The Myth of Main Street

Louis Hyman “The Myth Of Main Street,”  NYT 4/9/17 Opinion section (this is not a book)

The following narrative was taken from the The Myth of Main Street and is only a portion of that document.  The author is an economist at Cornell.

Throughout the Rust Belt and much of rural America, the image of Main Street most think of is one of empty storefronts and abandoned buildings interspersed with fast-food franchises, only a short drive from Walmart.

Main Street is a place but it is also an idea.  It’s small town retail.  It’s locally owned shops selling products to hardworking townspeople.  It’s neighbors with dependable blue collar jobs in auto plants and coal mines.  It’s a feeling of community and control over your life.  It’s everything, in short, that seems threatened by global capitalism and cosmopolitan elites in big cities and fancy suburbs.

From the beginning of our country’s history, rural and small-town Americans have been on the losing side of a rising market economy.   You can draw a straight line from the Jeffersonians in the late 18^th century to Mr. Trump’s voters, all of whom have felt that the city hornswoggled the country.  The rage that arose in the 1880s, as rural incomes fell and farm mortgages defaulted while city bankers got rich, does not feel so distant today. 

But nostalgia for Main Street is misplaced—and costly.  Small stores are inefficient.  Local manufacturers, lacking access to economies of scale, usually are inefficient as well.  To live in that kind of world is expensive. 

For a few decades in the 19^th century, Main Street store owners were a viable engine of American economic growth, selling to local residents and people in surrounding rural areas.  But that hasn’t been the case ever since.  In the 1920s, a new and more efficient kind of retail emerged, the chain store, which sealed Main Street’s decline.  Main Street retailers had been under assault for decades from national mail-order catalogs like Sears, Roebuck, but it was the chain store typified by A&P. and Woolworth’s that vanquished small-town commerce.  These stores could buy at volume.  To save Main Street, state lawmakers in the 1930s passed ‘fair trade’ legislation that set floors for retail prices, protecting small-town manufacturers and retailers from big business’s economies of scale.  If a manufacturer had a price agreement with even one retailer in a state, other stores in the state could not discount that product.  These laws allowed Main Street shops to somewhat compete with chain stores and kept prices higher than a truly free market would have allowed. 

But this world was unsustainable.  It unraveled in the 1960s and 1970s, as fair trade laws were repealed, Manufacturers discovered over-seas suppliers and unions came undone.  Main Street was officially dead.

It’s worth noting that the idealized Main Street is not a myth in some parts of America today.  It exists, but only as a luxury consumer experience.  Main Streets of small, independent boutiques and non-franchised restaurants can be found in affluent college towns, in gentrified neighborhoods in Brooklyn and San Francisco, in tony suburbs—in any place where people have ample disposable income.  Main Street requires shoppers who don’t really care about low prices.  The dream of Main Street may be populist, but the reality is elitist.  ‘Keep it local’ campaigns are only successful when people are willing and able to pay to do so.