Gapification

Radley Balko argues that it’s not Walmart, it’s regulation:

People who decry the Wal-Mart-ification and Gap-ificaiton of America need to realize that regulation often does more harm to local businesses than predatory pricing, loss-leader business models, or some other imagined corporate evil.

I’ve lived in or near Old Town for most of the last 10 years. It’s not at all common to see an independently-owned antique shop or art gallery get boarded over, only to be replaced in ensuing months by a franchise. It’s not difficult to see why. Franchise operators can tap the resources of the parent company, particularly when it comes to accessing legal help with experience navigating through and working with local zoning laws and business regulations.

Local officials who simultaneously decry big box stores and national chains while doling out burdensome regulatory structures and complicated permit processes should understand that regulatory burdens hit the smaller, independent places hardest, because they’re the places that have the smallest amount of discretionary cash to hire legal aid (or, if you’re really cynical, to make the appropriate campaign contributions). They’re on a tighter budget and, therefore, have a smaller margin of error when it comes to hassles like delaying an opening because some bureaucrat determined their signage is a couple of inches out of compliance.

There’s a larger lesson in all of this, too. Those who push for federal regulations to rein in “big business” often don’t realize that the biggest of big businesses don’t mind heavy federal regulation at all. They have the resources to comply with them, not to mention the clout in Washington to get the regulations written in a way that most hurts upstarts and competitors.

Big businesses know that a heavy regulatory burden is the best way to make sure small- and medium-sized businesses never rise up to challenge them.

One Response to “Gapification”

  1. rpl says:

    The last few paragraphs sound like another case of Bruce Yandle’s “Bootleggers and Baptists”. See, for example, Russ Roberts’ interview with Yandle on the subject.