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An Interview with Stacy Mitchell
Stacy Mitchell is a senior researcher with the New Rules Project, a program of the nonprofit Institute for Local Self-Reliance. She has advised numerous communities on strategies and policies to limit chain store proliferation and strengthen locally owned businesses. Mitchell is the author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight lor America's Independent Businesses (Beacon Press, 2006), as well as Hometown Advantage: How to Defend Your Main Street Against Chain Stores and Why it Matters (Institute for Local Self-Reliance, 2000). She is chair of the American Independent Business Alliance.
Multinational Monitor: What is the big box "swindle?"
Stacy Mitchell: The swindle is that many of us believe that we are doing well by shopping at big box stores, that the chain retailers are bringing us economic growth, prosperity, jobs and low prices. But, in fact, we are paying a huge hidden cost for these retailers. That is the swindle.
MM: But people are shopping at them; they must be happy with what they are getting.
Mitchell: People say, well this is just the free market at work. But I think what's happening is more complex than that, for a number of reasons.
For one, there are the many externalized costs that these companies impose. These are costs that do not show up on the price tags at these stores, but that are borne by society as a whole. Hidden costs distort the market.
The playing field has also been tilted by government policy, which, for more than two decades, has fostered and underwritten the expansion of big-box retailers while systematically undermining the survival of independent businesses. For example, every year, cities across the country provide hundreds of millions of dollars in development subsidies to retailers like Wal-Mart and Target to help them build new stores. About half the states have enormous tax loopholes that enable multi-state retailers to escape paying all or part of their state income tax.
A third way that the market is distorted is that mega-retailers routinely use their market power to undermine their rivals. They win not by being better competitors, but by using their size and power to gain an unfair advantage. They pressure suppliers to give them special deals...