The world's largest retailer has dramatically changed the nature of the American economy and the U.S. economy may never completely recover. The post-Depression U.S. economy has flourished because of producer power. The producers of goods and services have controlled society. The consumer has had very little power because it is diverse, unorganized and without a single voice. Economists' think of the consumer voice expressed as "demand." Consumers want smaller cars so the producers have to comply. Consumers want bigger cars and the producers are forced to change. This; however, is not a challenge to the overall dynamic of economic power. Production is simply adjusted to account for changing consumer demands. The basic relationship between producers and consumers has not been altered, until now.

Wal*Mart has fundamentally changed the rules. For the first time in capitalist history what is sold and what it is sold for is being determined by the demand side of the economic equation. Producers are now at the mercy of their customer because their customer is simply immense. The largest consumer product manufacturer (Proctor and Gamble) sells a full 20 percent of all its merchandise through Wal*Mart. Wal*Mart is the largest food retailer in the country. Thirty percent of all household goods are sold through Wal*Mart. Wal*Mart is also the largest seller of entertainment (CD's, DVDs and videos). Wal*Mart is the biggest customer for such producers as Levi Strauss, Revlon, and Rubbermaid. Fewer and fewer producers can survive if Wal*Mart does not buy their products. Economic power has moved to the buyer of products and away from the supplier.

This has had a fundamental impact on production. Wal*Mart forces efficiency because of its pricing demands. Producers have little choice but to accept the pricing that Wal*Mart requires. Consequently, they must take the steps necessary to meet these demands. The result of this is the globalization of production. Producers cannot use expensive American labor if they want to sell their goods and still make a profit. The consumer manufacturing sector is basically leaving the American continent. It started in the 1990s as outsourcing became viable in places like Korea, Malaysia, Mexico and others. It picked up steam when China became a manufacturing alternative. While Wal*Mart is not the only reason for this, it is surely the leading force for outsourcing. When Wal*Mart required a price decrease from Levi Strauss, the "All-American" company had little choice but to close its 4 U.S. plants and move production out of the country. In order to fully comprehend this change it is important to understand the number one rule for capitalist production: The Bottom Line is essentially the only line.

This change is dramatically changing the American economy. The recent improvement in corporate profitability has not resulted in job growth. Those jobs are going oversees, never to return. The jobs that remain are also being impacted. Companies that compete with Wal*Mart can no longer pay wages higher than those paid at non-unionized Wal*Mart if they want to remain profitable. The recent Southern California supermarket strike demonstrated this dynamic in action.

Thanks to Wal*Mart consumers pay lower prices for just about everything. Because of Wal*Mart consumer wages are such that these lower prices are an absolute necessity. Corporate profits can remain steady as long as their offshore production alternative continues to expand. At present, the only real losers are small businesses that cannot compete with the giant and trade-unionism, which is gradually working itself out of existence.

More change is on the horizon. Production power is gradually moving to the emerging nations and it won't be long before the ultra cheap labor rate gets chipped away by higher wage demands. Consequently, producers are now finding that these emerging consumers are a sufficient market for their goods to keep the profits up. Consumption is becoming a global phenomenon and it is coming at the expense of North America.

Cities like Inglewood, CA and Oakland, CA have fought the Walmartization of their towns by legislation. This hardly seems a viable means for changing the inevitable. It is not as if Inglewood workers will continue to enjoy high wages just because Wal*Mart is not in town. In the new economic reality consumers require the low prices that only a Wal*Mart is able to supply. Inglewood consumers will have little alternative but to shop in neighboring cities that have not opposed Wal*Mart expansion. The global economy is changing and the American consumer, small retailers, and main street U.S.A. are on the losing end.