But if it’s so valuable… why aren’t people willing to pay for it?
Forgoing luxuries like a vacation to support local stores full of people you know and trust, that might charge 20% more for the same product, seems like an obvious thing…
Huge sections of America/American's are incredibly poor.
Add that the highest income people were the first to switch to Amazon, and are more online first than community first. It didn't take losing too many of those customers for the economics to fall apart.
I live in a tourist town that has had a huge influx of new, higher wealth people post COVID. Surprising to me our businesses/restaurants are doing worse with this new population with more money, not better. They live here for the amenities, but other than on the mountain biking trails/ski mountain/lake (on their boats or remote beaches, detached from most people) you never see them. They work from home, but our walking trails are the sparsest I've ever seen them. None of them seem to go out to eat, especially not lunch. It's awful. And now that they are here, property prices have gone up, so more locals (and the children of locals definitely) will be priced out and replaced by work from home types who... just disappear into their houses. They buy all their gear online instead of supporting the local shops, the local knowledge, the places help organize/arrange for trail maintenance, more land into conservancy. From my one town observation modern upper middle class American's appear to be a net-loss for the local community. They are the types so into their sport they do all the own maintenance, then expect the local shop to do the 1 or 2 things they can't/don't want to do. The local shop can't survive on that little bit of work on your 'all internet bought, self maintained' stuff. They just don't get it.
Lots of things have happened that have ultimately harmed these small communities.
A major problem is consolidation. A small town hardware store may have had access to multiple suppliers at one point. Those all merged together and ultimately started raising their prices in a "go away" sense to small time purchasers. That's made it incredibly hard to be a store. A big box store gets a lot more foot traffic and has more leverage against distributers which allows them to ultimately outprice a small time store.
My hometown went through this. As a kid, it had a restaurant, a grocery store, a hardware store, and an automobile repair shop. 1 by 1 those all died. The restaurant died because the community never ate there. It became a thing where you'd literally call the owner the night before so they could prepare you a meal the next day. Otherwise they had no traffic. They were too expensive for my small town so nobody would buy a lunch there. The grocery store and hardware store died from being priced out. At one point, just to keep the shelves stocked the owner literally had to buy products from Walmart to sell at the store. No distributor would sell to them.
I think to tease out the core of the problem with large businesses, capital, and society (esp. as regards the dissolution of small businesses), you need to autopsy the concepts of value and liquidity.
Money is meant to be a store of value, 'value' in this case being literally anyone considers valuable. However, it's an abstraction that doesn't quite fit over the thing it attempts to abstract - it really only captures that value if the value is something that is easy to transact. You might value a good conversation with your local grocer, or the smile you get when you pass someone you recognize in your neighborhood, but those things are left out of the money equation. Things the abstraction captures well - transactions of goods, legal representation, contracts, and lobbyists - are all of a particular stripe. Many of these are related to a projection of will; the ability to make things happen the way you want in spite of potentially mitigating factors.
One of the things that money allows is exploitation. Because of the delta between actual value and the abstraction of value, one is capable of strategically manouvering such that they capture more of the abstraction than a straight value:value transaction would warrant. This is compounded when you get tricky with laws and litigation and contracts - hard edges in the problem space become anvils you can use to hammer things to a shape that you like. Cynical strategies are quite successful here.
It is my belief that due to the recursively self-reinforcing nature of this system, it is bound to fail eventually. Because the leaks in the abstraction of value are actually a boon to some few powerful entities, the rules that govern the abstraction will fail to change and adapt and at some point the whole system becomes too heavy to support itself. As a whole, the system will eventually eat it's way to a heart attack.
Liquidity is the velocity of this process, and thus the velocity of consumption. There are pressures and systems and factors that metabolize the effects of the flow of capital, but the higher liquidity is the more burdened those systems become. We are currently in a place where the liquidity factor is > 1, by which I mean money can be spent before it is earned and most of it is (we have something like 5-20x debt to the pool of money, depending on how you measure it). This means that those deficiencies in the abstraction are accelerated and compounded by the same amount, which translates to an equal difference between the things we actually value as humans and the things we are capable of valuing as economic units.
They dont get a choice. You really can’t operate a small store anymore. The distribution networks were all destroyed by the top-5 retailers.
Regional supermarkets are capped by this. The lack of third party distribution means they have to have their own sourcing and distribution. They can’t grow and are slowly being picked off of PE and bigger chains.
It’s even hard for restaurants. When I worked in restaurants in college in my region, we had 6 local produce distributors. Now you have Sysco, US Foods, two regionals, one of which just went PE, and the vertically integrated Chinese markets that prefer to do business within their circle.
I think we are going to have significant political unrest, and the rollup of everything will continue until that federal power is exerted against it. Otherwise, welcome to WalmartKrogerHomeDepot.
After 50 years of such choices being made it’s not suprising that it’s exponentially harder. The real question is why did Americans decide to do so en masse so many years ago.
Because if I do that, I lose my vacation and I don’t gain a local store full of people I know and trust.
Collective action problems aren’t solved by individually performing the action, and therefore the fact that people aren’t doing it doesn’t show they don’t want it.
> Collective action problems aren’t solved by individually performing the action
This is a truth that a lot of the west, particularly Americans, struggle to accept. We keep trying "the free market and individual incentives must solve all problems" over and over, and fail over and over.
Huge problems require collective action to solve. Collective action requires good coordination, strong institutions, leadership, and most importantly, the societal willingness to not always optimize for the individual's freedom/desires/expectations. None of these are currently present in America.
It's a very attractive idea. It gives you an immediate counterargument (people must prefer it this way because they're all doing it), and gives you the satisfaction of calling the other person a hypocrite (you think it's better yet you aren't doing it).
I've lost count of how many times I've had someone tell me, "If you think you should pay more taxes, you can always send the IRS some extra cash."
Any problem with externalized costs or benefits is a collective action problem. You get a benefit everyone pays for or you incur a cost which everyone pays. The individual incentive is to freeload on the resources of others. It is functionally theft.
Regulation and other government actions can solve these problems by internalizing these costs/benefits. Any solution to these problems involves collective control of individual actions, which is to say, government at some scale.
There is some irony in the people who say "taxation is theft" ignoring the theft of the commons counteracted by taxation and the government services it supports.
You think you have a choice to buy local. It's more complicated than that.
"Local stores full of people you know and trust" is what advertising tries to approximate. Instead of forming lasting human bonds with shopkeepers and employees, we are informed by ads who we should patronize. And we pay, indirectly, for that service.
Private equity also takes its pound of flesh. Try hiring a local plumber. They'll always say they're locally owned and operated, which is a partial truth. But when you're charged $400 for 15 minutes of labor, remember that a lot of that revenue goes to private equity, far far away from your hamlet, whether you like it or not.
the McDonald's in our town says "locally owned and operated", same with the stores where everything (literally) is made in China. These sums up the absurdity of the phrase for me.
It's true that it's locally O&O as someone else pointed out. The McDonald's corporation just likely owns the land and collects rent and a sales royalty from the owner. This is pretty standard and honestly, seems to me to be much more human than the big box retail business model where there is no local ownership of any kind.
Side note: Grocery Outlet if you're in the places they operate, is a completely franchised grocery store chain. In my experience in multiple towns, the local owners do a great job, and one near me donates to some excellent local charities.
The franchise is either locally owned and operated, or it's a corporation-owned store. McDonald's doesn't permit owner-investors as franchisees, only owner-operators (at least that was the case last I knew).
1) the American cult of self-reliance. The idea that people will not value something they did not themselves work for, even if its given to them by a close friend or family member, is basically synonymous with "the American dream". "Socialism" is so bad to Americans that they would rather have diabetics die because they can't afford the lifesaving medicine they need, than to give handouts to such people, just for them to develop a "dependency". There's even an entire health-influencer industry built around the idea that all health problems not directly caused by trauma are because the person suffering just isn't trying hard enough to be healthy, and not, you know, because of a social and economic system that's actively corrosive to human health. "You're sick because you're too lazy to avoid trans-fats" basically the gist of RFK Jr's ideology.
2) Americans are so opposed to thinking more than 3 months ahead that all they see with that 20% price increase is the impact it has on them right now. The easy access to instant gratification is steadily eroding our ability to be patient or suffer any hardship. This has been growing for a long time (c.f. fresh fruits and vegetables of all stripes, year round) but has reached a sort of fever pitch with the advent of same-day delivery for a vast array of bits and baubles.
Forgoing luxuries like a vacation to support local stores full of people you know and trust, that might charge 20% more for the same product, seems like an obvious thing…
That almost no Americans do in reality.