Saturday, April 12, 2008

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Friday, April 11, 2008

Chosen!

When I published a new paperback edition/revision of my book, THE MALLING OF AMERICA, I became part of a new publishing phenomenon: print-on-demand. Several outfits, including Xlibris (where I published) offer books through primarily online booksellers, and when the orders come in, the books are printed and sent. It's digital age publishing, and for certain books and authors, it's great.

But these days, it's marketing that drives the publishing business. Conventional publishers market and publicize only a few of their books, usually to see that those that would do well anyway, do even better. But even big name publishers employ marketing and p.r. firms, and most of their authors must do most of their own publicity, and even hire p.r. and marketing firms themselves.

Still, getting your book noticed is a particular problem for those who "self-publish" through these print-on-demand companies, and so they often offer marketing services for additional fees, and there are independent companies that can be hired to do this work as well.

So after I published my paperback, I've been contacted from time to time both by Xlibris and these independent companies. Usually they offer to do things I've already done, or give me access to being reviewed in publications where reviews of my book have already appeared. (Not much point in offering me possible access to Kirkus reviews when I was already reviewed there, and in a full page review in the New York Times as well as the San Francisco Chronicle, etc.) But recently I received a unique offer--and an eye-opening one.

It came from an outfit called Chosen Few Books. At the top of the letter in headline-sized type were the words: The Malling of America has been chosen! The special meaning of "being chosen" is quickly "revealed" in the letter's first sentence: "Every year Christian authors write hundreds of inspiring and uplifting books." I'm sure that's true, but what does it have to do with my book?

"THE CHOSEN FEW is a limited collection of Christian titles that we believe deserve special attention. We discovered you and The Malling of America only because we were seeking books with powerful messages that we believe will sell."

I could rationalize ways in which my book could be read as having a message that comports with a Christian message of charity, tolerance and moral values. But it seems more likely that this letter was sent without anyone there having the slightest idea of what my book is about.

That much would simply be either touching or amusing or both. But then I took a look at what they were offering. There were the standard promises: book and author photo on their website, selling the book through websites and online booksellers (where it is already available), etc. But here's what caught my eye:

"We will guarantee an interview on a Christian AM/FM radio show."

And in bold:

We will guarantee an interview on a nationally syndicated AM/FM radio show.

For these and other services, they charge a fee of $2700. Which my perhaps creaky sense of ethical practices tells me, is for Christian payola.

For those unfamiliar with the word, "payola" was a term for record companies paying disk jockeys to play certain records in the 1950s, which led to congressional hearings and ended some careers. Things have slipped sufficiently now that many people may be surprised that according to the official radio and television code of ethics, an "interview" that's guaranteed by paying for it is unethical if not illegal, unless the radio program specifically states that it is a paid commercial.

I'm certainly not against giving potential readers the opportunity to buy my book, or to hear about it. (That should be obvious from this site.) But there are rules, or there should be.

Although I have to say that if I had $2700 to throw away, it might be fascinating to hear the questions of that interviewer, trying to figure out what the powerful Christian message of my book might be. I could point to the chapter near the end where I write about commercial media as part of the Mallcondo Continuum of controlled entertainment environments designed as simultaneous advertising and product. I could offer as an example, that very interview. Although perhaps that wouldn't be a very Christian thing to do.

Sunday, March 23, 2008

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Predictably Irrational:
The Hidden Forces That Shape Our Decisions
By Dan Ariely
Harpercollins; 304 pages; $25.95.

Call me crazy, but I’ve always thought the axiom of academic economics that says our decisions, especially buying decisions, are based on rational choice is itself irrational. Counter-examples are rife in most of world literature, movies and TV shows, as well as psychology since 1890 and the entire advertising industry, which is not notable for critiques appealing to pure reason.

There’s abundant evidence, including books from Vance Packard’s 1957 The Hidden Persuaders to Douglas Rushkoff's 1999 Coercion to Martin Howard’s 2005 We Know What You Want that advertisers and retailers thrive on pushing non-rational buttons, as have con artists peddling snake oil, pyramid schemes, Florida land, phony stocks and fake charities, from antiquity to the Internet.

But apparently it takes an official Professor of Behavioral Economics at MIT like Dan Ariely to suggest that “we are really far less rational than standard economic theory assumes. Moreover, these irrational behaviors of ours are neither random nor senseless. They are systematic, and since we repeat them again and again, predictable.”

In this book, Ariely describes experiments that pertain to general conclusions (“Why we often pay too much when we pay nothing,” “why we can’t make ourselves do what we want to do,” “why options distract us from our main objective,” etc.), and then offers extrapolations of why these tendencies are important. He then offers ideas on how to get ourselves under more rational control, individually and by changing organizational or societal structures.

Some of his research I found eye-opening, particularly the experiments involving the suggestibility that words can have. In one experiment, Asian-American women took a math exam. Half were given a preliminary questionnaire with innocuous survey questions that related to gender (opinions on coed dorms, etc); the other half, questions relating to their racial heritage (family history, etc.) The women who got the race-related survey did better on the subsequent math exam than the women who got the gender-related survey, apparently confirming the stereotypes of women as bad in math, and Asian-Americans as smart in math, as suggested just by the topic of whichever survey they were given.

Another group was given a scrambled-sentence puzzle with words “priming the concept of the elderly,” such as “Florida, bingo, ancient.” Then when they were dismissed, they walked more slowly down the corridor than members of a control group. They weren’t, Ariely notes, “themselves elderly people being reminded of their frailty—they were undergraduate students at NYU.” Yet another experiment found that after being asked to list the Ten Commandment—or when they were reminded of the Honor Code they’d agreed to-- subjects were more honest.

Other topics include how we judge (and misjudge) relative value, the power of placebos, the power of price (more ailments are allegedly cured when the subject believes the medicine is expensive), and the gently subversive idea that market forces don’t always regulate the market for the best outcomes.

Most chapters frame the information in terms of the kind of decision-making processes many of us go through in choosing what or whether to buy, though usually in more simplified form than the bewildering blitz of options, questions and information we contend with these days. Since this book is meant for a wide readership, the style is pleasantly conversational and personal, though jargon is sometimes replaced by cliché.

Ariely’s conclusions sometimes make good sense to me, like bundling preventive health care procedures to combat procrastination. But some seem to be too limited in terms of what questions the research suggests, and others too broad. His general assertions—that we tend to underestimate the role of the irrational in our perceptions and decisions, and that if we have some idea of how we are irrational, we’re less helpless and can assert more conscious control—are useful principles to repeat. Even if they’re not at all new ideas, they could well be new to readers of this book.

While Ariely’s stated goal is to understand the decision-making processes behind behavior—“yours, mine and everybody else’s” he may be overreaching in the applicability of his conclusions.“We all make the same types of mistakes over and over, because of the basic wiring of our brains,” he writes, but he presents no evidence of this causal relationship. It depends on his behavioral experiments being universal. The experiments he presents support the irrationality part of his argument, but I don’t buy the universal predictability of all their specific findings. While these experiments take place in California, New York, Massachusetts, North Carolina and so on, they rarely get off campus, and the experimental subjects (at least the ones he describes) are almost always university students.

That’s a specific demographic group that marketing psychologists study very closely, and pitch their products to in ways that don’t work with other—especially older—consumers. There are several conclusions that Ariely makes (the decisive role of image among peers when choosing food at a restaurant, or the “irrational impulse to chase worthless options” in a game, for instance) that could be quite different according to age or even income and social class. And that’s without even attempting to assess the experiment involving young men, Playboy magazines and a Saran wrap-covered laptop.

In any case the accounts of these experiments are useful as cautionary tales and examples inspiring academic as well as water cooler discussion. As for Ariely’s basic conclusion, addressed as this question—“Wouldn’t economics make a lot more sense if it were based on how people actually behave, instead of how they should behave?”—hey, aren’t those economists wild?

Update: This review now appears in the San Francisco Chronicle Sunday Book Review.

Saturday, June 09, 2007


I don't know the name of this mall, but it is (or was)
in Ogden, Utah. Photo by the Hahn Company in
the early 1980s.
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The Silent Threat of e-Waste

Hardly anyone talks about it, but the threat is astounding. According to Giles Slade in his book, Made to Break: Technology and Obsolescence in America (published by Harvard University Press.) e-waste may become "the greatest biohazard facing the entire continent."

E-waste is comprised not only of discarded computers but the very hottest consumer electronics, like ipods and cell phones, and all their combinations. One hundred million cell phones were thrown out in 2005 alone. All of these devices are prettily on sale at your friendly neighborhood mall or shopping center or Big Box outlet. And online, too.

In his book, Slade places the e-waste problem in the right context: of our consumption habits, which are partly fed by the carefully nurtured assumption that (as I heard a performance artist put it tonight) there is such a place as "Away." As in, "just throw it Away."

Made to Break recently won the U.S. Independent Publisher Book Award national gold medal for best environmental book of 2006. There's talk of a TV documentary. The following is a shorter version of my review of this book published in the San Francisco Chronicle:

As Steven Wright famously said, "You can't have everything. Where would you put it?" So you get rid of the old stuff, but what makes it old? The idea of products built not to last irks us, but for a variety of reasons we routinely discard devices that work just fine. Obsolescence by any other name has helped nourish a sweet economy, but a hidden cost is coming due fast, in the poisonous waste quickly overwhelming the world's capacity to deal with it.

Giles Slade, who describes himself as an "unaffiliated scholar," produces these numbers in "Made to Break": At least 90 percent of the 315 million still-functional personal computers discarded in North America in 2004 were trashed (it was 63 million just a year before), and more than 100 million cell phones -- 200,000 tons worth -- were thrown away in 2005. Cell phones are especially dangerous, because their toxic components are too small to disassemble and recycle. They are also being trashed with amazing speed, with the shortest life span of any electronic product.

Things are likely to get much worse in the near future, thanks to better enforcement of the international ban on exporting hazardous waste expected in coming years ($100 bills taped to the inside of inspected cartons currently help grease this activity, Slade notes), and especially due to the FCC-mandated switch to high definition TV in 2007, which may result in millions of suddenly junked televisions. "This one-time disposal of 'brown goods' will, alone, more than double the hazardous waste problem in North America."

The overall effect is profound. "As the waste piles up in the United States, above and below ground" Slade writes, "contamination of America's fresh water supply from e-waste may soon become the greatest biohazard facing the entire continent." Even if there were places to take the stuff offshore, there won't be enough ships to carry it.

"We are standing on the precipice of an insurmountable e-waste storage problem that no landfill program so far imagined will be able to solve." This assessment frames Slade's examination of the various kinds of obsolescence that contribute to the problem. A new machine that does something different (the PC), or adds new capability (cell phone versus land line) or adds new features (cell phones with Internet, etc.) is an obvious incentive for a consumer to replace the old machine. But besides the apparent progress of the new and improved, there are other factors that encourage consumers to buy and rapidly throw away products.

Changes in style (the annual model change adopted by the auto industry being the best-known example) and appeals to status encouraged by massive advertising are major forms of "psychological obsolescence," specifically designed to create demand for new versions of old and still usable products. But another way of selling new machines at a faster rate is to make sure the old ones break down sooner. This practice of "death-dating" is what most people think of when they hear the term "planned obsolescence."

The book ends where it began, with concise warnings about the perils of e-waste, and a call for "technological literacy." Just because cyberspace is invisible, and few people know or care how cell phones work, doesn't mean these new devices are as ethereal as magic. They have costs. We're paying in fuel and air pollution to power them (George Gilder projects that Internet computing will soon require as much power as the entire U.S. economy did in 2001), and to make them (author Hunter Lovins estimates the manufacture of a laptop computer creates 4,000 times its weight in waste.) Now toxic e-waste joins the mountain range of rubble from our throw-away economy. In the 21st century, garbage is becoming our most important product.

Wednesday, March 21, 2007

HARRY POTTER, ENVIRO WIZARD? Why not? With more than 12 million copies of the final book in JK Rowling's series expected to be sold in the U.S. alone, the publisher's decision to go green is going to have impact.

Scholastic Press has promised that no less than 30% of each book will be post-consumer recycled paper, and 65% of the virgin paper used will be from Forest Stewardship Council approved sustainable forests.

It's especially important when paper recycling is lagging-- more than 90% of printed matter still comes straight from the trees. Deforestation is one of the major problems affecting the biosphere. Among other things, it makes the climate crisis worse. So thanks, Harry. We need more of your magic.
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Monday, February 19, 2007


Long Beach Plaza, publicity shot, early 1980s.
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Unintelligible Design

Awhile ago I perused a book called The Laws of Simplicity by John Maeda of MIT's Media Lab, which is a designer's response to new devices that are too complex, like DVDs with multiple menus and nifty little electronics that come accompanied by manuals way bigger than they are. It's not a bad book--I especially liked the chapter on Emotion (you can see the Laws for yourself at lawsofsimplicity.com) but it doesn't really address the problems I have.

It's not that devices are too complex (though they are) but that their most basic functions are increasingly difficult to use. Maeda praises the simplicity of the Ipod dial, but one major problem with small devices is that the buttons and dials that operate them are very, very small, and often the "simple" design hides them. Screen menus, also very small. Plus they are dominated by "simple" icons. My lovely little digital camera has a little thing you move that puts you into "portrait" mode (as distinguished from "image" mode. Because of course a portrait isn't an image.) Then you press Menu and up comes a screen full of row upon row of indistinguishable icons that you need to decipher in order to control light and exposure and focus, pretty important when you're taking pictures. But not only do I need extra-strength magnifying glasses, I require the assistance of perhaps an Egyptologist skilled in the peculiar hieroglyphics of this particular camera brand and model.

The problem of buttons that are too small to distinguish and often to find, plus too small to see, is perhaps more a problem for aging baby boomers than the original target market for these devices, although since there are thirty billion of us (approximately), more than any other age cohort, it might be a good idea to keep us in mind. Devices to hear music everywhere, to edit video and sound, etc.--we've been dreaming of this stuff since the 60s. We're primed. And quite clearly, we're being dissed.

But it's not just age-related. How many of these devices do we use when we're supposed to be looking at something else--car music systems are perfect examples. If you've rented cars you know how insane many if not most if not all of these systems are, and how insane they make you. Just trying to figure out how to turn them on (or off!), change the station, get the station back you were listening to before, or switch to a CD etc. is difficult enough when you're looking right at it, but here's a newsflash for designers--people who use them are quite often DRIVING. Their attention--and their eyes--are needed elsewhere.

And there are other circumstances in which we'd like to turn the volume up or down, or whatever, by touch. I've got a portable CD player (I know, how quaint) that works admirably--good sound, doesn't skip--or not much--when I'm moving. But the various functions are scattered all over it, the play and stop are on top, the volume control is on the side, and is indistintinguishable (even when you're looking at it) from the control that pops open the lid of the CD. It's a nightmare, especially since the controls are very sensitive to touch, and if you brush the wrong one, you're screwed.

But don't worry--I've got a hot design idea for these devices--it may sound radical, but hear me out: How about an actual on/off button that's the biggest button on the thing, and a nice big red light to say it's on? Or even better--a dial that when you turn it clockwise, clicks on with a discernable sound, and as you keep turning it, it increases the volume. And put this dial on, say, the far left of the device. Then on the far right, another dial that allows for manual control of things like radio stations. And if you must, you can put a bunch of other buttons in a row between them. But the real key is, this design is the same on every device, no matter the make or manufacturer, so we all have a clear idea in our heads of how it operates, and we can do the most important functions without looking, even in the dark, even without taking our eyes off that idiot weaving into traffic in front of us.

I know it sounds far out--oh, wait--isn't that exactly the configuration that's been on every audio and video device since the dawn of humanity, until quite recently? I wonder why?

I understand as well that these devices are made for the mass international market, so they come loaded with icons and with manuals providing the same noninformation in six languages. So icons may be a fact of life, but how about a few words here and there? I'm willing to learn the Spanish for "low light" or the Chinese for "daylight." I already know the French for "night."And if you want to work on a real design problem, how about earphone wires and other wires that don't make it their life's mission to tangle up and intertwine? There are times they seem to exhibit the only signs of intelligence these devices can offer: the clear intent to make things difficult for me.

I caught part of a segment on 60 Minutes about this, and they said part of the problem is products being rushed to market without being adequately tested. So people are actually hiring consultants to help them figure out how to run their big screen TVs and turn on their car radios. This is a kind of decadence nothing in consumer culture so far has adequately prepared us for.

Saturday, February 03, 2007


Harborplace in Baltimore, 1980s.
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Rebirth

I've been neglecting this blog for awhile, but I'm going to be posting more regularly now, with a new template, some new features and a new focus.

I've noticed that a lot of visitors here have linked from the Malls of America and Livemalls sites, and so I've started my new links menu with them. Since those nostalgic photos from shopping mall history seem to be of interest, I plan to add some here from my collection of hundreds of images gathered over the years I researched THE MALLING OF AMERICA. However, a lot of those images need to be digitized first, so it may take awhile. I did convert a few slides--like the one above--but there are many more to come.

I'm fascinated by mall nostalgia, but I am mostly interested in the future. So this blog will also take up those aspects of consumer culture that characterize our present and have the greatest impact on the future. I hope that will be interesting, too.

I'll also be going back to previous posts and tagging them, to make the site more searchable. See you soon, and much more often...

Thursday, August 17, 2006


Lance Jackson for SF Chronicle Posted by Picasa
Is Wal-Mart a Potent Political Issue?

As the campaign heats up for Congressional seats in this November's election, the New York Times claims that "Democratic leaders have found a new rallying cry that many of them say could prove powerful in the midterm elections and into 2008: denouncing Wal-Mart for what they say are substandard wages and health care benefits."

The erstwhile popular shopping choice, with more stores in more places than its top competitors combined, may now be a symbol for the economic race to the bottom that is affecting its core market of middle class and lower income Americans.

It is getting harder for the non-wealthy to afford decent housing, health care and education because wages haven't kept up. But will attacking Wal-Mart resonate with the people who often shop there? According to this story, a broad segment of Democrats is betting that it will.

Still, what is striking about this campaign is the ideological breadth of the Democrats who have joined in, including some who in the past have warned the party against appearing hostile to business interests. Senator Hillary Rodham Clinton of New York, who was a member of Wal-Mart’s board when she lived in Arkansas, the corporation’s home state, returned a $5,000 campaign contribution from the company last year. Mrs. Clinton said she did so to protest Wal-Mart’s health care benefits, and she has continued to distance herself from the policies of a company she was close to when she was the first lady of Arkansas.

John Edwards, the former v-p candidate, spoke at an anti-Wal-Mart rally in Pittsburgh recently. “Wal-Mart as an example of the problems that exist in America today is a powerful political issue,” he said in an interview on Wednesday. “I think our party pretty much across the board agrees that people who work hard should be able to support their families. When a company like Wal-Mart fails to meet its corporate responsibility, it make it impossible for that to occur.”

Democrats say Wal-Mart is a potent symbol of corporate excess. The company earned $11 billion in profit last year, but fewer than half of its employees in the United States are covered by its health care plan, and the average worker earns less than $20,000 a year.

These attacks come at a weak moment for Wal-Mart. After abandoning Germany and South Korea (and encountering difficulties in England), the company posted its first quarterly loss in a decade. Higher gasoline prices in the U.S., which kept some shoppers home while increasing Wal-Mart costs, was also a factor. Also recently its former vice-chairman pled guilty to stealing from the company.

There is some statistical evidence that the Democrats may be onto something. From the latest Zogby poll on President Bush's job performance:

Just 62% of Republicans give him positive marks for his job performance, while 38% give him negative marks. Even among weekly WalMart shoppers – a demographic group identified by Pollster John Zogby as a critical support group for Bush – just 45% now give him positive job marks, though his numbers among those shoppers have improved 10 points since early June.
More than three out of four – 76% – of weekly WalMart shoppers voted for Bush over Democrat John Kerry in the 2004 presidential election, earlier Zogby polling showed.

Friday, June 09, 2006


Would you rather click than shop? Photo: Kowinski at Mall of America. Posted by Picasa
The Coming Triumph of Click-and-Shop?

Is the warning I first heard in the early 1980s--that those investing in "bricks and mortar" venues for shopping, i.e. stores, shops and shopping malls--were going to lose their proverbial shirts, finally coming true? The Boston Globe seems to think so.:

Barbra Streisand notwithstanding, people who need people seem to be a dwindling population. Online sales are soaring. The Internet, once a forbidding terra incognita, is now a routine destination for millions of shoppers. New research shows that customers now make more than three times as many purchases online as they did five years ago; Americans are projected to spend more than $200 billion online this year, double the amount spent three years ago. The bottom line is that the once-social experience of shopping is steadily being transformed into a solitary exercise of point-and-click.

What's interesting about the story is that it attributes the change not only to online's convenience but to the retailers who have gone towards "low prices" and no service, not only in the Wal-Mart sector but in others as well:

``As far as human interaction goes, it's getting less and less in most establishments anyway," said Karlin, noting that many grocery stores encourage shoppers to use self-checkout lanes. ``You have to fend for yourself. Unless it's a really high-end store, I find the human interaction is not something I necessarily miss."

There is a kind of vicious circle at work, when retailers try to increase profit margins with cutting costs by paying their people less, encouraging employee turnover, and not investing in training or in customer service. As shoppers are turned off by non-existent service, clerks who know nothing about the merchandise and are as likely to be loudly talking to each other about their private lives as in actively waiting on people, the stores lose more money, and cut back service again.

Factor in traffic problems, and malls and stores that cut costs by skimping on upkeep and refurbishing, and the shopping experience becomes more of a grim chore than a pleasure.

Add to that some of the particular advantages of at least some online shopping, such as customer feedback and evaluations of products. This is not only helpful in making a choice, it has that missing social aspect as well, when you hear specific stories about how other people bought an item, how they used it, what happened to it, how they liked it, etc. This is still something you can possibly experience in a real store, but it's more happenstance. Then again, happenstance is still one of the reasons people do leave their keyboards and go out to the mall. And thanks to wifi and Internet-ready cellphones and Blackberries, they can always take the wired connection with them.

Thursday, June 08, 2006

Site Map
(if links don't work, click on the date in the archives in the left column)


The Store That Ate the World (Wal-Mart book reviews) 1/22/2006

The Great Malls of China: Take Two (LA Times oped) 1/08/2006

Wal-Mart in the Red 10/30/2005

The Mall is a Place 4/03/2005

Spend the Children 2/27/2005

Mall Captain and the World of Tomorrow (Victor Gruen) 2/20/2005

The Empire Stumbles 11/28/2004

The Heart of Mallness (Mall of America) 2/22/2004

Consuming the Future 1/05/2003

Jane Jacobs April 27, 2006

John Kenneth Galbraith May 1, 2006

Monday, May 01, 2006


John Kenneth Galbraith Posted by Picasa
Prophet of the Consumer Society

So soon after Jane Jacobs, another great influence on how we can conceptualized Shopopolis passed away Sunday: John Kenneth Galbraith. He was 97.

It was my good fortune that the first book on economics I read was his The Affluent Society. It became central to my first college paper, and had no small influence on my book, The Malling of America.

Galbraith was not only an economist whose analysis of affluence and the place of corporate power in capitalism is perhaps more pertinent today than ever, but he was a great stylist--an economist, political observer and teacher "addicted to writing," and also very good at it.

His sense of style carried over into his life, and perhaps that also made him a natural for the Kennedy administration. He also served FDR and was a principal author of LBJ's Great Society, (he wrote LBJ's speech on it as well) though disagreement over Vietnam drove him away from government, and from keeping his ironic eye on implementation.

He remained an active and popular lecturer at Harvard for many years. A photo of him in 1998 shows more vitality than many others decades younger could muster. One of his 33 books--and another of my favorites--is called Economics, Peace and Laughter. That was John Kenneth Galbraith. Here's his lengthy and fascinating obit in the New York Times.

Thursday, April 27, 2006


Jane Jacobs Posted by Picasa
R.I.P. Jane Jacobs

Jane Jacobs died at the age of 89. With one book, the Death and Life of American Cities, in 1961, she brought a new point of view to how professional planners and others conceived of cities, by analyzing and expressing what many people felt from their own experience made cities work. Lewis Mumford once advised planners to "make cities for lovers and friends." Jane Jacobs told them how.

She was the principal participant in a panel discussion I saw on C-Span in the past year or so, and her intelligence remained incisive and honed in on what matters. Her last book, Dark Age Ahead, is a chilling but believable prophesy.

My book, The Malling of America, could not have been possible without her work. In it, I quote her comments on Fanueil Hall Marketplace---still among the wisest on the subject of urban malls.

For those who don't know her work, there's a fine capsule biography and description of her books on the web here, and James Howard Kunstler's interview with her here is a treat to read. Judging by her writing, speaking and TV appearances I've seen, she was a lively, humorous (the Pauline Kael of urban critque), compassionate and highly intelligent and perceptive. There's no one who can or will replace her, but we can all still learn from her work.

UPDATE: John King at the San Francisco Chronicle wrote a terrific remembrance. He sums up what Jane Jacobs did this way: "The beauty of Jacobs' impact is that she did meticulous observation, then went with her gut. She wasn't an architect or a planner, just a city resident who looked hard at her surroundings and saw that complexity is the spark that endures."

Sunday, January 22, 2006


AP photo. Posted by Picasa
The Store That Ate The World

This is a longer version of the review appearing in the San Francisco Chronicle.

by William S. Kowinski

The Wal-Mart Effect: How the World’s Most Powerful Company Really Works---and How It’s Transforming the American Economy
By Charles Fishman
Penguin Press

Wal-Mart: The Face of Twenty-First Century Capitalism
Edited by Nelson Lichtenstein
The New Press


Business journalist Charles Fishman begins with a disarming story of how Wal-Mart produced an environmental benefit when the company decided that paperboard boxes around cans of deodorant were unnecessary. So they disappeared—not only from Wal-Mart but from everywhere—thereby saving many trees. But the reason Wal-Mart did this, and the reason everyone else followed, are also the key factors in a new kind and extent of destructiveness.

These factors cause the various manifestations of the Wal-Mart Effect, which is the subject (and not merely the title) of Fishman’s book. The first factor, familiar as Wal-Mart’s slogan, is the company’s single operating principle, administered absolutely, without exception: always low prices. It is the company’s one commandment, its ultimate morality, trumping all other considerations.

The second factor is Wal-Mart’s unprecedented size. “For most of this decade, Wal-Mart has been both the largest company in the world, and the largest company in the history of the world,” Fishman writes. It still would be in 2006 except that doubling the price of oil places Exxon-Mobil in the top spot. But Wal-Mart is still America’s largest private employer—and the world’s. And its stated goal is to be twice its current size by 2010.

The stores themselves are getting larger. Wal-Mart’s explosive growth in the 1990s was largely due to adding supermarkets to create “supercenters.” Now the majority of new stores being built, the 1600 supercenters at the end of 2004 are expected to double by 2010.

Ninety percent of Americans live within 15 miles of a Wal-Mart, and 93% of U.S. households shop at one at least once a year. Fishman concludes: “ Wal-Mart reshapes the economic life of the towns and cities where it opens stores; it also reshapes the economic life of the United States---a single company that steadily, silently, purposefully moves the largest economy in history.”

It all results from the combination of the Law of Lower Prices and Wal-Mart’s unprecedented size and scale(and “the power, the impact that comes with scale”) . The attraction of low prices at Wal-Mart depends on low costs to Wal-Mart. That so obviously translates to low pay for employees that Wal-Mart no longer pretends it pays a living wage. As a number of lawsuits show, it may also translate to lunch and other breaks curtailed, overtime work demanded but not paid for, and undocumented workers locked in overnight to clean stores.

Wal-Mart is so fixated on lowering costs that it will spend a lot of money to do it. It spends lavishly on thwarting union organizing, persuading municipalities to accept its new stores and most recently, with a brand new “war room” of political consultants and public relations, on trying to counter bad publicity.

Wal-Mart’s obsession with continually lowering prices means makers and suppliers of the products it sells must also cut costs, and this is where the power of size and scale really comes into play. “Many manufacturers,” Fishman writes, “report consistent, irresistible requests for yearly 5% cost cutting.”

He provides examples of company after company playing out the same inevitable drama: dazzled by the volume sales possible through a single customer, they sign on to supply Wal-Mart. They get lean and more efficient, and make money. Wal-Mart calls for more volume (which becomes as addicting as cocaine, one manufacturer said) and more cost-cutting. Soon that means cutting corners on materials and quality, and moving production through a descending series of low-wage countries that might end up with a young woman in Bangladesh being paid thirteen cents an hour, and slapped across the face with the pants she’s sewing if she makes a mistake. When costs can’t be cut even further the supplier goes out of business, and Wal-Mart moves on to another.

It is this cost-cutting commandment that led to Wal-Mart demanding that suppliers stop boxing deodorant cans, and Wal-Mart’s power that led to an industry-wide change. But this same combination has meant demands that have destroyed companies and moved other manufacturing overseas. In 2003, there were more Americans selling things in retail than making things in manufacturing for the first time in modern history. For workers it means lower-paying job. For the country it means dependence on industrial capacity and skills elsewhere.

Lower wages also mean families must depend on lower prices, which by an amazing coincidence they can get only at Wal-Mart—especially if local businesses have been driven out of existence, which also means more people have to work for Wal-Mart. One might be excused for imagining that Wal-Mart is turning low-end retail into one big company store.



Fishman’s book is highly readable, incisive, precise and even elegant in concentrating on its central thesis. “Wal-Mart: The Face of Twenty-First Century Capitalism,” an anthology emanating from a University of California conference on this subject, amplifies and augments Fishman’s argument. It provides historical context, economic and sociological analysis (for instance, on why Wal-Mart was sued for discriminating against women as managers), and more information that support and broaden Fishman’s thesis.

Several of its authors write about Wal-Mart’s relationship to government and public policy. Editor Nelson Lichtenstein shows how the company’s growth parallels the failure of labor law reform and enforcement in the 70s and 80s, and free trade legislation that makes importing products and exporting jobs easier.

Bethany Moreton’s excellent historical overview mentions that Wal-Mart founder Sam Walton’s ancestors prospered with government land grants, subsidies and jobs (though Walton’s father wound up repossessing farms for a mortgage company during the Depression).

James Hoopes cites one of many government’s contribution to Wal-Mart today: the estimated $3 billion a year taxpaying consumers spend on medical care, food stamps and housing subsidies for Wal-Mart employees.

Others provide further examples of the Wal-Mart Effect. Edna Bonacich and Khaleelah Hardie find it in the growing role of international shipping, where companies also discover that Wal-Mart can be “an extremely powerful and unavoidable bully that forces them to cut prices beyond what is possible…”

James Hoopes and other authors also note that while technology may empower small enterprises, Wal-Mart uses information, transportation and manufacturing technology to become bigger and exert tighter control. For example, cash drawers and thermostats in all Wal-Mart stores can be controlled at corporate headquarters---the kind of capability that might cause Orwell’s Big Brother to weep with envy.

Fishman also notes that Wal-Mart’s penchant for control extends to information about itself. The company refuses to give out the most ordinary of information, like the dates of store openings, or the figures required by the Consumer Price Index (so it is always wrong.)



The writing is spotty in both of these books, but together with the remarkable middle American voices in Robert Greenwald’s film, “Wal-Mart---the High Cost of Low Price,” they provide a rich guide through the many dimensions of Wal-Mart’s past and present impact.

But what of the future? Fishman defines a few of Wal-Mart’s vulnerabilities: it can’t compete on quality or service, or on presentation and the shopping experience (even Target beats it there), or on employee retention and long-term community relations (Costco is far superior on those.)

Essentially, when it’s not competing on price, it can’t compete. Still, impoverishing Americans isn’t exactly a blueprint for a thriving consumer economy. Perhaps that’s why Wal-Mart is increasingly looking to markets overseas. “Always growing, Wal-Mart adds more than 50,000 jobs and 545 stores in one recent weeks” boasts one of its official web sites, but all the jobs and stores turn out to be in Japan and Brazil. It plans to open 600 new outlets this year: 370 in the U.S. and 230 abroad.

But eventually won’t the marketplace enforce a proper balance? “Wal-Mart isn’t subject to the market forces,” Fishman writes,” because it is creating them.”

In the long-term, it would seem that the Wal-Mart Effect is unsustainable. If the company continues, locust-like, to relentlessly impose its one adaptation of “always low prices” with its sole purposes of survival and reproduction, it will destroy the environment that nourishes it. But by the time that happens, what else will be left?

Thursday, January 12, 2006

The Great Malls of China: Take Two

The earlier entry on this blog led to writing an oped piece that was published in the Los Angeles Times. The following entry uses material from that oped before editing at the Times, plus other pertinent material. So this will be the definitive "free" Internet version.

The news that China is now more popular around the world than the U.S., according to a Pew Research Center survey, is just the latest Chinese challenge to the American ego. The Chinese are buying U.S. businesses with hallowed American brand names, like Maytag and IBM's PC unit, and they're fighting the U.S. for control of Unocal oil. They're making a great deal of what Americans wear, use and buy. They hold a big chunk of the U.S. national debt. And they've even gone ahead in the most characteristic icon of American life: the shopping mall.

The West Edmonton Mall in Canada has been the largest shopping mall in the world since it opened in 1985. But this year the largest mall in the world is the Golden Resources Mall in Beijing. It will soon be eclipsed by the South China Mall, complete with a replica of the Arch de Triomphe.

The Mall of America outside the Twin Cities of Minnesota has been the biggest in the U.S. for more than a decade. There are now four malls in China that are bigger. South China Mall will be three times its size.

By the end of the decade, China is expected to have at least seven of the world's ten largest shopping malls. With some 400 malls now, shopping center construction in China is booming, while mall-building has been steadily declining in the U.S. (from 35 major mall projects at the turn of the century, to 13 from 2001-03 to 8 projected for 2004-06, "significantly fewer new mall projects and significantly less" leasable area, according to the International Council of Shopping Centers).

Of course, the U.S. has a half century start while China's vastness is mostly unmalled. But this trend does suggest a few things. China has become one of the world's primary producers of retail goods, based partly on its ability to undercut prices with cheaper labor. Yet there is so much money flowing into China now that a consumption economy is growing fast. The customer potential in China and the far east is one reason that the Simon Property Group, by far the largest U.S. shopping mall developer(including Mall of America)opened an office in Hong Kong in May.

Chinese producers are supplying cheap consumer goods sold in the U.S., mostly at Wal-Mart and other low-end retailers, resulting in a huge trade imbalance. Nearly half of total U.S. imports arrive by sea through the Port of Los Angeles and Port of Long Beach. As Long Beach communications director Yvonne Smith told Frontline, "China is doing the manufacturing, the United States is buying it." Much of the $3 billion in U.S. exports to China consisted of raw material---cotton,scrap metal,waste paper-- for the $36 billion of mostly manufactured goods and the boxes they arrive in from China.

“Wal-Mart has a very close relationship with China," Duke University Professor Gary Gereffi told Frontline. "China is the largest exporter to the U.S. economy in virtually all consumer goods categories. Wal-Mart is the leading retailer in the U.S. economy in virtually all consumer goods categories. Wal-Mart and China are a joint venture."

Frontline continues: "No one can compete with China. Such efficiency, such manpower," said Frank Yuan, the former middleman who did business with Wal-Mart, and who now heads an international apparel trade show. "If you look at [Wal-Mart's] shoes or housewares, 80 or 90 percent is coming out of China. And apparel is not as big as it should be." After U.S. quotas on textile imports expire on Jan. 1, 2005, Yuan expects imports from China to rise to 80 percent of the apparel market.

But while all that income helps create a new consumer class in China, the middle class that once filled America's malls is declining. The U.S. mall industry anticipated a splintering middle class in the 1980s, responding with fashion malls for the better off and emphasizing entertainment to attract what was left of the mass market. Then Wal-Mart came along and stole the growing "low-end" consumer market, becoming the world's largest retailer in the process, as well as China's best customer.

With health care costs still rising, and fewer employers offering good benefits, the increasingly insecure middle class has less money (and with more women working and more people struggling with several low-wage jobs, much less time) for recreational shopping at the mall. What was once unheard of is now fairly common: U.S. shopping malls closing.

The opposite situation seems to be occurring in China. To some, the spectre of an officially Communist country spawning so much business enterprise so successfully seems ironic at best. Others point to all this commerce as the final if unacknowledged triumph of capitalism over Marxism.

But the lessons learned may be a little different. The U.S. has so far managed to avoid widespread conflict over economic inequities by making sure that though many people can no longer afford health care, retirement or higher education, with an extra job or two they can still afford to shop---at least at Wal-Mart.

Especially with all the new and less controllable sources of information becoming available as a result of supplying the West, the Chinese may be learning as well that pacifying the population is not such a bad idea. They may also realize that shopping is the opiate of the people.

In the U.S., even with the wealthy few continuing to get wealthier, the days of the malling of America may be numbered. But those high-end shoppers with the wherewithal to travel can still find the goods and the mall experience they may crave. Because there are some really great malls in China.