Street Talk

Creative Economy Or Creative Destruction

By Mickey Howley


Alderman Tommy Swearengen would often say at city board meetings whenever there was a Main Street issue, “Let’s ask the merchants.” And the reason Tommy did so is he wanted the downtown merchants’ opinion as to how something would affect them. The merchants have what I like to call “skin in the game.”  They are invested in downtown and in the well being of the community as a whole. The “merchants” as Tommy called them are not a unified collective group—no, they’re just local folks who have buildings and businesses. They live here. They work here.  
The whole idea of merchants clustered on one street in a relatively compact area leads us to ask, why is it like that in the first place? You’ll find that pattern all over the world. The answer is cooperation, convenience, competition, and transportation. Cooperation because there is a common interest in the town and many businesses depend on or buy from surrounding businesses—it’s a symbiotic relationship. Convenience as all the customers come to one central location. Competition for customers because no one business can dominate. Transportation as it is more efficient when all are in one central location – both for customers and businesses. And those factors are why there are cities and towns. Society. Otherwise we’d all live out on our 40 acres and make our own food and clothes.
Wal-Mart practices what economists call “creative destruction,” (I’m not making this up!) by breaking the tradition of local self-starting downtown entrepreneurship and shifting most commerce to the outside of towns, thereby eliminating jobs and businesses and destroying property value in town centers. All property, not just commercial, becomes worth much less. Plus Wal-Mart is extractive – taking maximum money and employing the absolute least amount of labor it can from a community. But that creative destruction process can save you money. Looking at the most pro-business libertarian economic analysis (not counting any other social and collateral and infrastructure losses and costs) and Wal-Mart will save you money day in and day out. About $1.50 per day. Factor in aggregate losses in other jobs, decreased property taxes, real estate devaluation and your daily saving of a buck and a half goes negative. Fast.
Main Street practices what is known as “Creative Economy.” It is local in nature and derives from a sense of place and of history, an economic attitude built on existing assets. And it is a local economy that is both collective and personal. Look at the effect in Water Valley in the last 5 years—19 new businesses with 65 new jobs just in the four block downtown area. And these new businesses compliment and add to the existing business mix. They actually benefit the established businesses and the people who live in this town. That’s the creative economy – use and enhance what is already there and good while addressing community needs from a local perspective and use local entrepreneurship. Doing it ourselves, making our own money, and keeping it here. It is working. And picking up steam. This year alone eight major building renovations downtown – an investment in Water Valley of $2.4 million – that’s as much as the last five years combined. Another 12,000 sq. feet of ground floor retail coming back. With an estimated 26 new jobs. And no loss of existing jobs. Wal-Mart can’t say that.
The choice is pretty clear – creative destruction the Wal-Mart way – creative economy the Main Street way. Can’t do both. They’re incompatible.
Visit Batesville, Grenada, Holly Springs, Senatobia, Houston. See what the Wal-Mart effect has done to the economy and vibrancy of downtowns from Water Valley size towns to towns twice our size. And when you’re in our downtown be like Tommy and ask your neighbors – ask the merchants. They are the same.

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