The Colonization of Local-Business Main Street by Corporate America

An insightful correspondent recently remarked on the striking transition of American neighborhoods from commercial districts dominated by locally owned businesses to streets lined with look-alike outlets of Corporate America. This transition is so obvious that few even comment on it, much less ask if this wholesale replacement is in the best interests of residents and consumers.

I have long suggested starting any inquiry with a simple question: cui bono— to whose benefit? Let’s add a second essential question: what does the system optimize?

By this I mean: what is optimized by the infrastructure, regulations, political structure, etc.–what we call the mode of production.

I think it’s abundantly clear that our mode of production optimizes large-scale global corporations, which have access to the capital and expertise needed to optimize production, management, employee training and discipline, supply chains and the purchase of political influence.

The net result of nearly-free credit for corporations is a Corporatocracy that constantly expands its financial and political power. Governments come and go, candidates come and go, and political movements come and go, but the Corporatocracy remains at the top of the power pyramid because it can always afford to “buy” as much democracy as it needs for the state to protect its power and profits.

Our mode of production optimizes the commoditization of everything: computer chips, fish and chips, labor, expertise, everything. It’s very convenient if you have a reliable vehicle; if not, tough luck–convenience is for those with cars.

If you want a burger that’s essentially identical everywhere in the nation–i.e. a burger that has been ruthlessly commoditized–then Corporate America’s fast food chains are the place to go.

If you want a hotel room that’s identical to hundreds of other rooms, a store that has identical items and nearly identical layout no matter which outlet you enter– Corporate America’s chains are the place to go.

That this commoditization / homogenization has consequences other than low prices and convenience is not advertised. One consequence is every town and street in the country looks alike: a garish row of one corporate outpost after another.

The ugliness of this commoditized wasteland is so obvious that it’s assumed to be unavoidable.

Another consequence is entry-level commoditized jobs don’t teach new workers the wide spectrum of skills that once came with working for small businesses. Workers in Corporate America are taught the company’s system and trained to respond with genteel customer service in every interaction with customers.

How often do we hear something like “thank you for visiting Engulf and Devour” repeated semi-robotically?

Here’s another often-overlooked consequence: money flows out of the community to distant corporate headquarters, where it is distributed to obscenely wealthy managers and owners of the company’s stock.

When businesses were locally owned, all the profit and overhead generated by sales stayed in the community. What characterizes economically depressed ghettos isn’t just a lack of money–it’s the channeling of all the money in the community to distant Corporate HQs and predatory corporate chains such as payday lenders and credit card issuers (you’re going to love paying 25% interest!).

The low cost and convenience of commoditized Corporate America has high costs that we simply don’t measure: the ugliness of our shared spaces, the boring sameness of every commercial strip, the dearth of entry-level jobs outside a commoditizing corporate hierarchy, and the low property tax rates Corporate America “buys” with its immense lobbying machinery.

The low cost and convenience are presumed to make this colonization of locally owned businesses irresistible. Commoditizing everything certainly optimizes the efficient production and management of services and goods.

But how much has been lost to this wholesale colonization by globally optimized corporations? What price do we put on a diversity of locally owned businesses? What price do we put on the relative charm of a walkable street? How much property tax flows into the local government from a shuttered mall that lost its Corporate America anchor retailers?

Colonization introduces an amazing array of bargain-priced goods and services.The “natives” are happy to have access to all the goodies, but a short time later, the colonizers own the land, the markets, the politicians, the media and the labor force, and everyone who once had an independent livelihood and independent political voice is impoverished or is now an employee of the plantation, taking orders from the Big Boss.

This is what our mode of production optimizes: ugliness, debt-serfdom, and servitude to politically dominant corporations that have commoditized supply chains, marketing, the construction of outlets, the labor to operate them and the extraction of profits.

That’s how we’ve come to love our servitude–oops, I mean “low prices and convenience.”

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  • ICFubar

    All good points in this article. The small city, big town, I live in took a ‘heritage’ view of our commercial-retail base with by laws that forbid any large chain from setting up shop excepting super markets. But we do have our Food CO-OP.. There is no MacDonalds, though we do have an A&W grandfathered because it was here in the late 50s. All the shops on the main shopping streets are small businesses. We do have a separate mall that has a quite small Wal-Mart but the rest of the stores in the mall are small businesses or small chain outlets like a Coles book store. The public sees the benefit to this and we quite like it this way.

    As for the USA LLC, its “national interest” was set during the Truman administration at the close of WW II. The agenda set was for world dominance and eighty plus years later anyone believing the likes of a Trump is going to somehow upset the apple cart is either dreaming or insanely delusional. If we want different than what we are getting then we need to quit playing their rigged game.

    • diogenes

      I would be interested to hear, exactly or approximately, where your big town is. One consequence of allowing MacDonalds to open, besides the horrible food and dead-end rotten work conditions is that, with their huge backing, they are so immune to competition that they prevent it. Every MacDonalds is a local restaurant that might have been a good one, and if it wasn’t it wouldn’t last and others would try. Operations like MacDonalds is the walking dead.

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      • ICFubar

        The City of Nelson, B.C. has a population of around ten thousand in town and is situated about thirty miles north of the Canada -US border roughly directly north of Spokane Washington State. Even our hardware store, while part of a small chain, is known as Hipperson’s, no Home Depot here. Our lumber yard is a local enterprise and is likely the largest business in town, but has competition from the smallish Canadian chain Home Hardware. It is like stepping back into the sixties with I’d guess about 90% of retail businesses being small family run enterprises. Prices on some goods are a little more expensive but like in the article the money spent stays in the community, the businesses are community oriented and no one seems to think it need change in allowing the mega chains and big box operations to displace what we have.

        • diogenes

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  • diogenes

    Global corporations don’t “optimize production” — that’s their press-agents line and has been for 120 years but it was demonstrated false a long time ago. What global corporations do “optimize” is control of markets, and that’s how they pay their dividends, which are charges in excess of costs and which would not be possible in a genuinely competitive market (that’s called “cut-throat competition” by the corporate press-agents). The occupation of American local businesses by Wall Street absentee clones is a process that has been going on since the 1920s. There were several congressional investigations — e.g. of the Bread Trust — which Smith has never heard of. But, he’s never heard of most facts pertinent to what he talks about. But who needs facts when you have a party line?

    • Neil S

      You say that it was demonstrated a long time ago that global corporations don’t optimize production. Please explain or provide a link.

      • diogenes

        Places to start:

        Lewis Corey, The House of Morgan (NY, 1930) esp. 285-286

        C. Wright Mills, The Power Elite (Oxford 1956) esp. p. 124

        You will also find this issue discussed in Louis Brandeis, Other People’s Money and, at length, in Thorstein Veblen’s The Theory of Business Enterprise, The Instinct of Workmanship, The Vested Interests, and The Engineers and the Price System.

        In the larger frame, consult Odum & Barrett, Fundamentals of Ecology on the diminishing returns of scale. In all systems (and even human contrivances must still work under the constraints of physical laws, just like living organisms) there is a fundamental inexorable law of diminishing returns with increasing scale. The larger an organism or a mechanism becomes, the more energy it has to put into maintenance and coordination (supervision). The energy costs increase as a cubic function, as scale increases as a square function. The advantage of corporate bigness is in control — control of the markets in which its products are manufactured and sold, and control (by being a big buyer) over the markets in which its supplies — of materials and of labor — are purchased. There is no advantage in actual cost of production created by making bigger production facilities; past a certain point — just as with natural organisms — the curve turns downward and size is counterproductive. Notice, for instance, that Ford, or whoever, doesn’t make just one huge plant — they make dozens. Etc. And then the dozens, besides requiring their own counter-efficient mega-managerial staffs, also require the mega-mega-managerial structure on top. In this we see the ecological law in obvious action.

        I hope this helps, Neil S. The facts of the counter-eficiencies of large scale corporate production were established in the first decade of the 20th century and you should be able to dig them out if you are sufficient interested and industrious. But they are not much spoken of because the contradict that lies that the corporations tell to sell their tyrannical reign of theft — and they’ve been telling the same lies since before 1900.