Walmart's wages and benefits are so low that many of its employees are forced to turn to the government for aid, costing taxpayers between $900,000 and $1.75 million per store, according to a report released last week by congressional Democrats.
As you can see, the people who are really on welfare are not the workers but the owners (the six Waltons) who have externalized some of the costs of running that massive operation. With that in mind, let's visit the London School of Economics and listen to something the social activist Raj Patel says near the start of his lecture "The Value of Nothing":
Prices don't tell us much. Prices hide things. Think of a hamburger. A Big Mac goes for a pound eighty eight. But if the beef was raised on land that used to be a rainforest, the price of that burger would be nearer to two hundred dollars. There is a value that might be assigned to the eco-systemic services that are lost through transforming a rainforest into pasture. There are costs associated with the loss of biodiversity. Costs with the loss of carbon sequestration and deteriorated water cycles. All of that has costs that are hidden from us at the checkout... These costs are paid by somebody but not the McDonald's Corporation.
This is yet another reason why there is no such thing as a free market. The value of the market is not natural but fabricated. Hayek was completely wrong about prices; the information they contain is monstrously incorrect when one considers the real picture, which is always the big picture.
Ultimately, the externalization of costs is "endemic to capitalism." This is what the game is about: "squeezing out these costs."
If you are a CEO trying to keep costs down and profits up, if you do not try to externalize costs you will be fired by your shareholders.