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This is one of the most important articles you can read this year.
This is one of the most important articles you can read this year.
The Myth of Main Street
Don’t listen to President Trump. Going back to the good old days will cost us
The frustrations that fuel the nostalgia for Main Street are understandable — and longstanding. 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 18th century to the agrarian populists in the late 19th 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.
- This nostalgia, like the frustration that underlies it, has a long and instructive history. Years before deindustrialization, years before Nafta, Americans were yearning for a Main Street that never quite existed.
For a few decades in the 19th 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, buying in volume, could offer low prices that local shops couldn’t match. National manufacturers, through chain stores, delivered goods that were cheaper than ever before. Small-town manufacturing and retail looked like a thing of the past.
A political uproar ensued. The fight to save Main Street, then as now, was less about the price of goods gained than the cost of autonomy lost. Perhaps the most passionate defender of Main Street was William K. Henderson, the owner and operator of the radio station KWKH in Shreveport, La., and a forerunner of political personalities like Rush Limbaugh. He inveighed against the “ruinous and devastating effect of sending the profits out of our local communities to a common center, Wall Street.” Chain stores, he warned parents, closed the “door of opportunity” for their children, who might otherwise grow up to become “prosperous business leaders.”
DAVID OPDYKE
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. These laws permitted manufacturers to dictate prices for their products in a state (which is where that now-meaningless phrase “manufacturer’s suggested retail price” comes from); if a manufacturer had a price agreement with even one retailer in a state, other stores in the state could not discount that product. As a result, chain stores could no longer demand a lower price from manufacturers, despite buying in higher volumes.
These laws allowed Main Street shops to somewhat compete with chain stores, and kept prices (and profits) higher than a truly free market would have allowed. At the same time, workers, empowered by the National Labor Relations Act of 1935, organized the A. & P. and other chain stores, as well as these buttressed Main Street manufacturers, so that they also got a share of the profits. Main Street — its owners and its workers — was kept afloat, but at a cost to consumers, for whom prices remained high.
But this world was unsustainable. It unraveled in the 1960s and 1970s, as fair trade laws were repealed, manufacturers discovered overseas suppliers and unions came undone. On Main Street, prices came down for shoppers, but at the same time, so did wage growth. 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 nonfranchised 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 possible only when people are willing and able to pay to do so.
In hard-pressed rural communities and small towns, that isn’t an option. This is why the nostalgia for Main Street is so harmful: It raises false hopes, which when dashed fuel anger and despair. President Trump’s promises notwithstanding, there is no going back to an economic arrangement whose foundations were so shaky. In the long run, American capitalism cannot remain isolated from the global economy. To do so would be not only stultifying for Americans, but also perilous for the rest of the world’s economic growth, with all the attendant political dangers. The only choice is turning to the future.
DAVID OPDYKE
Also harmful, however, is the complacent and naïve expectation, often found among well-meaning liberals, that everyone, to have a good job, needs to go to college, preferably to learn computer programming (or some other skill in manipulating information) and ideally to move to New York City or San Francisco. If the answer to rural downward mobility is to turn everyone into software engineers, there is no hope. The idea that every truck driver or coal miner can, or should, become a member of the modern professional class is closely related to the belief that unless you have those particular skills, you have no value — which isn’t the case.
Many rural Americans, sadly, don’t realize how valuable they already are or what opportunities presently exist for them. It’s true that the digital economy, centered in a few high-tech cities, has left Main Street America behind. But it does not need to be this way. Today, for the first time, thanks to the internet, small-town America can pull back money from Wall Street (and big cities more generally). Through global freelancing platforms like Upwork, for example, rural and small-town Americans can find jobs anywhere in world, using abilities and talents they already have. A receptionist can welcome office visitors in San Francisco from her home in New York’s Finger Lakes. Through an e-commerce website like Etsy, an Appalachian woodworker can create custom pieces and sell them anywhere in the world.
Americans, regardless of education or geographical location, have marketable skills in the global economy: They speak English and understand the nuances of communicating with Americans — something that cannot be easily shipped overseas. The United States remains the largest consumer market in the world, and Americans can (and some already do) sell these services abroad.
Connecting Americans who live and work in small towns with these kinds of digital platforms is not simply a matter of giving them internet access, as with the new “Broadband for All” initiative of Gov. Andrew M. Cuomo of New York (though that is a step in the right direction). We also need programs to support that transition. Right now we are too fixated on “upskilling” coal miners into data miners. We should instead be showing people how to get work via digital platforms with their existing skills.
The reality of global economics means that Main Street is a place of nostalgia, but again, that has long been the case. What’s novel is that today, the underlying values of Main Street — living and working with autonomy in your own small community — can be attained, as long as you are willing to find that work online.
John Solak may think that renaming Binghamton’s Main Street will make his city “great again.” What will actually make Binghamton great is connecting its people to the rest of the world. The solution is not to stop the global market, but to help those left out of it find their way from Main Street to the mainstream.
