Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses
© 2006 Stacy Mitchell
Growing up in Selma, I was aware of two different ‘cities’: one was a coherent downtown core that consisted of attractive if decaying and inactive buildings; the other was a twelve-mile stretch of parking lots, boxes, and neon signs running north of the city proper. We went downtown for the library and courthouse; we went down Highland Avenue for everything else. Millions of towns across the United States, but especially in the Southeast, have a similar brokenness. They were broken by shining lights, promises of jobs and prosperity, and the lie that this kind of ‘progress’ is inevitable. Big-Box Swindle exposes the seeming triumph of corporate colonialism not as an inevitable result of market economics, but a product of tax and zoning policies pitted against widespread public apathy. In Swindle, Stacy Mitchell argues that accepting and promoting big-box development is economically self-defeating, and shares the stories of citizens who have taken action to push back. While unashamedly hostile toward the chain stores, it invites political interest from across the spectrum — whether from progressives, who fear depressed wages, libertarians who object to the public’s money being handed over to private corporations, and conservatives who see the big-box bulldozers as a threat to community life.
Although the first chain stores appeared in the late 19th century, it wasn’t until the federal government began taking a heavy interest in playing with development and transportation that they really took off. From the very beginning, big boxes were supported by big government — and not just in expected ways. To be sure, when Uncle Sam built interstates out into the country and fixed mortgage practices so that loans inside cities were depressed, and loans outside the city proper encouraged, they benefited — but that’s been covered by all kinds of books, especially Suburban Nation. Another practice that Mitchell shares is that of the government allowing developers to write off forty years of building depreciation in only seven to ten years. This urged developers to throw up sites, and abandon them once the tax write-off was no longer available. (This is presumably one reason why Wal-Mart stores have a planned life cycle of sixteen years.) Developers enjoyed (and enjoy) a banquet of political favor: cities buy land for them and sell it to them on the cheap, or better yet seize it under eminent domain and turn it over to development; most states allow large companies to play tax games with subsidiaries and holding companies, the kind that mean annual tax bills under $300. And for all that help, these boxes are still propped up by public tax subsidies and infrastructure — roads, power, and water — that stress city budgets to the point of bankruptcy, especially when the chains move on and leave a vast parking lot whose wastewater still has to be corralled and treated.
Why did cities do this to themselves? Mitchell argues that most of the reasons offered rarely stand up to scrutiny. The chains’ prices aren’t particularly lower than their competition, at least not after they’ve established themselves. At the outset prices are low, mostly to build a customer base. What is lower are wages, because these stores experience high employee turnover and have zero interest in investing in them. Because independent stores operate on a margin, even losing 10% of their business is enough to send them reeling into bankruptcy. What’s worse, because the chains are part of a national network, they don’t bother integrating themselves into the local economy. They’re not buying products from local factories, using local ad agencies, law firms, and banks. Home Office handles that. They don’t even provide jobs, so much as claim existing ones — just as they claim the existing demand for their wares. People’s communities become nothing more than dots on a map to be conquered by a national strategy: Wal-Mart, for instance, likes to saturate an area with stores and then close redundant ones once it has become the apex.
Mitchell’s concern isn’t merely with the local economy and the private use of public money; she has a passionate interest in the communal welfare of people, of the ties that bind us to our neighbors and enrich our lives. Independently owned businesses and their employees are invested in the local community; their taxes support the services, and if their parking lot poisons the water, their owner’s kids are drinking it. At times, she borders on the romantic, bringing to mind You’ve Got Mail: the small business owners love their customers and carefully choose what they might offer, and have long heartfelt conversations with everyone. The box stores leave you to read labels by yourself, and if you’re not buying then get out already. Mitchell’s overt hostility toward the chains means they can do nothing right: at one point, she scolds Wal-Mart for being discriminatory about its stock, choosing not to carry gangsta rap cds; several pages later she gripes against Blockbuster for not discriminating, and carrying dozens of copies of the latest Hollywood production regardless of its quality, while offering only a few copies of an independent film. Well, dear author, should they be picky about what they stock, or shouldn’t they?
Big Box Swindle offers a lot of room for thought, and I approached it with caution. I knew I would be predisposed to agree with the author on some points, being a locally-oriented person, but that same small-is-beautiful stance also made me wary what she might declare as the solution: federal legislation. They’re the ones who helped create the problem, so my suspicion is that corporations will happily co-opt whatever legislation comes down the pike. D.C. is their city, not the people’s. Happily, however, she doesn’t. Oh, she mentions D.C. as a redoubt against the worst of corporate abuses, but the ‘solutions’ third of her book is almost wholly citizen-politics. There she recounts people organizing to protect their communities against outside colonization, either by changing zoning and tax laws to discourage big-box development, or by banding together in business cooperatives to compete with the boxes’ economy of scale. The closest she comes to urging for national legislation is calling for the states to work together to close off certain tax loopholes. The focus on local activism means a true empowerment of local communities — of people becoming the primary actors within their own lives, and not just content to let some bull-in-a-china-shop federal agency try to do it for them.
- The Strong Towns organization, the founder of which (Chuck Marohn) has illustrated that low-density auto-oriented development, the home field of big boxes, is a tax sinkhole.
- The Small-Mart Revolution, Michael Shuman
- The Wal-Mart Effect, Chates Fishman
- Cheap: The High Cost of Discount Culture, Ellen Shell
I don't know about such assaults upon big-box stores and big-business. I am old enough to remember mom-and-pop stores of all varieties and a few chain-stores (five-and-dimes; department stores; clothing stores etc.) prior to the era of Walmart, Home Depot, Staples, etc. The better pricing and availability of product in 2016 trumps (no pun intended) the 1940s and 1950s. Nevertheless, even with my anecdotal bias on the issue, I appreciate your posting/review, and I am open-minded enough to track down the book, read it, and reassess my POV. Thanks!
Internet commerce would have changed things regardless, but I think most everyone can agree that private businesses should not receive public funds. Even if a city council wants to 'lure in' new businesses, it is wholly inappropriate to fund new competition with the income of existing business owners.