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My objection to Kunstler begins with the title of his website. I choose not to repeat it here.
He is a Leftist. He is a foul-mouthed Leftist. But the main problem with Kunstler is not that he is one more Leftist critic of the free market. It is that his columns get reproduced on Right-wing sites. He therefore gets credibility. He deserves none.
Matt Taibbi is also a foul-mouthed Leftist, but he is one of the best investigative reporters in America, and his target is usually the fascist state. He ferrets out corrupt deals between big-money special interests and the state. So, I hold my nose when I read him, but I read him.
Kunstler is a whiner who brings nothing to the intellectual table but some slightly updated form of medieval oligopoly. He wants us to believe that the Good Old Boys of the small town council have our interests at heart.
Consider his most recent screed. It begins with an attack on the most successful free market retailing operation on earth, Walmart. He uses Walmart as a representative company for all of the low-price, high-volume box stores. He hates them all.
In the United States, millions of customers return day after day to buy at stores like these. But Kunstler, who is an arrogant Leftie elitist, dismisses them as helpless rubes who need protection from price competitive retailers. And who will supply this protection? The Good Old Boys.
Do I exaggerate? I will cite him verbatim.
Back in the day when big box retail started to explode upon the American landscape like a raging economic scrofula, I attended many a town planning board meeting where the pro and con factions faced off over the permitting hurdle. The meetings were often raucous and wrathful and almost all the time the pro forces won – for the excellent reason that they were funded and organized by the chain stores themselves (in an early demonstration of the new axioms that money-is-speech and corporations are people, too!).
First, ethically speaking, why should a town council be given the right to decide who sells what to whom on what terms? Kunstler objects to the outcome of the meetings, not to the meetings as such. He likes it when the Good Old Boys get the town council to pass a law against Walmart, thereby protecting their mark-ups.
Second, what is the heart of this “disease,” this “scrofula”? Price competition. You know: giving the customer more for his money. The horror!
The chain stores won not only because they flung money around – sometimes directly into the wallets of public officials – but because a sizeable chunk of every local population longed for the dazzling new mode of commerce. “We Want Bargain Shopping” was their rallying cry. The unintended consequence of their victories through the 1970s and beyond was the total destruction of local economic networks, that is, Main Streets and downtowns, in effect destroying many of their own livelihoods. Wasn’t that a bargain, though?
You bet your monthly budget it was a bargain. It still is, which is why millions of customers shop there.
Kunstler is a standard oligopolist. He laments the loss of “local economic networks.” This is a code phrase for the system that the local merchants ran in their own self-interest through control over markets. They had the local government fine anyone who set up shop without a license. Five centuries ago, this was called the town guild. It was based on force. The guild’s members made it illegal for anyone to offer to sell anything that had not been approved by the existing guild of producers.
He laments the loss of those good old days. He wants the state – the local town councils – to stick a gun in the belly of every consumer. “You want to buy, boy? Well, here’s the deal. You will buy from the reputable sellers who got here first. You want a discount? We’re not going to let you waste your money on discounts from outside agitators. We will protect you from your own dark side. We are not going to allow you to get cheated by this national chain, which offers low prices and a 100% money-back guarantee. You are going to pay what the Good Old Boys have gotten together to decide what is fair. Got it, boy?”
First it was Sears, Roebuck. Then it was J. C. Penney. Then it was Woolworth’s. Then it was K-Mart. Then it was Walmart. These interlopers came into a local town and offered bargains. The local producers who could not afford to compete then went out of business. This has been going on for well over a century. It is the story of American progress.
Kunstler is having none of it.
Despite the obvious damage now visible in the entropic desolation of every American home town, WalMart managed to install itself in the pantheon of American Dream icons, along with apple pie, motherhood, and Coca Cola. In most of the country there is no other place to buy goods (and no other place to get a paycheck, scant and demeaning as it may be). America made itself hostage to bargain shopping and then committed suicide. Here we find another axiom of human affairs at work: people get what they deserve, not what they expect. Life is tragic.
I see. No other place to buy goods. Costco is a figment of our imaginations. Amazon is mythical. We are all “held hostage.” We have all “committed suicide.”
“Life is tragic.” Ah, yes: the tragic sense of life. And it is all expressed in this slogan: “Save Money. Live Better.”
Kunstler abuses the privilege of being silly. He continues.
The older generations responsible for all that may be done for, but the momentum has now turned in the opposite direction. Though the public hasn’t groked it yet, WalMart and its kindred malignant organisms have entered their own yeast-overgrowth death spiral.
“Malignant organisms.” “Yeast-overgrowth death spiral.” This guy is like a 12th-grade journalism major writing in the student newspaper. He needs an editor.
In a now permanently contracting economy the big box model fails spectacularly. Every element of economic reality is now poised to squash them. Diesel fuel prices are heading well north of $4 again. If they push toward $5 this year you can say goodbye to the “warehouse on wheels” distribution method. (The truckers, who are mostly independent contractors, can say hello to the re-po men come to take possession of their mortgaged rigs.) Global currency wars (competitive devaluations) are about to destroy trade relationships. Say goodbye to the 12,000 mile supply chain from Guangzhou to Hackensack. Say goodbye to the growth financing model in which it becomes necessary to open dozens of new stores every year to keep the credit revolving.
Excuse me? Am I to believe that some underfunded little store in a strip mall is going to be able to pay for truckers to deliver supplies when Walmart can’t? Really?
February 28, 2013
Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 31-volume series, An Economic Commentary on the Bible.
Copyright © 2013 Gary North
