From Main Street to Mall: The Rise and Fall of the American Department Store

Published by EH.Net (January 2016)

Vicki Howard, From Main Street to Mall: The Rise and Fall of the American Department Store. Philadelphia: University of Pennsylvania Press, 2015. v + 295 pp. $35 (cloth), ISBN: 978-0-8122-4728-2.

Reviewed for EH.Net by Art Carden, Department of Economics, Finance and Quantitative Analysis, Samford University.

Vicki Howard’s From Main Street to Mall contributes to the growing literature on the theory and history of American retail. She argues that the demise of downtown department stores and the rise of the Walmart economy was “contingent” on political and cultural changes rather than an “inevitable” next step in the industry. It echoes some of the themes that appear in Nelson Lichtenstein’s The Retail Revolution and Bethany Moreton’s To Serve God and Wal-Mart, and it suffers from the same disappointing problems.

Throughout, Howard assumes but does not show that we have lost something important because central business districts are no longer anchored by locally-owned or regional department stores. While she discusses the role of highway construction, tax policies that encouraged home ownership, and federal urban renewal projects, she attributes the rise of discount stores since the early 1960s to “neoliberalism” and its commitment to private property rights, free markets, and free trade — and she insinuates that this was a Faustian bargain: “The neoliberal political and economic practices . . . led to unprecedented income inequalities and immense concentration of corporate power” (p. 6). She goes on to inform us that some people are “even controlling entire sectors as in the case of retail and the Walton family” (p. 8). To the detriment of her overall argument, the book’s tone suggests statements like these aren’t meant as hyperbole.

The story is best (and most interesting) when Howard is exploring the political economy of retail. She ably documents a depressingly familiar pattern: incumbents turn to government in response to entrants threatening the status quo — even in spite of previous alleged commitments to free enterprise. It happened in the early twentieth century with the chains. It happened again in the late twentieth century: “As discounters gained market share and continued to flout convention, the National Retail Merchants Association bypassed its typical antigovernment stance to advocate for blue laws prohibiting Sunday selling of nonessentials” (p. 182). While she focuses on the role of the state, her story would have been much stronger had she spent more time discussing political actors’ incentives and the broader intellectual context in which bills like the Wright-Patman Act, the McGuire Act, and others were passed. Where she attributes the rise of discounters to neoliberalism, it would have been very useful to see this contrasted against the anti-liberalism of the New Deal, World War II, and the postwar era in which so many intellectuals and policymakers embraced varieties of macroeconomic management and central planning.

The book’s greatest weakness by far is its failure to engage with the last fifteen years or so of scholarship on Walmart. Howard claims on page 173 that “By the end of the twentieth century Wal-Mart’s unjust labor practices (emphasis mine) would be well known” and on page 204 that Wal-Mart’s success has brought “lower prices, but at a high cost for American society.” In a note to a claim on page 7, she writes “Numerous economic studies document the negative impact of Wal-Mart on local businesses” (p. 224), citing a 2013 paper in Social Science Quarterly, some of the original Walmart studies papers by Kenneth E. Stone, and a 1999 Journal of Marketing paper that provides “the counterargument,” but she does not engage any of the work by Emek Basker, David Neumark, David Matsa, Thomas Holmes, Russell Sobel and Andrea Dean, Michael Hicks, Stephan Goetz, Arin Dube, Charles Courtemanche and myself, or the many economists at the Census Bureau who have worked with the Longitudinal Business Database to tell a more complete story. We learn that Walmart was hit with the largest gender discrimination class action lawsuit in history and we learn that the Supreme Court found in Walmart’s favor. Might this not count as evidence against the “unjust labor practices” thesis?

Most importantly, Howard does not acknowledge that there might be very good reasons downtown department stores gave way to discounters. Yes, housing policy and highways mattered, to say nothing of the diffusion of big cars that can carry a lot of goods from the supermarket or superstore to big houses with big pantries and big fridges. It’s also true that obligatory price maintenance likely would have made it harder for discounters to expand the way they did. Ultimately, however, we have to give a nod to revealed preference: even though downtown department store shopping was a feasible option, people voted with their money for suburban malls and discounters. Why we should lament that choice remains unclear.

Art Carden’s publication include “Competing with Costco and Sam’s Club: Warehouse Club Entry and Grocery Prices,” Southern Economic Journal (with Charles Courtemanche) 2014; and “The Political Economy of the Reconstruction-Era Race Riots,” Public Choice (with Christopher Coyne) 2013.

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