How corporations have robbed Australian communities blind
Notes from a deep green conservative
Here is an interesting game if you’ve got nothing better to do on Saturday morning.
Take a walk through your nearest Bunnings Warehouse (it won’t be far away — there are 295 around Australia and NZ) and guess how many small local businesses it has destroyed since it morphed into a corporation in 1994.
Easier still, join me now as we take a walk around my local Bunnings, located in a fairly typical service town in Australia (they know their demographics — most stores have a roughly similar customer base).
OK, first we drive in through the trade entrance (easier parking and we’ll be in the shade). Hey, look at this. Here on our left we have pavers and tiles, tanks, some fencing stuff and wow, just about every kind of cement you could want. Dozens of product lines.
My guess is this part of the store accounts for at least one local businesses down the gurgler in the last decade, judging by the parlous state of other rural and building supply businesses in town.
But you know — at least the prices are cheap.
OK, around the corner we’re in the timber section. Remember timber yards? I always loved them, but you rarely see them these days. Another business down the drain. Yet here there isn’t a staff member in sight.
Found a park,grabbed a trolley. Guess what, I’m next to hardware. Convenient! Screws, nails, hinges — all those fun things at the heart of hardware.
And look — right next door are tools. Everything from pliers to power drills.
Come to think of it, there used to be little hardware shops everywhere where you could buy this stuff. The guy on the counter knew all the products and could add up your bill in his head. Well, not anymore…
So what’s our score so far? I’d say our community is down four to five businesses — and we still haven’t got to the paint shop.
They were good little businesses. Quite involved really — you could devote a lifetime to paint.
A local economy owned by local people is responsible to its community in a directly human way. Distant shareholders have no stake in a local future
Ah! A staff member at last. Friendly young dude. Recommends the disposable rollers and trays. Saves on the clean-up. Not so hot for the environment, but hey man, they are cheap.
Anyway, I’m sure you get the picture. By the time we get through plumbing, electrical, lighting, kitchen and bathroom, garden and nursery and camping and outdoors I would say we’ve clocked up about another five or six businesses that have been squeezed out by our local Bunnings.
That totals about a dozen small family owned businesses who have had to sack staff, close their shop and either get a job or leave town.
And guess what? Those profits, once invested in other local businesses and the community, now go to Bunnings parent company, an outfit called Wesfarmers Ltd.
In fact, Bunnings is just one of several Wesfarmers “brands”, and if things are going well this corporate parent usually books a net profit after tax of about $2.5 billion (a bit less last year after an ill-fated attempt to replicate Bunnings in Britain).
Wesfarmers’ profits go to its global shareholders — 515,000 of them, many of which are hedge funds and the like that reinvest in other global businesses.
In fact, to be fair, you might even indirectly own a few Wesfarmers shares yourself through your superannuation fund — but then again, haven’t we just had a Royal Commission into these guys and the banks. I mean, do they rip-off their customers or what?.
But let’s get back to Bunnings. You know they are famous for their Saturday morning sausage sizzle right?. They raise funds for local charities that in turn raise money for larger charities linked pharmaceutical corporations who do research into all manner of diseases, many of which are the result of over-consumption of processed food and sugar beverages sold by retail supermarket giants like Coles.
Hang on. Did I hear Coles. Don’t Wesfarmers shareholders own Coles. Well, yes, they do… but technically, those who own Coles shares also own Wesfarmers shares. Let’s not go there — it’s complicated!
Anyway, I must say, I haven’t yet heard of a Bunnings’ sausage sizzle donating to local workers and families whose businesses they have devoured in recent years.
But look, I’m being a bit crude here. If you’re upset, just remember that Wesfarmers owns one of Australia’s pre-eminent art collections that they kindly exhibit wherever their shareholders are concentrated — New York, London, Paris. They are so global.
By the way, I’ve still only seen one Bunnings staff member up close this morning, although there do seem to be a few concentrated around the checkout. More than I can say for Coles — self-serve is all the go there these days.
Now lest you think I’m a cynic, remember there are still a few large independent business around town. What about K-Mart and Target.
Well, no. Wesfarmers own them too. And Officeworks (but not in our town). And a whole lot of stuff in chemicals, energy and fertilisers.
So where are we up to? It looks like we’ve been a bit hard on Bunnings. They are only a pawn, a brand in a bigger game. But it looks like Wesfarmers has soaked up perhaps 30 to 40 local retail businesses around this town in the last twenty years — let’s say about a third of the local economy.
So why does this stuff matter?
It matters because the ecology of business is a lot like the ecology of the environment.
Although you won’t read about this in the financial media, it stands to reason that the more sovereign and diversified a local business ecology, the stronger and more accountable that ecology becomes.
In other words, a local economy owned by local people is responsible to its community in a directly human way rather than to distant shareholders who hold no stake in a local future.
Ownership of the Australia economy is one of the most concentrated in the world. Our communities deserve better. If Wesfarmers crashed, or for some reason took to dodgy business practices, it could affect about a third of our local economy — and a third of most local economies in the country.
That is simply unfair, if not stupid, economics.
And although the traditional local business-owning class, the much maligned bourgeoisie, are sometimes subject to greed, dishonesty and incompetence like all of us, at least it is on a human scale that communities can deal with in their own way.
Community based businesses are also capable of great innovation, flexibility and generosity. They have a collective conscience.
Corporatism has no conscience other than serving shareholders. History will view it as a corrupt system.
That is why it has to go.
And why we have to think deeply about what will replace it.