In Defense of Shopping Malls

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by Gary North: ‘Yes,
Virginia, There Really Is a FreeLunch’



A standard
critique of American capitalism is that it produces shopping malls.
Shopping malls are said to be ugly. They all look alike, and they
all clutter the landscape with mediocrity. They have replaced diversity
with uniformity. They replace traditional architecture with cookie-cutter

This is a
short-sighted criticism. Whatever they have replaced was said at
the time to have done the same to whatever existed before. Villages
replaced woods and plains. Towns replaced villages, except when
villages turned into ghost towns, just as they still do today.

Shopping mall
architecture is dismissed as cookie-cutter architecture. But what
is so wrong with cookie cutters? Cookie cutters long ago replaced
knives. They made shaping cookies easier. The cookies looked the
same, thereby overcoming diversity, and also saving time and trouble.
I imagine that some master baker cursed the day that some inventor
came up with the idea of a low-cost cookie cutter, which made acceptable
bakers out of people who could not be trusted with a knife.

I like shopping
malls. Yes, they are similar to each other. I like this about them.
I can look at a shopping mall or a strip mall and know if that’s
where I want to shop. I see a recognizable store. As with fast food
restaurants and restaurant chains, shopping malls save me time.
Time is my most precious resource. I do my best not to waste it.

In my youth,
if I was visiting a medium-sized town, I would recognize Sears or
J. C. Penney, but beyond that, it was guess work. Which hardware
store had what I wanted? Where was it located? There was no Lowe’s,
no Home Depot, which have just about anything anyone wants. Where
to stay overnight before Holiday Inn? Where to eat a meal before
restaurant chains? The only restaurant chain I can recall in my
pre-teen years was Bob’s Big Boy. I only remember the one in the
San Fernando Valley, because my aunt took me there on visits. There
were a few other Bob’s stores in southern California. If you did
not want a hamburger or a spoon-thick milk shake, you were out of

How many restaurant
chains there are! In the good old days, there were diners and a
few nice restaurants in town. There was a Mexican restaurant or
two in southern California, and a couple of Chinese restaurants
in most towns. There was a burger shop/soda fountain. But you had
a narrow choice of restaurants locally. Inside a chain today, you
know what will be available and how it will taste. There may be
limited menu choices inside, but there is a wide range of choices
of chains. These are not chains of bondage. They are chains of choice.


Inside a Wal-Mart
or a Target or a Sam’s Club, I have a range of choices so spectacular
that nothing in my youth compares with it. There were no such local
emporiums in my youth. The famous multi-story department stores
did offer a wide range of choices, but not at low prices like today.
There were not many such stores. There were half a dozen in a major
city. People knew about Macy vs. Gimbels. In Los Angeles, there
was the May Company. These were the kinds of stores we saw in Miracle
on 34th Street
. People in the suburbs did not have anything
like them.

Mid-sized cities
had a Sears and a Montgomery Ward. Small towns had the catalogue
published by the national retail stores. The Sears catalogue was
a marvel, but the buyer had to trust the advertising copywriters
and photographs. She could not hold the item in her hand. She could
not go to a cash register and buy it on credit. She had to send
a check or else put it on her Sears credit card, which was where
the big profit was for Sears.

The range
of choices keeps growing. One estimate of the number of different
physical products marked by an SKU number (the famous bar code)
in the region around New York City is 10 billion. This is inconceivable.
It takes computers to track it all.

The supreme
economic issue is the range of choices. The best definition of economic
growth is this: “an increased number of choices.” The more choices
you can afford to make, the richer you are. We are rich indeed in
the United States. The single most representative architectural
mark of this cornucopia is the shopping mall.

I have a friend
who had contacts with top Communist Party members in the Soviet
Union in the late 1970s and 1980s. He sold and installed satellite
dishes in the USSR. He dealt with people who were rich enough and
politically correct enough to be allowed to buy satellite dishes.

one of them would visit him in his Bay Area home. One visitor asked
my friend to take him shopping, so he could see how Americans lived.
So, my friend drove him to a local commercial area south of San
Francisco. He took the man inside. “No,” his guest said. “I want
to see a real store.” My friend assured him that this was a real
store. The man denied that this was anything but a store for the
elite. “I want to see a store where the average person shops.” My
friend took him to another store. Same response.

“All right,”
my friend said. “I’ll drive. You point to any store you want to
go into.” The man agreed. When they entered the first store, the
man stood in the middle of an aisle. He began to weep. Then he said:
“They lied. They lied.” His worldview came unglued in that aisle.


When I am
in a Wal-Mart or a Sam’s Club, I look at and listen to shoppers.
They come in all colors. Most of them dress alike. I cannot tell
where they came from by how they dress. I saw the same thing on
a trip to the Middle East in 1985. Except for old men dressed in
leather in Constantinople, every man was dressed in jeans and a
cotton shirt. He was wearing what looked like Nike shoes. I could
not tell where I was, based on clothing styles.

I hear families
chattering in unknown tongues. We are all there for the same reason:
to find a deal. That is the American way: the quest for a better
deal. This quest has governed all cultures in history, but Americans
have made it a distinctive cultural trait. We spend more time looking
for deals than any society in history ever has. Why? Because there
are so many deals available. When your choice is “take it or leave
it,” and you have little money or few choices, it does not take
much time to decide. Sorting through a cornucopia takes more time.

The economist
defines “cost” as “the most valuable thing that you must forego
in order to buy what you want.” This is called “opportunity cost.”
In America, it takes a lot of time and effort to identify that highest-cost
item. There are so many choices. Which opportunity is the highest
value option foregone? The more the choices, the more likely that
individuals will spend more shopping time for additional goods.
The more we shop, the more that things cost. Why? Because we keep
finding other sweet deals. The sweetest deal foregone is the true
cost. We pay less money, but we spend more time shopping. So many
deals, so little time!

So, I look
and listen as I walk down the aisles. I think: “I wonder if these
people understand the system of competing bids that has produced
this cornucopia.” Everyone in the store appreciates the wide range
of choices. Everyone is looking for a sweet deal. We share this
common trait: the quest for a better deal. We are all Americans

But not many
people understand the workings of the Great American Auction. They
do not understand the system of private property, of contracts,
of monetary policy, of free trade inside the nation’s borders. They
do not understand that the very prospect of their bidding against
each other today at the auction was what motivated producers to
produce all these goods. The hope of profit and the fear of losses
guided producers. Buyers vs. buyers, sellers vs. sellers: the Great
American Auction goes on day and night in the local Wal-Mart Supercenter.

In London
after 10 p.m., you can buy a few hundred items at a local store
owned by an immigrant: maybe a Pakistani. In the USA, you can buy
from a selection of 100,000 items at 3 a.m. at a Wal-Mart
. We sing our national anthem: “O, say, can you see,
by the dawn’s early light?” By the dawn’s early light, I can see
cars in the Supercenter parking lot.

The complexity
of the system of production, delivery, purchase, and re-stocking
in a Wal-Mart Supercenter is beyond anyone’s ability to conceptualize.
Computers do much of the work. But the system is more than just
computer entries. Think of the highway support system that lets
the trucks roll day and night.

We trust in
the continuity of the system. We expect it to be there tomorrow
and next year. We walk down those aisles, and we think, “I can buy
this now or later.” We do not really understand how this is possible.

Everyone in
the store has faith in the store’s ability to re-stock the shelves,
almost invisibly. The shelves are filled with goods. A person in
a Third World society does not understand how this is done in America.
But neither do most shoppers here.


Think about
this. You walk out of a store, item in hand. Should the store manager
re-stock it? Maybe not this week: the week after Christmas. Or maybe
he should. If he is to stay in business, he must decide accurately.

In a modern
mass retail center, a computer decides. Before a buyer exits Wal-Mart,
the computer has placed an order for the replacement item. The chain
of delivery begins. The item will be ordered from the manufacturer,
delivered to a Wal-Mart trucking center, and sent on its way to
a regional center. Then the container section will be unhooked and
left for the deliveries locally. The company’s inventory is in 18-wheelers,
not in warehouses. The savings are passed on to the buyers.

We take it
for granted that the shelves will be full the next time we shop.
But why should we take this for granted? Do we even understand the
process? Few do. Few ever have. In 1845, the French author and (later)
politician Frdric
Bastiat wrote this paragraph
coming to Paris for a visit, I said to myself: Here are a million
human beings who would all die in a few days if supplies of all
sorts did not flow into this great metropolis. It staggers the imagination
to try to comprehend the vast multiplicity of objects that must
pass through its gates tomorrow, if its inhabitants are to be preserved
from the horrors of famine, insurrection, and pillage. And yet all
are sleeping peacefully at this moment, without being disturbed
for a single instant by the idea of so frightful a prospect. On
the other hand, eighty departments have worked today, without co-operative
planning or mutual arrangements, to keep Paris supplied. How does
each succeeding day manage to bring to this gigantic market just
what is necessary – neither too much nor too little? What,
then, is the resourceful and secret power that governs the amazing
regularity of such complicated movements, a regularity in which
everyone has such implicit faith, although his prosperity and his
very life depend upon it? That power is an absolute principle, the
principle of free exchange. We put our faith in that inner light
which Providence has placed in the hearts of all men, and to which
has been entrusted the preservation and the unlimited improvement
of our species, a light we term self-interest, which is so illuminating,
so constant, and so penetrating, when it is left free of every hindrance.

This system
of supply and demand, all governed by the auction’s principle of
“high bid wins,” delivers the goods literally. It rests on private
property, contract, accounting, and a monetary system. No one is
in charge. No committee oversees the outcome.

concern was that the government would interfere with the operation
of this system. There would be then committees overseeing the delivery
of goods into Paris.
would you be, inhabitants of Paris, if some cabinet minister decided
to substitute for that power contrivances of his own invention,
however superior we might suppose them to be; if he proposed to
subject this prodigious mechanism to his supreme direction, to take
control of all of it into his own hands, to determine by whom, where,
how, and under what conditions everything should be produced, transported,
exchanged, and consumed? Although there may be much suffering within
your walls, although misery, despair, and perhaps starvation, cause
more tears to flow than your warmhearted charity can wipe away,
it is probable, I dare say it is certain, that the arbitrary intervention
of the government would infinitely multiply this suffering and spread
among all of you the ills that now affect only a small number of
your fellow citizens.

This should
be everyone’s concern. As regulations pile up at the rate of 80,000
pages per year in the Federal Register, as Congress passes
more laws for the executive agencies to multiply in their implementation
of new rules, and as state and local governments intervene with
their own regulations, producers must factor the relevant rules
into their plans.

Then, every
six weeks, the Federal Open Market Committee of the Federal Reserve
System decides how much Federal government debt to buy in order
to stimulate the economy. This, too, must be factored into the decisions
we all make, day by day, regarding profit and loss in the future.

happens, but it gets ever-more risky, ever more uncertain, as government
officials and Federal Reserve officials decide how best to regulate
a system of ten billion products, plus services.

We know this
much: we could not do this effectively. Yet, as voters, we assume
that a series of government officials all protected from being fired,
none of whom have any money at stake, can and will regulate this
system to our benefit. This way, the shelves will be re-stocked.


The shopping
mall is one of the great social institutions of our time. They did
not exist in most cities as recently as 1950. They bring to the
suburbs what only the great cities had in my youth.

The shopping
mall delivers the goods. It brings the goods we want to buy to shelves
located a few minutes away from our front doors. It faces competition
from FedEx and UPS, which bring the goods to our front doors.

The shopping
mall drove out of business the hardware store that was located downtown
three decades ago. It forced other small businesses to close. But
the shopping mall is the agent of consumers. We keep demanding better
deals. We should blame ourselves for the demise of those abandoned
businesses and abandoned dreams.

The strip
mall brings the cornucopia even closer to our front doors. Dollar
General, Dollar Tree, and the other dollar stores offer even cheaper
goods for our consideration, and in smaller buildings than those
in the main malls. They save us both money and time.

Are strip
malls beautiful? They are more beautiful than the run-down districts
in every city, where we do not live close to or shop.

The aging
downtowns in fading communities across the land are legacies of
dreams abandoned. Dreams abandoned are the inevitable cost of newer
dreams realized.

see closed-up shops in a strip mall, and I think: “Less-good deals.”
When we got richer, we shop for better deals.

When was the
last time you were in a butcher shop? A locally owned TV/appliance
store? A diner where old men meet every morning for coffee and rolls?

There is an
old rule: “Never eat at a place called Mom’s.” I violated this rule
only once, in a small town in Louisiana. It was the worst food I
ever ate. I walked out, leaving a bowl of gumbo behind. If the rule
holds true in a Cajun restaurant in Louisiana, where all food is
good, it holds everywhere.

At Wendy’s,
I know what I will get. Better yet, it’s located right across the
street from a mall.

1, 2011

North [send him mail]
is the author of Mises
on Money
. Visit
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible

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