George F. Will
WASHINGTON
When the president speaks of closed
factories scattered like “tombstones” across America, has he noticed the
shuttered stores in shopping centers and entire malls reduced to
rubble? He promises “protection” to prevent foreigners from “destroying”
manufacturing jobs by exporting to America things that Americans want
to import. Does he know that one American company might be “destroying”
more American jobs than China is? And that this supposed destruction is
beneficial?
The company is Amazon (market
capitalization: $388 billion), created by Jeff Bezos. He owns The
Washington Post, which syndicates this column, but it is for
revolutionizing retailing that he ranks in the Pantheon of American
business. He belongs there with Richard Warren Sears, Alvah Curtis
Roebuck and Sam Walton, all of whom were constructively disruptive
retailers and were as important in the nation's commercial history as
were Henry Ford, Steve Jobs and Bill Gates.
In 2016, online buying during the holiday
season surged 19 percent over the year before, which is one factor
explaining this: Macy's, after announcing in August that it would close
another 100 of its remaining 730 stores, now says it will shed 10,000
jobs. Sears, which is 13 decades old and still has 1,600 stores, has
lost $9 billion in five years, has closed 500 stores and is closing
another 150 (including some Kmarts).
Although e-commerce was just 8 percent of
all 2016 retail sales, it came disproportionately at the expense of
Sears, Macy's and other “anchor tenants” that draw foot traffic from
which other mall retailers benefit. When Amazon recently announced that
it is going to create 100,000 warehousing and other jobs in the next 18
months, The New York Times reported that online retailing “has destroyed
many times that number of positions at malls and shopping centers
across America.”
Writing at MarketWatch, Rex Nutting argues
that as Amazon revolutionizes consumer behavior, it “is going to destroy
more American jobs than China ever did.” If so, the “problem” is
productivity. Nutting says “Amazon needs about half as many workers to
sell $100 worth of merchandise as Macy's does.”
All of which raises a question: Why should
manufacturing jobs lost to foreign competition be privileged by
protectionist policies in ways that jobs lost to domestic competition
are not? When an Applebee's or Olive Garden, powered by a national
advertising budget, opens next to, and causes the closing of, Madge's
Diner, why does Madge not merit protection?
The reason is this: Domestic protection of
Madge and millions of others unsettled by the constant churning of a
dynamic domestic economy would mean slow economic growth — and rapid
growth of government as it regulates consumers' choices and their
consequences. But protection from imports also means this.
Macy's flagship Manhattan store was one
reason Gimbels' nearby flagship closed, after 76 years, in 1986. This,
even though in 1945 Gimbels had been America's first merchant to offer
“a fantastic, atomic era, miraculous pen.” It was a ballpoint.
Will the winner of the once-famous Macy's versus Gimbels rivalry always be with us? Probably not, which is probably good.
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