Is it bad that big chain stores like Walmart are killing mom and pop shops? Do you care where to buy things that you need?
You can’t solve a problem by blaming the wrong cause. Big chain stores are not killing mom and pop stores. Let’s look at the top two culprits:1) CustomersCustomers are the proximate killers of mom and pop stores.Now, this should be obvious, but I guess we need to remind folks: Customers themselves are choosing to take their money to big chain stores rather than to mom and pop stores, which results in ‡ (Ta-Dah!)‡ the death of mom and pop stores.Why? Let’s turn again to Business 101: Because the big chain stores give customers a better tradeoff of price, assortment, selection, convenience, terms, hours, environment, parking, credit, financing, inventory, etc.The customer is getting more total benefit for their dollars and for their time by shopping at big chain stores than they would receive by shopping at mom and pop stores.Now, those (few?) authoritarians who realize this, complain that the customer is a dum-dum, and they try to replace customers‡ preferences with theirs.But that’s not fair! It’s the customers‡ money that their labor created, and it’s their time that they are spending shopping. Frankly if these authoritarians had any empathy and humility it would be obvious even to them: customers should be able to spend their money and their time wherever they durn well please! (But, thank you for your opinion, Big Brother. :)In fact, some people could argue that those who condescend to tell customers what their tradeoffs “ought to be”, given that they don’t even know these people and are rarely anything like them, are the real dummies.And arrogant dummies to boot.2) GovernmentBut a more important question can be asked: “How can big chain stores offer such a better package of shopping to customers?”Which brings us to the second biggest killer of mom and pop stores (and, as you will see, this culprit directly impacts killer #1.)It’s government.More specifically, it is the government’s heavy-handed, bureaucratic implementations of taxes and regulations and zoning and inspections and reporting and minimum wages and background checks and licenses and handicap access and bathroom requirements and window display restrictions and shake-down lawsuits and equal employment and affirmative action  and immigration enforcement , and trade barriers, and restrictions of personal safety, and social security and withholding and insurance regulation, and sexual discrimination, and sexual harassment, and sick leave, and …‡ and ad seemingly infinitum .Government, because it “cares so much about us”, creates far too much overhead and hassle for mom and pop to be able to handle on their own. It makes running a small business much too costly and too hard, and sadly, way too much of a headache, relative to how Big Business can amortize the high government overhead costs across numerous business lines and numerous employees and headquarters staff.So, the customers see higher prices, less selection, fewer hours, worse environment, less customer service, half-dead owners, etc. and they make their decision accordingly.But what they don’t see is the cause, their noble government helping them out. (Motto: “Caring uppermost for the consumer, and of course, for our friends, the mom and pop store”).Optimism among small-business owners remains below average, with owners reporting no net growth in employment. And yet they don’t report competition from larger businesses or poor sales as their top concerns. Instead, they list “taxes” and “government regulations and red tape” as their biggest problems- Government is killing small business - The Boston Globe(Notice in the graphs below that “regulation” and “taxes” have almost always been bigger concerns than “big business” for small businesses:)Source: http://www.nfib.com/assets/SBET-...Solutions: Authoritarian versus LibertarianThe normal authoritarian fixes are to pass more laws and more regulations, but this time, the authoritarians assure us, why, they’re going to protect the mom & pop stores and hurt those big mean ole‡ chain stores. Because authoritarians? Why, they ain’t nothing if not always on the side of the little guy!Ha!“Please, Br'er Fox, don't fling me in dat brier-patch!”They are ignoring decades of public choice theory. Do they not understand regulatory capture?“More government?”, Big Business strokes its chin. “Ex-ce-lent!”Large companies will just spread out the costs of more lobbying, of “working with” government, of expert testimony, of writing regulations, of providing jobs to retired, helpful regulators, of court cases, of campaign contributions, of public relations projects, of conventions, of hosting junkets, of putting together “educational retreats”, of fees and taxes and reporting costs, of ….The mom and pop stores? One thing we know for sure is that they won’t be there, camped out in the regulators‡ offices kissing butt and filing hundred page briefs and attending hours of boring “public hearings”, they’re too busy toiling until 2AM filling out their government report forms, and then getting up at 6Am to sweep their sidewalks.The libertarian solution is simple:Take Big Government out of the equation. If customers want certifications, and assurances, and insurance, and special privileges for certain favored identitarian groups, well, let private companies offer such certifications. Small businesses will be able to decide if the costs are worth the customer benefit, and customers will themselves weigh trust in their local provider versus third-party assurances.Let the customers decide. We can’t know if Big Business will win out over small business, even if we remove the inevitably unfair advantage of Big Government. But when Big Business is not being unduly, unfairly advantaged by the violence of Big Government, we will be able to find out! How? By watching how customers decide to voluntarily spend their own money when small business are not hamstrung by bureaucratic busybodies.And if big chain stores win out, why, good for them! But right now, it’s not fair. The winner is more because of the interventions of Big Government, and not what is best for us customers and certainly not what is best for mom and pop.Unfortunately, most of the people who purport to be concerned with the disappearance of the mom and pop stores, why, they have all types of solutions ‡ ‡ and every one of them start with increasing Big Government.And then they scratch their heads and wonder, “Where the heck did all those mom and pop stores go?”(Must have been Walmart that done them in!)See related:How Government Favors Big BusinessCan libertarian small government eliminate crony capitalism?Who benefits most from Big Government?Do libertarians ignore economies of scale?How Government Destroys Society ValueWhat would business owners do with the cash from a tax cut?How does licensing hurt the poor?Who should regulate capitalism?The Arrogance of GovernmentAre libertarians or authoritarians more narcissistic?What mistakes do politicians repeatedly make?How are government regulations a threat of violence?What types of people want to regulate others?Why Private Folks Would Do a Better JobWhich is more effective: government regulation or private certification?What regulations do libertarians advocate?Do employers actually want to pay their employees lower than minimum wage?What libertarian reforms could be done at the local level?How libertarians solve the transgender bathroom issue?→ Other Cronyism Essays by Dennis Pratt→ Table of Contents to Dennis‡ Libertarian WritingsFootnotes The Heavy Tax Burden and the Plight of the Small Business - Being Libertarian Small Businesses Win Some Regulatory Relief small business - Karl Dickey's Blog https://www.cityofboston.gov/ima... Could Trump’s Deregulation Be a Lifeline for Struggling Entrepreneurs? Will a Higher Minimum Wage Close a Beloved Bookstore? Stossel: Stop! You Need a License To Do that Job! Unreasonable Accommodation Texas small business owners speak out against transgender bathroom bill Chicago to Businesses: Did Licensed Contractors Hang Those Window Signs? Serial ADA lawsuit filer striking Bay Area Employee Rights: What Small-Business Owners Need to Know The 7.63% Solution SAFE Act an Expensive Boondoggle We Need Actual Free Trade, Not the TPP Philly Votes to Regulate Bulletproof Glass in Corner Stores Invisible Taxes: The Government Dirty Secret Look What These 25 Regulations Are Doing to Small Businesses