Sunday, June 26, 2011

Who "destroyed" free markets?

Which of the following do you have in your area?

Independent, locally owned grocery store
Independent, locally owned drug store
Independent, locally owned stationery store
Independent, locally owned movie theater
Independent, locally owned book store
Independent, locally owned department store
Independent, locally owned daily newspaper
Independent, locally owned lumber yard
Independent, locally owned hardware store

By independent, I mean that there is only one location and that often the owner works in the store.

Grocery stores and drug stores are most likely chains, either national or state-wide.  Stationery stores are most likely national chains.  Movie theaters have been done in by technology, either television or VHS/DVDs.  Independent book stores have been done in both by large chains and technology, the latter being e-books.  Department stores multiplied with large shopping malls and then got gobbled up by large chains.  Daily newspapers have been part of large syndicates before I was even born.  Lumber yards have been replaced by three or four large chains.  And local hardware stores are dwindling.

So much for a large number of sellers, an integral part of the classical free market.

If it wasn't technology that did in a retail outlet, what or who was responsible?

How about a Republican president?  Dwight Eisenhower pushed the interstate highway system which led to urban sprawl.  City neighborhoods were decimated when people in large numbers moved to the suburbs.  Dwindling neighborhoods led to fewer customers who walked to do most of their shopping.

How about large corporations?  With their greater buying power, large corporations can easily undercut small stores on prices.  Greater buying power also gives an advertising edge to large corporations.  In Duluth, a locally owned group of drug stores went out of business this year.  Walgreen's was just too much for it.  Only about three or four owner-operated pharmacies are left.  When I was a teen-ager, I lived in a Cleveland neighborhood that had three owner-operated pharmacies.

How about development-hungry city governments?  Duluth made a big splash about getting an Office Depot to locate downtown.  Guess what, the locally-owned, downtown stationer went out of business.  Guess what again, Office Depot corporate closed the store within a year or so.

How about ourselves?  We would rather go to a big store with a big selection.  We would rather go to a chain we know than try something unknown.  I know when I travel I favor one hotel chain and too often eat at a chain restaurant.  The latter I do because too often the only restaurants around chain hotels are chains themselves.  Fortunately, I do find pleasing exceptions now and then.

Take heart, true believers in true free markets.  There are many businesses still around that are local and numerous.  There are the craftspeople - plumbers, carpenters, electricians, and so on.  Despite the proliferation of chain restaurants and coffee shops, there are quite a few local restaurants and coffee shops.  There are still plenty of local barbers and hairdressers.  Local breweries are making inroads on mega-breweries by providing better taste.  And at least in Duluth and Superior, most liquor stores are locally owned.  I'll drink to that!