Big State, No Shops

The loss of opportunities to buy, the fall in consumer surplus, is the difference between what people actually pay for their purchases and the maximum price they would be prepared to pay for the total amount they purchase.

It was an observed characteristic of a state-owned, state-run economy that there were not enough shops, and not enough goods in the shops that there were. People queued to buy, from immediate post-War England, to the countries of eastern Europe before 1990 and their overthrowing of realised socialism. The centrally planned provision of goods could not be made to match demand. There were not enough goods, and the goods there were were the wrong ones, produced to meet targets rather than meeting demand. They produced sewing machines, bicycles, cameras when we wanted televisions, cars, fast food. It took the overthrow of the state for people to have access to a pizza, even though these countries could land men on the moon.

Here and now, there is a queue to sell, (a sales person standing doing nothing is actually queueing), and we see queues to buy only when prices are known to have fallen temporarily during the sales season. Credit contraction has led to falling prices of the goods currently in stock, as those goods must be afforded now out of after-tax income, rather than paid for by indebtedness. As the large shops and chains that drove out small retail suppliers collapse into bankruptcy the problems of restocking will not be theirs. But the closures reduce availability of goods, (as well as reducing outlets), all the same. And small retailers are unlikely to return to fill the gaps. The impoverished consumption environment will spread more and more rapidly.

Having over 40% of income removed at source doesn't help consumer choice either. We choose what we buy with only the remains of our wages, and of necessity consume what the state offers for the rest.

Anyone who saw the the Soviet satellite states in their heyday would not wish the dreary daily round through empty shops and distant markets looking for desired or even needed goods wished on anyone on earth. Of course we are nowhere near such controlled, government- directed incompetence. But our direction of travel is towards lower levels of choice from fewer outlets that are harder to access, poorer quality as stocks are replenished using a grossly weakened pound, and an increasing standardisation of provisions. And we stopped being a nation of shopkeepers too long ago for their entrepreneurial skills to have survived within the general population.