One of the few companies where profits are under management control Credit, Amazon logo

This is one of those things we’re supposed to be celebrating – but then there’s no one a conservative as a lefty in the face of change, is there? High Street shops and chains are closing across the country. This, apparently, will put retail jobs at risk.

Good, we don’t need people doing those jobs any more. They can go off and attempt to sate some other human desire or want:

Shoppers are deserting the high street in greater numbers than during the depths of the recession in 2009, creating a brutal climate that is putting thousands more retail jobs at risk.

The coming days will be crucial to the future of a handful of household names, including Mothercare and Carpetright, which are trying to persuade investors to make vital cash injections so they can jettison unwanted stores. There is also the spectre of job losses at Poundworld, the struggling discount chain, which is being cut adrift by its American owners.

As I’ve pointed out before there’s a good reason for this:

It has been said that we can see the technological revolution from computing everywhere except in the economic statistics. Yet these two failures are evidence of that very revolution. Not just Amazon, but the whole online sales revolution is changing retail. It is not a coincidence that some 12 per cent of retail sales are online today, that also some 11 or 12 per cent of physical retail space is empty. One is causing the other, to our greater benefit.

That is what is happening. The effect of which is:

We know why these two store chains went down. Their lunch has been eaten by the online retailers. Their empty stores are proof positive that the technological revolution is proceeding apace. Electronics, or toy, sales haven’t fallen in the economy as a whole. Retail sales themselves haven’t. So it’s not evidence of some general disaster happening, it’s a sectoral shift within the economy. Away from expensive retail methods of providing what we want, and towards less expensive online methods of delivery. That process is making us richer, as we still end up getting what we want and also have money and resources left over to have something else with.

Most importantly, the labour of those people who used to work in the shops is now available to do something else. Think on it. There’re some 7 billion of us around these days. Are all human needs and desires met? Is the reason that some of them aren’t that there’s not enough human labour to do so? Good, then we agree that human labour is a scarce economic resource. Thus, if we’re able to gain our shopping by using less of it then that makes us richer. Richer by the satiation of those other human desires which that labour can now achieve.

The quite literal decimation of the High Street isn’t something to worry or moan about. It is, instead, the direct evidence we need that we’re all getting richer.

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  1. Twenty years ago exactly the same woe and rending of clothing was about supermarkets destroying corner shops. “Think of the jobs!” Yes, but my corner shop is actually an Asda where I buy milk for 25p/pt and employs 12 people, the corner shop on the road opposite that closed 15 years ago charged 85p/pt in today’s money and employed 1.5 people.

    • Asda might employ 8 times the people, but fewer people per pint of milk sold. Your lower real price per pint is a direct result of a more-efficient business replacing a less-efficient one. This Asda would have replaced not just the Mom-and-Pop joint on your corner but several others, and achieved an overall reduction in jobs.

  2. When it comes time to decide who killed the High Street, the council will be seen to have been the culprit. Naturally internet shopping has had a terrible effect on the sale of (no doubt you economists have a term for it) items which are identified by product number and will be the same wherever bought. Items you want to look at first, clothing and jewellery and such, are not so easy to buy on the net. But the council is killing the high street through parking charges, rates and jobsworthism. My family got out of retail a while back because the profit disappeared in rising costs of operation. When you are profiting 5% of turnover on a 100% markup, a 10% increase in rates and other expenses can wipe it out. Leaving you running the shop purely for your own amusement. One of our shops was on a pedestrian sidestreet. We put out an A-frame sign so people could see us. The council said take it down. Why? A blind person might trip over it. Fine. But on payment of a 50 pound license fee it could stay. What about the blind person, we asked. Silence.

    • (1) The term for such interchangeable merchandise is “commodities.” (2) “Items you want to look at first…are not so easy to buy on the net.” No, they are not so easy to look at on the net. So thousands look at it at Best Buy, then buy it for less on Amazon. (3) This is why gambling was a vice until government ran it, why addictive products were discouraged until government got hooked.

      • Of course the problem for brick-and-mortat shops of being used as a hands-on free showroom for internet sales will be worse when you can compare something with a model number. Funny you mention Best Buy, they are reputed to have had a recovery after realising that and matching prices. Of course in the US there’s still the sales tax issue spoiling it for shops. That’s state and county, not the council, but the same principle applies. The town I lived in in Texas was full of stores, no gaps, but they were all gifts and women’s clothing with restaurants and such to take advantage of footfall. That town has three hours free parking. As does my local small town in Oxfordshire, also full of stores. Oxford itself on the other hand is a city whose fortune is largely built on its car factory but which will penalise anyone trying to drive there with delays, restrictions and parking charges. The people who will most miss the high street are the ones who are killing it.

        • At this point, though, those shops are selling an experience rather than merchandise. American downtowns were temporarily restrained from committing suicide by the fact that parking meters could only hold a certain number of quarters; modern machines selling permits to be displayed on the dashboard are finally making the experience more painful than going to a plaza out on the strip with free parking. Yes, Councillors in both countries cannot elevate their stewardship of downtown above their ache to be the one who declares it a “car-free zone.”

    • Around here, the council own (or just manage? Or is that mis-manage?) quite a lot of the empty rental commercial property. We use a home office as we are mostly on customer site. But, if we did want to rent space locally, even as a high-day-rate “knowledge business”, it would be a considerable burden on us. I don’t know how the local businesses manage.

      Well, I can guess, probably by taking less than the minimum wage themselves. The same as when we were starting up and most of the money went in to capital investment.

  3. As I commented on the Wal Mart column, in recent years there seems to have been developing a strong agitation on the left to stop technological development, for the sake of jobs of course, and a just and equal society. Next stop, close down all schools of engineering and replace them with law schools. If that won’t slow down all this innovatin’ that’s been going on nothing will.

  4. Has anyone done a study on the profession of town councillors? I’m guessing that shop owner, height street property owner and estate agent feature quite high on that list and we should dismiss whingeing about the end of the high street as vested interests realising the golden goose is dying.

    As I’ve said before, remove all planning restrictions and let the market decide what’s to be done with them. Change of use permitting is a major problem in slowing down high street regeneration.

  5. It would help the UK high street if all the things that people would like to do, which are currently illegal, were permitted. That means recreational drugs, smoking khat, operating brothels, converting space into sleeping pods or residential units, lightly regulated creches and care facilities for the elderly, and adults being permitted to trade their labour at prices in between 0.01p and 7.79p an hour.