Nobody did more to unsettle rural America than Henry Ford, but that didn't prevent him from pining after the small-town values and traditions he and his automobile disrupted. Late in the 1920s, long after his own cars and factories had made the village life of Ford's boyhood all but obsolete, he spent millions re-creating it in a park on the outside of Detroit, complete with dirt roads, gas street lamps, horse-drawn carriages and a grassy town square. "I am trying in a small way," Ford said, "to help America take a step toward the saner and sweeter idea of life that prevailed in the pre-war days."
If there is a Henry Ford of the late 20th century, it is Sam Walton of Bentonville, Arkansas, the creator of Wal-Mart stores. His new autobiography, Made in America, published shortly after his death this past April, all but gushes with praise for the small-town values that he says made him a business success and kept his head on straight long after he'd become a billionaire. "We thrive on a lot of the traditions of small-town America," Walton wrote of his $42 billion, 1,800-store empire. He says he and his wife kept the corporate headquarters in Bentonville "so we could raise our kids with the same values she and I had been exposed to in our youth."
Walton never had his boyhood home made into a theme park, the way Ford did, but he did install a Wal-Mart museum on the Bentonville town square, in a restored version of the old Five-and-Dime Building where he first opened up for business in 1951. What he wanted, Walton said, "was to capture a little bit of the old dime store feel." That dime store is the 1990s equivalent of the buggies that still trudge up and down the roads of Greenfield Village, Henry Ford's ersatz hometown. It is a relic of the world that Sam Walton both loved and helped to destroy.
There is no reason to doubt the sincerity of Walton's old-fashioned values. He was a genuine Rotarian, Presbyterian deacon and small-town Chamber of Commerce president. But there is also no mistaking the legacy of the Walton era: boarded-up stores and deserted Main Streets in just the sort of towns he cared most about, towns that fell victim to giant Wal-Mart stores that came in and priced their goods so low that the independent merchant never had a chance.
This is a familiar enough story by now; it has been the subject of quite a few newspaper and magazine articles over the past decade. But the issue seems to have stung Sam Walton to the end of his life. "Nobody has more love for the heyday of the small-town retailing era than I do," he protests in his autobiography. "Of all the notions I've heard about Wal-Mart none has ever baffled me more than this idea that we are somehow the enemy of small-town America."
Walton mounts a reasonable enough defense-he didn't kill Main Street, change killed it. If he hadn't dropped Wal-Mart stores all over the landscape, then K-mart or Target or Woolco would have come along and done the same thing. From the point of view of the druggist or hardware dealer forced out of business, it would have amounted to the same thing. "The small stores were just destined to disappear," Walton wrote. "It was as inevitable as the replacement of the buggy by the car."
He goes further. Not only was the Wal-Mart phenomenon inevitable, he says, but it has been a good thing for the communities it has hit. There are 400,000 Wal-Mart employees, and the full-time ones are eligible for profit sharing. A significant number have become rich by investing in company stock. Most important to Walton, though, his low prices have kept money in the pockets of ordinary rural people like the ones he grew up with. The dimes they save on socks and toothpaste make it that much easier to get through the week on a tight budget. "Millions of people," he argues, "are better off today than they would be if Wal-Mart had not existed."
Fair enough. But one still has to balance those gains against losses of a staggering dimension. It is not just a matter of nostalgia for the days when locally owned stores competed with each other for business across a thriving town square. It is a matter of numbers.
Kenneth Stone, an economics professor at Iowa State University, used sales tax data to study what happened to the economies of 30 Iowa towns in the years after Wal-Mart located there. In every town Wal-Mart entered, total sales went up. But Wal-Mart was about the only beneficiary. Almost everybody else lost. If a new Wal-Mart store does $17 million worth of business in the first year-the average in Iowa during the period Stone studied-and total sales in the community increase by $7 million, it doesn't take much imagination to guess what has happened to the other businesses in town. They have lost $ 10 million. "It steamrolls local business," says Doug Bachtel, a rural sociologist at the University of Georgia. "It just steamrolls them flat."
But it goes beyond numbers, and beyond boarded-up windows on Main Street. Gone with those dollars, within a few years, are most of the local merchants who provided the civic and political leadership. "If a family gets put out of business," one storekeeper in Maryland told a reporter last year, "you lose a community leader. It means we have fewer store owners and more cashiers and clerks."
Meanwhile, the profits made by the new Wal-Mart (or K mart or Target or whatever) do not stay in town. They make a brief stopover at a local bank then depart for the corporate treasury hundreds of miles away. "That basically takes money out of the area," says Kenneth Stone. "It's that much less money in local banks that could be loaned to the community."
To say that is not to accuse Wal-Mart of a crime. Wal-Mart is in business to make money. Keeping the downtown drug store operating is not its responsibility. But local governments do have a responsibility-to learn to cope with the Wal-Mart era and manage it in a way that preserves as much of a town's identity and character as possible.
Theoretically, at least, the range of options includes keeping the discount store out of town altogether. A new 100,000-square-foot store nearly always requires some zoning changes, and a community determined to keep Wal-Mart out has the legal leverage to do it. "If some community, for whatever reason, doesn't want us in there," Sam Walton said, "we aren't interested in going in and creating a fuss."
He could afford to say that because, in most places in America, the political pressure is on the side of bringing the discount store in. It's not that people want their downtown to dry up; it's just that those problems are off in the distance, and bargain prices are just one simple rezoning away.
This year, Wal-Mart is opening more than 150 new stores. Many of them are in places that have so far escaped the discount invasion-places like Omak, Washington, an isolated town of fewer than 5,000 people in the rugged northeastern part of the state. Downtown Omak has stayed alive. But by next year, if all goes according to plan, this tiny town will have two huge discount stores staring at each other across the highway. "After Wal-Mart and K mart fight it out, you aren't going to have a downtown Omak," says Kenneth Munsell, director of the Small Towns Institute in nearby Ellensburg, Washington. Nevertheless, the approval for giant stores made it through the town planning commission in two days. "They are blithely unaware of the consequences" Munsell says.
But as Wal-Mart expands ever further, into more sophisticated suburban territory, it will meet some different responses. Last year, Wal-Mart announced plans to build two giant stores in Ellicott City, Maryland, between Washington, D.C., and Baltimore. The construction required a zoning variance, and Wal-Mart hired a lawyer to argue for it. But residents were able to afford two lawyers to argue the opposing side, and packed Howard County council hearings with citizens saying it was the wrong store in the wrong place. The zoning board turned Wal-Mart down.
This wasn't so much a matter of merchant opposition as it was homeowners worried about noise and congestion. But the message was clear: Comfortable Howard County didn't need Wal-Mart badly enough to let it come in and take any piece of land in the county it happened to be hungry for.
That is not going to be the typical case in most of the country. Most communities are not going to tell Wal-Mart to go away. But zoning power gives them much more leverage over a giant retail company than most of them realize they have. If they use it, they can squeeze concessions that can prove important to community life in the long run.
The local government of Carroll, Iowa, told Wal-Mart that it was welcome to come in, but it had to locate within close proximity to downtown, where there happened to be a large piece of land available. Wal-Mart normally doesn't like to build downtown, but it did so in Carroll, three blocks from the center, and thereby minimized the damage to the Main Street retailers, who are benefiting from the additional traffic and avoiding the isolation that normally sets in when the new Wal-Mart is out on the highway, five miles from town.
"Just because a Wal-Mart wants to come to a community," says Kenneth Munsell, "doesn't mean you have to let them in on their terms. You have options, and you should stand up for them. A lot of places just cave in. But if you have strong laws and you force them to do things, they will do them." The current head-to-head competition between Wal-Mart and K mart makes the opening for a smart local government that much bigger; if it tries hard enough, it may be able to play one against the other for the community's advantage.
On the fundamental point, Sam Walton was right: Change was inevitable. Main Street couldn't survive forever as it was a generation ago. If you want to see an American small-town dime store, circa 1951, the best place to see it is probably Bentonville, Arkansas, at Sam Walton's museum.
But the reality of the destruction wrought by the Wal-Mart era does not mean that communities have to march into it blindfolded, lambs to the slaughter. Leaders can lead; governments can govern, even when their town budget is $5 million and the company they are negotiating with is worth $42 billion. That is what governments are there for.
This article originally appeared in Governing Magazine, September 1992. Reprinted with permission.