It is a law of economics that supply is the ability and will to provide a good or service to the marketplace. What we are seeing recently is the loss of will as businesses are abandoning many of our large cities.
It is a law of economics that supply is the ability and will to provide a good or service to the marketplace. Most of us have observed businesses closing operations because of the lack of ability. A vast portion of business failures are attributed to small businesses, usually owned by one individual or a family. In all of these cases, it is not for a lack of will. The cold logic of insufficient income to pay all the bills asserts itself until a business no longer has the ability to continue.
Since 2020, we have observed a far more tragic trend evolving in many of our cities: the loss of will. Major businesses are abandoning cities because there is no longer an interest to continue. True, much of this loss of will can be attributed to a significantly compromised ability to operate. These stores are most likely losing money and, at best, marginally making enough money to keep the lights on. Why is it that major corporations like Walgreens, Target, Nordstrom, Macy’s, and Walmart are turning their backs on major cities? Is it solely because they are not making a profit? Or have they simply lost interest?
Since the COVID Pandemic, and particularly since the summer of riots in 2020, an ideological shift has beset many of our largest cities. Some of the chief policies that have taken shape are a defunding of the police, cashless bonding of criminals that subsequently enable their release into the community, the reduction of shoplifting as a crime to a misdemeanor, and the lenient treatment of homeless encampments in business districts. The result is what one would expect as criminal activity has soared to the degree that the conduct of a retail business, as we have known it for over a century, is no longer possible.
The modern model of retail stores is something we can easily take for granted. We go into stores and see everything sitting out in the open, where we can simply pick them up, look them over at leisure, and place them into a shopping cart. We collect all we wish to purchase and go up to the cash register and pay for the goods. This model of retail shopping did not exist until early in the 20th century! Before then, merchants would have only selected items out on the floor for customers to handle. But much of the more valuable or more mobile objects were kept behind the counter. We have seen this in many of our movies, where the candy jar is kept on the counter where the shop-owner can watch them. Or the chocolate bars are kept on the shelf behind the cash register. As the multi-purpose grocery store evolved, many of the departments of the store were micro-grocery operations, where the meat section was basically a butcher store. You told the butcher what you wanted and he wrapped it for you. Clothing stores were replete with sales representatives who made certain the clothing was handled in a responsible manner. Regular riff-raff were not tolerated. And much of the clothing was custom-fitted.
As the retail world evolved into department stores and then into malls and super-stores, most everything was placed out into the open. Society at large was overwhelmingly one which held to a morality of personal responsibility. The individual could be trusted. Retail stores could trust their customers to be honest. But in some parts of the country that began to dissolve. A small segment of society took advantage of progressive policies to completely destroy this trust-based retail model. Stores were swamped with open, rampant retail theft. To call it “shoplifting” would be absurd. It was anarchy. Retailers just stood back and let it happen, fearful of negative consequences if they acted on their own accord. What if they did act? The criminals were often let out without bail. The crime they committed was no longer a felony, but a misdemeanor, no worse than jaywalking.
To their credit, many businesses adapted. The open shelves were modified to incorporate plastic shielding where the goods being sold were behind locked doors. This required a significant shift in personnel as running a store now took more people to operate. But something much more subtle was happening, something that debilitates the will more than just ability. Customers no longer felt safe, so fewer came. The inconvenience of having to wait for service to procure basic items became frustrating, and shopping lost its intuitive feel. The final straw, however, was the people who worked in the store. Fearing for their lives, fewer cared to take the risk. It became difficult to fill vacant positions. In essence, the store had lost its soul. No one cared to come, those who came cared not to shop, and those who would work did not appear.
This is a loss of will.
Progressives
Major cities like Portland, Seattle, and San Francisco have been gutted by what is dubbed “progressivism.” I have been around progressives for much of my life and what progressivism meant in the 1960’s is a far cry from the nonsense one sees today. Some critics have dubbed this as Marxism. That it may be but this involves a discussion far beyond the scope of this essay.
What is beyond doubt is that politicians have made some underlying assumptions about humanity, faith and morality that have progressively chipped away at the will.
First, there is a profound mistrust of businesses. Stores like Walmart and Walgreens are most noted for exploiting labor and committing the sin of corporate greed. Stores like Nordstroms and Macy’s cater to the “upper” classes, so they gather no sympathy. Ironically, even stores that are locally owned and many of these owned and operated by minorities, are strangely overlooked. Yet they are often the first to feel the brunt of this mistrust. In essence, corporations victimize customers and employees. Even if the mayor and the city council members all advance these concepts, it still does not prevent an existing business from operating in an American city. Being unwanted does not entail being unprofitable or unneeded (even Chick-Fil-A has eateries in New York City). But such an attitude can have a large effect on a business that is looking to establish new operations in a city. Why bother with a place where you are not wanted? Best example of that is the outcry against Amazon when they attempted to establish their second headquarters in New York City.
The second assumption is that law and order is a product of racism. You hear this often in the arguments for justifying the reduction of funding for police departments. Of course, the word they use is “racist,” that the police target black people for crimes more than white people. The solution, in their eyes, is to stop prosecuting black people for crimes. They commit the crime, but do no time. The net effect is the increase of retail crime.
Finally, homelessness is the unavoidable consequence of capitalism. Homelessness is the culmination of a society that has made housing unaffordable, has doomed many to failure due to inadequate pay or opportunity. This orgy of compassion completely destroys the heart of bourgeois society, where streets are clean and sanitary. Homelessness challenges the core of western society, that we should be personally accountable. Personal accountability is an aspect of bourgeois religious ethics which needs to be replaced by a societal responsibility to care for the needy – only that no one has figured out what “societal” really means. Thus the apparent impotency of cities and states to deal with the matter. The result is the destruction of the modern marketplace.
All of these factors chip away at the business owner, whether it be the Ukrainian immigrant baking pierogis or the corporate board member. In essence, this is an attack against the will.
Pragmatists
So businesses have simply abandoned the cities. It is almost laughable that these businesses are accused of being racist. Have progressives ever taken time to consider why these businesses were in these communities in the first place? Who did they hire to do the work? White people from Peoria? No, many of the employees were black Americans and most of the customers were black Americans. But progressives seem to think that billions of dollars of investment in their community is based on only one thing – greed. And greed is rooted in racism. Corporations maximize profit by maximizing their revenue while paying their employees as little as possible. Being that most of these stores are in black neighborhoods, it is apparent to the eyes of the modern progressive that the victims are black and that the decision to leave these communities is because they are black. That’s all the progressive sees.
Yet after years of crime, the greedy capitalist has simply lost the will to continue. Businesses are not obligated to serve a community. They do not have to adapt their retail model. They can simply leave. And that is what they have done. Congratulations! The progressives win.
You don’t have to be a Walmart or a Target. Small businesses are no different. One of my favorite food stops in Seattle is a pierogi shop. I learned that the store owner closed her downtown location because her employees refused to work there due to crime. She had no choice. If you can’t get reliable labor, then it is pointless to keep trying. This is pragmatism. She may not had realized it, but she was as guilty of capitalist greed as Walgreens. Yet her decision to close the business was not because she was a greedy capitalist, but because she was a pragmatist. Why put money and energy into an enterprise where you are not safe?
Food Deserts
In all the weeping and gnashing of teeth, there is this assertion by politicians that the exiting businesses are racists because they have created “food deserts” in black communities. For most of us who live in rural or suburban America, we fail to appreciate what is happening here. From our house in Georgia, for example, we are twelve miles from the nearest grocery store. How is it that a couple of blocks of a city without a Kroger store suddenly becomes a “food desert?” Customers in high-density areas of our cities do not drive cars every where they go. They walk, take the bus or the subway. For an elderly man or woman living in the city, they need to have a pharmacy and a grocery store within one or two blocks. Under normal, orderly conditions, this has been available. But as these stores have left these neighborhoods, thousands are isolated in high-density communities where basic goods are now miles away. The chief advantage of living in a dense urban community vanishes.
To further appreciate the magnitude of this problem, consider if you are buying groceries for a family. In my case, it is a matter of transferring a few bags of groceries into the back of my SUV. For an urban family, it is a major problem. They have to figure out how to transfer several bags of groceries by bus. Thus, the advantage of having stores nearby was not only accessibility, but the ability to purchase needed items in smaller quantities so it could be hand-carried back to the home.
So a food desert is a serious issue. They exist. Yet it begs the question of who creates this food desert. And it begs for an answer of what it will take to attract businesses back into these communities. As noted above, the problem has evolved because of assumptions of human nature that have made communities unsafe. There is nothing in the U.S. Constitution that mandates that Walmart operate in your community. If Walmart thinks that the open retail model is not possible in south Chicago, then it will simply leave. It’s a big world out there. Doing business in Chicago is a choice. The politicians have created this problem – and they need to solve it. In essence, they need to ask themselves this question: “What will it take to make major retail stores willing to come to our city?”
Its a Gray Area
As noted above, the line between “will” and “ability” is rather gray. It is interesting to note that at one point in history three countries in Latin America were considered the best places to establish a business: Cuba, Venezuela and Argentina. All three fell into deep poverty. The reasons vary, but the end result is the same: businesses were simply unwilling to invest in these countries. Argentina, however, has made a radical change and it is now considered one of the hottest economies in Latin America. The changes made in Argentina attracted investment. When you look deeply into the reasons why you will see that explaining things simply on profit and greed does not provide an accurate picture. Such words as “assurance,” “confidence,” “security”, “rule of law” and “property rights” come into play.
Another example of this dynamic is the decision-making process by which corporations determine where to build their facilities. You might notice that a lot of non-monetary items come into play: education level of the labor workforce, available health care, quality of the schools and quality of life. In other words, what would it take to make a newly-hired manager willing to move to a prospective location.
Recent news has shown notable declines in military recruitment, skilled laborers, school teachers and nurses. Solving those problems is not simply a matter of dollars and cents. It is important to understand why people are not willing to do those jobs.
When I was in high school I would occasionally use the old pickup I drove as a neighborhood garbage truck. I realized that I could make some money at this. But would you believe it that I was not interested in hauling garbage? In other words, it had nothing to do with ability. It had everything to do with will.
The next article will explore ideas that would solve the food desert problem. Is there a way to make retailers more willing to remain in high-risk neighborhoods? Is there a way to prevent rampant theft? Will anything work to overcome the lack of law and order?
© Copyright 2024 to Eric Niewoehner