As monetary tightening continues in the U.S. and a stronger dollar contrasts with other economies - Walmart is among those now feeling the effects. In at least one instance, this major retailer will even close a recently opened store, which had replaced local family businesses. However, those former businesses could be hard pressed to begin anew, once their all too recent competition closes its doors.
Oddly, the Walmart closings hasn't gotten as much attention in the news as one might expect. However, Walmart isn't just any retailer. This development matters in part, because Walmart became representative of a broad range of retailers and organizational structures. In recent decades, this corporation transformed the stage for tradable goods manufacture in the marketplace on a number of levels.
Will many groups among these business operations face further setbacks, as Walmart contends with its current retrenchment in overall capacity? Walmart certainly isn't alone, as a tradable sector component that faces new vulnerabilities. States in the U.S. have been feeling the effects of the downturn in the oil industry as well, and this downturn is starting to spill over into other industries. How to think about these issues at a broader level?
For one, declining labor force participation has not received enough attention from policy makers, as a long term growth issue. Also: for decades, many have assumed that developed nations could continue to develop their services economies, once tradable goods sectors could not be counted on as a primary source of local wealth.
However, the service economies which represent important facets of knowledge use, need organizational capacity in ways which make direct wealth formation and greater employment possible. A time based marketplace which coordinates time product on symmetric terms, is one way to achieve this. Without the possibility of wealth capacity through services product, tradable sectors would still be expected to provide further revenues for governmental fiscal needs. This, even though tradable sectors are now suffering, and not enough citizens have the economic access to provide the customer base which tradable sectors need.
Ultimately, aggregate supply in the form of full employment is central to the equation of fulfilling aggregate demand, and the most important services exist in relation to time based product. Even though tradable sectors will still provide future revenue for asymmetric compensation up to a point, they cannot be expected to do so for services sectors as a whole. If a smaller services marketplace was the only issue at stake, perhaps this would not be so problematic. But when labor force participation is low, tradable sectors also suffer. This is why production also needs to be approached directly and symmetrically, so that services and tradable sectors can each contribute to the health of the other, well into the future.