Sowell on Young's Grasp of Economics
Thomas Sowell examines Andrew Young’s comments about small store owners in ghetto neighborhoods and sees a failure to understand basic economics. An excerpt:
The reason least likely to be acknowledged by those who blame the store owners is that crime, shoplifting, vandalism, and riots have raised the costs, both directly and by causing insurance rates and the costs of security to be higher in ghetto neighborhoods.
The costs of delivering goods to small neighborhood stores are also higher than the costs of delivering goods to huge supermarkets. Delivering a hundred cartons of milk to a supermarket is cheaper than delivering ten cartons of milk to each of ten local stores scattered around town.
Selling a customer $50 worth of groceries in a supermarket takes less time than selling ten customers $5 worth of groceries in a little neighborhood store. Faster turnover is one of the keys to a supermarket's lower prices.
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