More supermarkets won't make us richer

I keep hearing politicians and commentators say that a new supermarket opening is a good thing because it creates jobs and generates wealth. If only more supermarkets were opening we would all be saved! The unfortunate fact is that this just isn't true.

Building a new supermarket does create some construction jobs in the short term, but once it is built it creates no wealth, all it does is to move goods around from one place to another. One more shop doesn't mean that we will buy more stuff, it just switches peoples shopping activity from one shop to another. Over time new shopping malls have changed our shopping habits and we have abandoned the high street for the new complexes with good road access, free parking and an 'everything under one roof' experience. In turn though, these are being superseded by the Internet, whish is more convenient and even more comfortable, especially now you can do it on your lap in front of the telly.

But none of these changes in where we shop does anything to create any more of the stuff that is in the shops, and it is the stuff that is in the shops that we want to buy which is the actual wealth.

So, what is wealth? What are the things that represent riches to us? If you think about what wealth is for a minute you can work out that the things which make us feel rich are things which are made by human beings working on them. Houses, furniture, cars, clothes, dishwashers, tellys, art - these are the things that make our world. They are made from basic raw materials that exist on the earth and they are turned into wealth by the labour of humans.

Lets take houses, what are houses made of? Bricks. And what are bricks? Lumps of clay dug out of the earth by humans and burned in fires made from coal dug out of the ground by some other humans. I know there is more to making a house than just bricks, but the samelogic applies to all the other bits. The timber comes from trees planted and tended by humans, the wiring comes from copper existing in the earth and mined by humans, the glass in the windows is sand with work applied to it...

So how can we have a housing shortage? We have clay and coal in the ground and people standing idle. We have raw materials and labour but they are prevented from being brought together to make houses, how can this happen?

The problem is that the raw materials are owned by some of the human beings - and they are currently not interested in making houeses. They have plenty of houses already. The current economic outlook makes it look risky to build houses at the moment because the humans who don't own the raw materials don't have any money to buy houses - mainly because they don't have any work building houses.

We are at the mercy of the human beings who own the stuff. We just have to hope that one day they will have some kind of incentive to allow some of the other humans to apply work to their stuff and generate some actual wealth - and not just open another shop. 

 

 

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