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May 14, 2007 | Andrew Winston | Jump to: Comments (0) | Post A Comment

Bentonville and the Future of Commerce

I went down to Wal-Mart headquarters this weekend to do my Green to Gold talk for the Sam’s Club management. I had a unique experience in that the other speaker was Super Bowl champion Peyton Manning, so over half the audience was made up of the kids of all the execs — so climate change and environmental strategy was not really the top priority for them (I did get to meet Peyton, but I joked that even if my family had been there, they wouldn’t have been there to see me).

Anyway, making the pilgrimage to Bentonville is always interesting — this is the largest, most powerful private enterprise the world has ever seen, and there are no trappings. The company lives the low-cost lifestyle. But the whole journey got me thinking a lot about the “end game” for Wal-Mart, and for all of us. I mean it when I tell audiences everywhere that whether you agree with its practices or not, when the history of green business is written, it will be about Wal-Mart. The company’s impact is just too great for it not to be at the center (I highly recommend Charles Fishman’s The Wal-Mart Effect for a very thoughtful review of what a company that size means for society). The real challenges of sustainability come after the “low-hanging” fruit of energy efficiency are found (of course we do have a lot of room to run on the easy stuff — another post coming about this…). But these hard questions of how we build a sustainable consumption society will be faced first and largest in Bentonville. If we don’t get it right there, we never will.

So I’ve been contemplating what capitalism and consumption will need to look like in the future. Going into Paul-Hawken-we-need-a-new-model-for-commerce mode for a few hours is fun. So…what will a sustainable capitalist society, and Wal-Mart, look like? This question takes books to try and answer so I’ll just posit a very topline qualitative answer (and one much less detailed than the specific and well-thought out Natural Step “system conditions”). Here it is:

All consumption will need to be “conscious,” meaning aware of how something was made, by whom, from what materials, how it will be used, where it will end up, and on and on. But “aware” may not mean every consumer literally knows all this, but that the overall system gets the prices right (or in economist terms, all environmental and social costs — like a fair wage for everyone involved in making something — will be internalized). In that future state, some things will definitely cost more (and some may cost less). We’ve made some leaps like this in the past — Henry Ford moved the needle on his day’s debate on “living wage” by paying his employees $5/day.

But imagine we get there and prices reflect the true costs. Within that new structure based on the higher expectations of society, why can’t Wal-Mart continue to compete on providing the lowest prices? Isn’t Wal-Mart in the same power seat that Ford was 80 years ago?

Will the cost of living be higher in some ways? Absolutely. But then we handle the burden this might place on some people in different ways from artificially lowered prices. Maybe the poverty line is higher, or some parts of the country, where, say, a gas tax is more regressive, get more tax breaks. We can find the solutions. How we get there, and some of the hurdles, are for another time (meaning I don’t exactly know).

But I do know that what won’t work is going along as we have.

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