in New Orleans. From the Superdome, the Guard managed some 2,500 troops, a dozen emergency shelters, more than 200 boats, 150 helicopters (which flew more than 10,000 sorties moving 88,181 passengers, 18,834 tons of cargo, and saved 17,411 survivors), and an enormous M*A*S*H operation that, among other things, delivered seven babies.”
As much as Walmart gets a bad rap (and rightly so, in my opinion), I’m willing to believe that they did a better job than our very own federal government. They really bungled this one up badly enough to make all private efforts look like the work of professionals.
@Git Em SteveDave: I’m not defending the NOLA govt response, but one of the things that happens in a major disaster is that the local responders are crippled/nonexistent/victims themselves. It’s tough to keep your police and fire dept. running if they have lost their homes, don’t have facilities to work from and are stretched absolutely too thin to be effective.
We can applaud Wal-Mart’s efforts without putting blinders on to their other activities. Bravo to Wal-Mart for doing this. Doesn’t mean I will not buy anything from them.
There is more than enough blame to go around in Katrina, from the federal level to state to individuals who didn’t evacuate when they were told to and then bitched and moaned when shit happened.
But, in the context of Katrina, bra-fucking-vo to Wal-Mart for its efforts to help during that hellish episode.
@lookoutscout:
WELL said !
Walmart has no problem employing thousands of people at poor wages and no health insurance.
I’m sure they could afford this for the good publicity it desperately needs.
This doesn’t exonerate them from all the work they need to do, but in of itself is pretty magnificent behavior. Kudos to Wal-Mart for doing the right thing.
I might just get all warm and fuzzy next time I am there to save my precious few pennies on deodorant!
@EllenRose: You obviously don’t shop at Wal-Mart. I live in Arkansas, steps from Wally HQ, and get to see all the innovations they roll out, like certified free-trade and certified organic coffee. Because of its buying power, they are now pushing Clorox’ new brand of green household cleaners (the toilet bowl cleaner is great), and compact fluorescent bulbs. Wally can persuade big companies to make cleaner, greener, better products. The new Sam’s Club in Fayetteville, AR, is a model for their future stores. The fridges have motion sensors so the lights only come on when someone is standing in front of them, they harvest rainwater and channel it back through the native plants they landscaped with… the parking lot is made of recycled materials…
If anyone can lead the revolution, it’s them. Like them or not, Wally is always the biggest name and the biggest check at any charity event I’ve ever participated in.
And, when a week’s worth of groceries at Wally cost me $100 and the same items at Harp’s cost $145…
…Only after the GOP destroyed a well-lauded FEMA and turned it into a mockery. Using this logic, once the DEA erroneously shoots both a kid’s parents dead, Dickensian orphanages are superior for raising children.
Yet again the private sector puts big government to shame. And to think the answer so many propose to these problems is to give government MORE power and MORE control.
I genuinely appreciate the fact that the commenters over here view Wal-Mart’s actions instead of just the whole image. The actions listed in the post are commendable. The Gawker tone is getting a little ugly on a Wal-Mart post over there.
The PEOPLE of Texas did more than Wal-Mart ever dreamed of doing for the Katrina victims. We opened up our homes, churches, and school gyms so they would have a place sleep. We also donated tons of food and clothing on top of that. No… Wal-Mart shouldn’t get the Nobel Peace Prize… The State of Texas should!
People need to get over Katrina. Yeah, the Government should’ve done more, but in the long run its the people that should at least TRY to help themselves instead of relying on someone else to do it for them. Many Texas Gulf Coast cities have been devistated by hurricanes in the past, yet have you ever heard them ask for help the way the Katrina ‘victims’ have? That answer would be NO!
@Git Em SteveDave:
And where would they have moved the buses to where they wouldn’t get flooded? Were they supposed to park the buses along the streets and clog the evacuation routes? Who was supposed to move the buses, the bus drivers who were evacuating their own families? As you stated in your post, you don’t know where the storm is going to hit so you don’t know where to stage the first responders. Including buses that could possibly used for evacuations.
You know what happened to my neighborhood during Katrina? The Jefferson Parish Government told the pump operators to evacuate the city so they would be safe, and then come back after the storm, even though they volunteered to stay. After the storm the operators could not get back into the parish due to roads and bridges being out. So as a result my house flooded because the pumps were not operating. They could not pump the rainwater out of the storm drains into Lake Pontchatrain. They were damed if they did and damed if they didn’t.
The point of this post is that Walmart was able to get ice and water into the city well before the federal government was. And I am sick and tired of the Bush apologists making excuses for the way the feds handled this situation. Were there positives in the midst of all the negatives? You bet, the Coast Guard is one of the federal, state, and local agencies that did an outstanding job. As did the Louisiana Department of Wildlife and Fisheries.
And your fire analogy is way of the mark. Katrina was a lot worse than a building being on fire. Katrina was a disaster of biblical proportions, affecting three states. Mississippi and Alabama had the same logistical problems, however none of them had a city as large as New Orleans hit by the storm. Hell, prior to Katrina I don’t believe any of them had a city as large as New Orleans period.
The bottom line, the Federal Agency specifically created and designated to respond to, and alleviate suffering after a natural disasters like this failed. Miserably. A lot of the people stuck ALL along the Gulf Coast have Walmart to thank for their very lives.
There is a Department of Homeland Security office inside of a Wal-Mart distribution center, because they are the only ones big enough to handle certain emergencies. That is pretty scary.
I still put Wal-Mart at the number 2 spot on my most evil company list, right behind Monsanto.
They are the leaders of Genericana. Making the entire country look the same. Putting small businesses out, and moving factories to China.
If Jeffrey Dahmer helped an old lady cross the street (and then didn’t eat her after she got to the other side), it still wouldn’t change the fact that he was a serial killer.
FEMA’s primary mission is to write really big checks to help in the purchase of emergency shelter and fund rebuilding. They almost never have much of a presence in the first 72-96 hours of a disaster – that is all local and state (ask Floridians). Witness the fact that Katrina actually hit Missippi harder than Louisiana, yet despite widespread devastation and propoerty damage, Mississippi dealt with the storm a lot better – local and state (including National Guard) authorities responded well and saved lives, FEMA came in later and bought trailers, food etc. – remember, they don’t have assets like truck or choopers, they rent or buy what they need in the circumstances. Wal-Mart owns literally maga-tons of food, supplies, trucks etc – frankly it would make sense for FEMA to coordinate more with them, since there is no point in FEMA buying a bunch of stuff before a storm hits and then pushing the stuff so far forward that it is destroyed or trapped by the storm (but of course, the further back it is kept, the longer it takes to deliver). Walmart, on the other hand, already has its assets located everywhere – some stores may be destroyed by a storm, but the odds are that others will be intact and convenient. All the feds would have to do is to guarantee that they would pay for any supplies documentd as given away as relief.
I would also note that although FEMA’s response on the ground was not nearly as bad as reported, and that the geography of New Orleans made the mission particularly difficult, FEMA and DHS’ top echelons in Washington fell down completely. They basically had no idea how well or how poorly the folks in the field were performing.
Finally, the lying of the New Orleans “authorities” (snipers, roving bands of armed bandits, etc) and the yellow journalists that repeated and amplified these claims made things much harder for FEMA and other relief agencies, as they all demanded armed escorts to deal with the non-existant threats before they would move convoys. That the crying Governor took a while to allow Federal Troops and Guardsmen from other States to enter LA didn’t help either -but can you imagine the outcry if Bush had unilaterally usurped the power and authority of a female, Democrat governer and simply declared federal marshall law (which, IMHO, should have been done anyway, since lives are supposed to be worth more than politics).