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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 architecture.
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 luck.
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.
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.
Occasionally, 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.
A WALK DOWN AN 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 here!
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 Supercenter. 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 Frédéric Bastiat wrote this paragraph.
On 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.
Bastiat’s 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.
Where 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.
Re-stocking 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.
I 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.
January 1, 2011
Copyright © 2011 Gary North