The Horror
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Spending Cuts? No. Spending Increases.
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