Some people have observed that the purchase impacts the nascent grocery delivery sector more than the established supermarkets. That was my first thought. For me Saturday used to involve a trip to Whole Foods. But not anymore. Basically I use Instacart. (I can’t use Amazon Fresh because it doesn’t delivery to where I live. For now….)
Because Amazon is such a monster of a company people are talking about grocery stores as the underdog in this new war. But the reality is that what we think of “grocery store” is something far different from what someone in 1900 would have imagined. Americans today assume that the supermarket is synonymous with groceries. But supermarkets as institutions are economic innovations which date to the 20th century. The rise of the sector by showcasing its pioneering firm is detailed in The Great A&P and the Struggle for Small Business in America. As the title makes clear the rise of supermarkets resulted in a massive creative destruction in the American economy and culture.
Before A&P reimagined the profession being a grocer was a way for working class men to have a job that could support a family and give them some independence. But as the supermarkets cannibalized small grocers, men who had run their own businesses became employees in large corporations. Entrepreneurs became clerks. Creative destruction also worked so that eventually A&P was marginalized by new-model supermarkets that catered to suburban families. Today Walmart and Whole Foods have been attacking the low and top ends of the market and squeezing out smaller players.
Walmart’s battle from the bottom-up seems to have beaten Whole Foods’ premium strategy. Amazon’s purchase makes sense since Whole Foods has some assets major it can bring to the battle, but Walmart scale just too much for them to tackle.
As we all know the retail sector is changing. Half of millennials now buy groceries online at least some of the time. Malls are closing as their anchor department stores struggle. Where would a modern day Tiffany do her tour? Obviously it’s YouTube.
But that doesn’t mean that people won’t venture out. Upscale retail plazas are replacing the role of malls. Independent bookstores are still around, while Borders is gone and Barnes & Noble is a shadow of what it was. The positive aspect of the death of bricks and mortar retail is that we spend less time out and about on errands. Rather, we go out to eat at a restaurant, or meet friends in the park or at a bar. The downside is a smaller and smaller set of firms are dominating the supply chains between producers and consumers. I think Amazon will be targeted by antitrust considerations in the 2020s.
I come not to praise or bury Max Weber. Rather, I come to commend where warranted, and dismiss where necessary.
The problem as I see it is that though a meticulous scholar, Max Weber is the father of erudite sophistry which passes as punditry. Though he was arguably a fox, his genealogy has given rise to many hedgehogs.
Weber is famous for his work on relating the Protestant ethic and capitalism (more precisely, Calvinism). In general I think Weber is less right than he is wrong on this issue. But the bigger problem is that Weber’s style of interpretative historical analysis also has spawned many inferior and positively muddled imitators, whether consciously or not.
To my mind the problems with Weber’s sweeping generalizations, interpretations, and inferences, are clearest on the topic of China. His assertions on the nature of the Chinese mind informed by Confucianism, and how it would relate to (and hinder) modern economic development are very hit or miss.
By the end of the 20th century things had changed in terms of the perception of how Confucianism might relate to capitalism. In the 1990s Paul Krugman famously argued that the East Asian economic miracle did not have to do with a particular model or cultural genius, but simply increases in capital investment and labor force participation (factor inputs). This was too stylized a fact. Though growth has slowed, I think it is undeniable that East Asian economic modernity is here to stay.
And some of that may be attributable to Confucianism in a distant causal sense, because the cultural sensibility does encourage the development of broad-based literacy through self-cultivation. In Strange Parallels Victor Lieberman notes the contrast between Vietnam, with its more Sinic cultural orientation, and the rest of Southeast Asia, with their Indic Theravada Buddhist cultures.
The Vietnamese elites’ orientation toward Confucianism meant that there was stratification in society, as there were constant upward and downward movements across class. The chasm between the Confucian literati and the peasantry was large. In contrast in Cambodia popular religion was relatively unifying due to its accessibility. But it is notable to me that Vietnam in particular is often perceived by those who travel in Southeast Asia to be an industrious and striving nation.
So yes, culture may matter. But simple economic forces, and material conditions, are incredibly important, and our understanding of their origins are more mysterious than we’d like to think.
This is on my mind because of the recent evidence of the power of the slave trade in the Islamic world. Islam gets a bad rap in relation to slavery. This is justified, as Muslim nations have been, and are, the most prominent perpetuators of institutional chattel slavery* in the modern and near-modern world. But it is also correct that in many ways de jure Islamic law gave slaves a degree of dignity and human rights which would not have been called for in Classical antiquity. Though the reality is slaves were often part of the Roman familia in many cases, ultimately they were still human tools, to be abused and disposed as one would domestic animals.
But the genetic data seem clear that African slavery increased greatly during the Islamic period, resulting in a much more human agony, as so many of the slaves died en route (males who were to be eunuchs had a high mortality rate as they had to be castrated before entering Muslim lands). This had nothing to do with the cruelty of Islam per se, but the overall development and advancement of the Eurasian oikoumene, and the role of African slave labor in its post 1000 A.D. economy.
In fact one might argue that the unity of the Islamic world, and its relatively uniform legal and cultural superstructure after the collapse of its political unity, was a factor in fostering the rise of the global slave trade. That is, Islam generated asabiya, social solidarity, within the group, but this ultimately was to the detriment of those who were outside of the group.
A similar story can be told about the New World slave trade. It flourished in the wake of the Reformation and the Renaissance, and just as European society was undergoing a cultural revolution which would usher in modernity. If one looked at the nature of European society in the 17th century, and its increasing moralism, and focus on personal piety, probity, and humanity, would we predict the expansion and scaling up of the European slave trade? No.
That dynamic was driven by economics (in the American case, the triangle trade).
Similarly, the mortality rates of slaves varied greatly by locale and the what they cultivated. The sugar islands were death traps. The rice farmers of coastal South Carolina lived relatively stable lives, even comparable to serfs. Those who grew tobacco were somewhere in the middle. All were under English jurisdiction. The mortality of Brazilian slaves was high, but nominally Roman Catholic jurisdictions were subject to more humanitarian codes. But the primary determinants of mortality, of humanity, were economic. Material, even if ideological variables had an impact on the margin (Rodney Stark has argued that the French legal system was more humanitarian in Louisiana, and one can see this in various vital statistics).
Obviously ideological and material forces interact and influence each other. My point here is to observe that too often public commentary gets caught up on the idea of the great idea driving history. But once we have some distance it is often obvious that on the proximate scale many of the patterns we see are constrained, driven, and conditioned, on material forces and parameters.
And yet ultimately those material forces through gains in productivity relax tight the pressures which constrain ideologically driven change and revolution. Slavery for example was long considered an institution that would always be with us in some form, but over the past few thousand years most societies have frowned upon it. Slave societies, whether ancient Roman or in the antebellum South, develop an unhealthy paranoia. With modern technologically driven economic growth the possibility of a post-slave economy seemed plausible, and opened the window for a practical abolition.
And here we are!
* I said “institutional chattel slavery” specifically to head off annoying nit-picking comments. Please don’t.
The headline numbers for April are terrific. The economy added 211,000 jobs in April, and the unemployment rate fell to 4.4 percent. That is not just the lowest jobless rate in a decade; it also matches the lowest level reached during the mid-2000s expansion. The last time it was lower was May 2001, 16 full years ago.
A caveat is warranted, as labor force participation of prime age works (25-54) is still a few percentage down from its 2001 peak. This is not surprising, as I take the end of work seriously as a thesis. But, I have to admit that in 2008 we’d probably be surprised that nearly a decade of very modest economic growth on a yearly basis has led us here.
I remember listening to commentators in the dark years right after the financial downtown explaining how many quarters of job growth would be needed for us to reach ~4 percent employment. It just seemed implausible to them at that time, and I have to say that I probably agreed with them on some level. But here we are.
But whenever there is exuberance about full employment and trillion dollar companies I start to wonder if perhaps we’re living before the fall. Are we going to go into a recession soon? I suspected something was off in the spring of 2007…though my pessimism in 2012 didn’t seem to pan out.
That man is Jean-Luc Mélenchon, admirer of Fidel Castro and Hugo Chávez, sworn enemy of NATO and high finance, and candidate of his own “France Unsubjugated” movement, who has been drawing tens of thousands to his rallies, especially the young, as he did here Sunday at Toulouse on the banks of the Garonne River. They came to hear a veteran French politician give them a dousing of old-fashioned Robin Hood-revolutionary rhetoric, with promises to tax the rich hard, give to the poor and start a “citizen revolution.”
There is a serious chance that this will be the next president of the French republic. This man, who has no problems being called a Communist. If there is one political system where the experiment has been done, it is command economy socialism. There may be cases of market failure where the state needs to intervene, but by and large an economy dominated by the state has not done good for the common man.
And yet the reality is what alternatives are the people being given? They are looking Left and looking Right, because they want hope that the future will have some of the promise that the past had. Sober realistic centrists with broadly liberal views only offer them only hard truths.
Truths such as this: Evidence That Robots Are Winning the Race for American Jobs. The far Left anti-capitalist program in economics really doesn’t offer a long run path to prosperity. But capitalism itself only leads to individual and broad-based prosperity as a side effect of market logic. If returns to capital could accrue without labor inputs, then that would be even “better.”
The purchase of Whole Foods by Amazon has sent grocery store stocks into tailspin. Could Amazon do to Safeway and Korger what it did to Borders and Barnes & Noble?
Because Amazon is such a monster of a company people are talking about grocery stores as the underdog in this new war. But the reality is that what we think of “grocery store” is something far different from what someone in 1900 would have imagined. Americans today assume that the supermarket is synonymous with groceries. But supermarkets as institutions are economic innovations which date to the 20th century. The rise of the sector by showcasing its pioneering firm is detailed in The Great A&P and the Struggle for Small Business in America. As the title makes clear the rise of supermarkets resulted in a massive creative destruction in the American economy and culture.
