If you have some time and are looking something to distract you from CSPAN, a new edition of The Concise Encyclopedia of Economics is up.
A few notable entries:
- Labor Unions by Morgan Reynolds
- Fascism by Sheldon Richman
- Free Market by Murray Rothbard
- Government Growth by Robert Higgs
- Rent Control by Walter Block
My favorite one (not to disparage the other entries) is Japan by Benjamin Powell. Not only does it provide an factoid-filled update to “What happened to Japan?” (also one of my favorite DA’s) but provides an illustration of how artificial interest rates, government-sponsored bailouts and faux stimuli create a huge train wreck.
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I would argue that mom and pop shops are more likely to thrive than not without government-ran transportation and roads.
The fixed costs of putting the interstate highway system together are so exhaustive and prohibitive, that when Uncle Sam finally got around to it, it ended up subsidizing Wal-Mart more than it did aide in the commoner’s transport.
So, I’m all for mom and pop shops, and they would absolutely survive in a true Misesian society.
Indeed.
I agree with what William Anderson wrote in his article, in that a mom-and-pop store cannot work on the same productive plane as a large-scale manufacturer. A mom-and-pop store that attempts to compete with a big-box store solely on price is not long for the marketplace.
However, I think Tom has a point. The strength of mom-and-pop stores is that they can add value that big-box stores cannot.
Employees of big-box stores tend to be younger workers (think high school or college students) who view their employment as a short-term commitment, not a long-term commitment. Thus, they tend to be disinterested in the overall long-term success or failure of the parent company, because they do not have a personal stake in said success or failure. They also tend to demonstrate poor company loyalty. For those reasons, upper management of big-box stores tends to view the rank-and-file employees as interchangeable parts. In short, the rank-and-file employees tend not to be committed to the big-box company, and the big-box company tends not to be committed to the rank-and-file employees.
Unlike the employees of big-box stores, however, the proprietors of mom-and-pop stores have an acute interest in the survival of their store. Thus, they not only tend to have greater expertise than the employees of big-box stores, but they tend to posses a higher commitment to customer service and customer satisfaction.
As a personal example, I play ice hockey. I buy all my equipment from a small mom-and-pop hockey store. I pay a price premium for this, as I could get better prices if I went to a big-box sporting goods store. However, the proprietors of the mom-and-pop hockey store offer a superior level of service and expertise as contrasted to the big-box score. This is an intangible service; it won’t be reflected on any balance sheet, no matter how closely an economist looks. But it is a service nonetheless, and it adds value—value for which I am willing to pay a price premium.
So, in summary, I think the degree to which mom-and-pop stores can thrive in the face of competition from big-box stores will depend on how much value they can add to their products, and the price premium that consumers are willing to pay for that value.
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