Tucker Carlson is wrong about “libertarian economics”
Tucker Carlson has spent years making himself the mouthpiece of Trumpism. The highly-protectionist, highly-nationalistic offshoot of conservatism claims to be small-government, but loves to use the power of government as a cudgel to suit its own ends, especially in rewarding loyalists and punishing enemies.
While Carlson has been exiled from his nightly show on Fox News — where his nightly monologues were marching orders for the MAGA crowd — he still remains relevant in Trumpist circles.
And that’s why one raised an eye when he spoke of “libertarian economics” being a failure in a recent appearance with Glenn Greenwald. Typically, conservatives felt a symboisis with libertarians on economic matters, as both generally believed in limited government and free markets in economic matters.
Carlson referred to “libertarian economics” — e.g., free markets free of heavy-handed government intervention and central planning — a “scam.” And his reasoning for it?
“Does this economic system produce a lot of dollar stores? And if it does, it’s not a system you want, because it degrades people and it makes their lives worse and it increases exponentially the amount of ugliness in society … So, if it’s such a good system, why do we have all these dollar stores?”
First off, dollar stores are prevalent, but that is not necessarily a bad thing. They fit a small footprint and provide inexpensive goods and services to a community. In addition to retail corridors in suburban areas and urban fringes where they are often overshadowed by the myriad other options, dollar stores tend to be very visible in two places— very rural areas and low-income urban communities.
Drive through any rural community, and it’s almost certain you’re going to find one of the nation’s 19,000 Dollar General stores. But to consider Dollar General’s presence a bad thing requires some significant mental gymnstics and an orientation toward central planning.
The assumption that dollar stores are harmful to a community usually comes from the “monopoly” mindset parroted by many progressives and others since Ida Tarbell wrote about it more than a century ago. Essentially, the belief is that sellers who offer low prices to consumers have an unfair advantage, and thus strong-arm all their competitors out of business until there are no competitors left. Armed with a monopoly, they jack up prices and don’t worry about consumers because those consumers have no other choices.
That belief assumes all pre-existing businesses have a right to be free from competition, and that low prices are inherently bad because they prevent competition, even if they benefit consumers, because they will harm those consumers in the long run. And thus, government needs to step in and dictate what retailers or firms are allowed to operate and how — including, as FDR’s National Recovery Administration attempted to do — setting prices to promote “fair competition.”
I often ask people who proffer the Ida Tarbell-influenced “monopoly” theory “show me one example of this happening.”
They can’t. They might mutter something about a Home Depot or a Walmart coming to town and an old hardware store closing, but the Home Depot or Walmart doesn’t have a monopoly. Each has several competitors, frequently including local hardware stores. The key is, those stores have found a way to stay alive against larger competitors who might be able to offer better prices, often by providing a more convenient location, a better overall product or better customer service. But monopoly doesn’t form.
Those with the “monopoly” thesis assume the presence of a Dollar General prevents other businesses from forming and serving the community, such as a local grocer, because of its low prices and, well, the fact that it exists.
But what I’ve experienced in suburban and rural Indiana communities or from visiting mountain communities in Kentucky and Tennessee is that where a new Dollar General has opened, it has not replaced existing retail, but it is serving a community that had no other options. It is providing a service that nobody else was willing to provide, and doing so at pro-consumer prices.
Because of the small footprint of a store and the limited inventory compared to a big-box store, a dollar store can have a lower overhead and thus profitably serve a smaller community than a supermarket or big-box store can, and its size provides economies of scale that allows it to have a wider selection of goods than a local retailer can offer. So there are no big-box stores, no local grocers and retailers to compete with. The dollar store is filling a void, not replacing existing businesses or hypothetical new ones.
The counterargument to that is “Dollar General’s existence prevents someone else from coming in.” But if there had been a market for someone else, they’d have come in, with or without a dollar store being there. It’s not preventing anyone from coming into a market — it’s often serving an underserved market. That’s often true for both the rural and urban communities dollar stores serve — and are often criticized for doing so — where they can provide the convenience of having a close-by retailer for a few things and complement the grocery stores and big-box stores that may be farther away and thus are only visited once every week or two.
In suburban areas where dollar stores operate, they exist alongside the Walmarts and Targets and even each other — near my home, Dollar General, Dollar Tree and Five Below all exist within two miles of each other, but so do Walmart, Target, Meijer and multiple specialty stores. Nobody has strong-armed anyone out of business. They all offer enough goods to serve enough customers to profitably coexist.
In either case, every retailer is a contributor, not a parasite.
The second problem with that mindset is it comes from a central planning orientation. Every time a new store opens in a community — especially if it’s a chain — there are cries from locals saying “we don’t NEED another (fill in the blank)” and “why did the government allow this?” (or worse, “why did the government build this?”)
Again, there’s a belief that the existence of one store prevents others from serving a community, but that also comes from a belief that local governments get to choose which retailers can and cannot serve a community, and retailers exist on their benevolence.
In reality, while there unfortunately is some cronyism with TIFs and tax abatements, consumers ultimately choose who serves a community. If the market exists, retailers will see a community attractive. If it doesn’t, they won’t. And often, Dollar General and its cousins can serve smaller markets than many other retailers. However, the consumer holds the ultimate key. Nobody is forcing one to shop at Dollar General or Walmart or any other retailer. I, personally, rarely shop at either. But I don’t begrudge others who do, and I’m glad we have a lot of options as consumers.
The other issue with Carlson’s argument is the assertion that dollar stores “degrade people” and promote “ugliness” in society.
When I have shopped in a few dollar stores over the years. I, along with the other consumers there, know what I’m getting. I’m not there to get fresh groceries or the highest-quality merchandise, but I’m getting something useful that won’t break the bank. It’s a good option to have.
I certainly have never thought, as I’m standing at Dollar General’s checkout buying a toy or a game or a chocolate bar, “my humanity is degraded because I had the option to buy cheap goods and not have to deal with crowds at the only store that sees this community as worthwhile to do business in.”
In fact, it’s quite the opposite.
Residents in far-flung and underserved communities are happy someone is willing to open up shop there and happy they don’t have to drive as far — or pay as much — for a shopping run. It’s not unusual to see a dollar store in a previously-abandoned storefront, thus providing something where a rotting eyesore was previously.
No, the stores are not architectural marvels. Neither are most suburban stores, whether stand-alone or strip centers.
But they are practical. We can have a balance between beauty and practicality. Not every store has to be a ground-floor mom-and-pop underneath three floors of apartments, especially in rural and suburban communities that have little demand for multifamily housing and thus no need for 3-over-1s. A parking lot and a small store are perfectly functional.
Market economies do allow for dollar stores. But they also allow for big-box stores, for retailers like Amazon and its competitors that allow me to do my Christmas shopping from my living room, boutique and high-end retailers, restaurants from McDonald’s to five-star sit-down local establishments, and everything in-between. Markets provide things we love, and some things we may not love but others may.
That’s the beauty of a market, and of decentralized decision-making. There’s something for everyone. It’s truly democratic in a way top-down centrally-planned systems cannot be. Central planners claim their system is democratic because they serve 50.1% of a sliver of the population. But markets are truly democratic, because they serve the wishes of the majority, but they serve the wishes of the minority at the same time, giving us all the opportunity to vote with our feet and our dollars and patronize that which benefits us. We engage in mutual exchange that benefits the seller, too, which benefits our communities as a whole.
So no, Tucker, stores that sell cheap goods to underserved markets is not an example of failure. It’s a sign of success, of how markets work to serve everyone, especially those who would be forgotten by central planners.