Rarely do I snag anything from The New York Times or The Wall Street Journal as an entree into an essay on Adam Smith, Esq. (not because there’s anything the least wrong with them, but because I figure you’ve probably already seen it), but rules are made to have exceptions, so today I invite your attention to The Myth of Main Street, published in print yesterday in The Times’ “Sunday Review” opinion section. The author is one Louis Hyman (a name new to me), listed as an “economic historian”—an excellent start—and director of the Institute for Workplace Studies at the ILR School at Cornell.
What is “the myth of Main Street?” In Mr. Hyman’s recounting:
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 of having control over your life. It’s everything, in short, that seems threatened by global capitalism and cosmopolitan elites in big cities and fancy suburbs.
Mr. Hyman’s hook for his article is obviously—he says so—President Trump’s refrain of “making America great again,” which can without fear of contradiction be deemed to embrace “making Main Street great again.” (Yesterday, today, and always, ASE is resolutely nonpartisan and apolitical; my, and Mr. Hyman’s, recitation of our President’s slogan is fact not opinion, description not critique, and positive not normative economics.)
But is our idealized view of Main Street even feasible any more? Can we go back to a “great” Main Street again?
Certainly Americans have embraced this sentiment since the founding of the republic—it goes back to the agrarian Jeffersonians vs. the urban Hamiltonians (three guesses who my preferred Founding Father is on that score)—and has a durable pedigree running more or less on through Andrew Jackson, William Jennings Bryan, the widespread enactment of “fair trade” laws in the 1930’s (prohibiting retailers from discounting products and therefore stymieing the “low price” appeal of chain stores like A&P and Woolworth’s).
Despite all the dikes erected and obstacles put in the way of large, national companies, their inherent economic logic became irresistible. Shoppers gravitated to lower prices and wider selection—to Sears, Roebuck and then to A&P and Woolworth’s and then to Walmart and today, by all indications, to online in general and Amazon in particular. The data on this last point is indisputable: According to the WSJ, the S&P Retail Select Industry index is down 9.5% over the past year, versus a 14% gain for the S&P 500. Americans are voting with their wallets, as they always have, and as much as we might idealize a quaint, kinder and gentler past, we by and large prefer not to pay for it.
There are some exceptions:
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. (emphasis mine)
The flip side of the demand for cutesy and iconoclastic stores and restaurants is the demand for the people who worked there, and who worked on the farms, in the factories, and in the mining operations surrounding them: It has plummeted.
And the people inhabiting the tony enclaves Mr. Hyman cites have their own views on how to solve this as well, which, like their preference for boutique-y neighborhoods that come with a price, is not actually populist: It’s elitist. Many of the most well-meaning people assume, or actively promote, the notion that good jobs are reserved only for those who went to college, so it must be college for all, preferably with majors in science/technology/engineering/ math (STEM) or, better yet, computer programming. This is not only insanely impractical—it’s that on its face—but condescending and insulting, tantamount to the view that unless you’re like us you’re damaged goods.
So what’s the answer? And what on earth does all this have to do with Law Land?
Boiled down, The Myth of Main Street makes, to me, these points:
- While Main Street was once “a viable engine of economic growth,” it has not been for some time.
- Yearning to preserve an inferior economic model requires turning one’s back on the global economy and, perhaps even more delusional, sailing into the teeth of customer preferences to the contrary (lower prices, convenience, consistent quality and consistent experiences as a buyer).
- And Mr. Hyman’s prescription for the un- and under-employed Americans in small towns and rural areas is worth attending to: In short, it’s to exploit the very skills you already have through global platforms available 24/7 offering marketplaces for what you can do.
And making the connection to Law Land even more pointed:
- If clients seem to be less and less wedded to what we’ve been selling for a century and more—at least for the prices we’ve been commanding— the answer can’t be to behave as if there’s something wrong with the clients;
- And while we may all yearn for the DUMBO Brooklyn neighborhood’s quirkiness or the je ne sais quoi of Ann Arbor, Berkeley, and Palo Alto, that’s no more helpful in the end than staking our firms’ futures on the tiny sliver of super-high-end, truly price-insensitive work. Cute. And good luck with that as a sustainable marketplace strategy.
Finally: To me, this is anything but a counsel of despair.
This is a counsel of opportunity. Mr. Hyman’s story, which I’m using as an illustrative fable, is a call to make the most of what we have, and we have a lot: A lot of intelligence, talent, domain expertise, thick and rich networks of contacts, experience and resources. Don’t waste them on trying to fight history. It hasn’t worked out very well for Mom & Pop pharmacy, for King Coal, or for Sears or A&P.