Economic Color Blindness of the Sears Catalog

Sears’ innovative business model brought unprecedented market access to black customers

Sears catalog I already felt badly in 2017 when the local Sears store closed, even though I probably hadn’t shopped there in over a decade. I felt worse in 2018 when the company filed for bankruptcy.

Part of it was that Sears should have been the best position to become what Amazon has turned into, the category killer. It was because of the Sears catalog.

Now I’ve read this very entertaining article, The Economic Color Blindness of the Sears Catalog. The company “played an important role in circumventing the institutionalized racial discrimination of the Jim Crow South.”

I get the sense that a lot of people in America don’t understand how restrictive things could be. “For example, a black shopper would likely face greater difficulty than a white shopper in obtaining credit for a large purchase when such decisions fell to a racist store owner. The retail store could impose a higher credit price structure on black patrons as a matter of personal discretion, or deny them credit entirely.

“The Sears catalog, by contrast, would allow black patrons to buy the same item by mail on credit, with Sears having little ability to bring race into the equation.

“Black patrons could also be refused a sale in a store if they sought an item deemed dangerous to the racial hierarchies of segregated society, such as a firearm.” But Sears, in the days before more restrictions, could ship guns to any home.

“The Sears catalog circumvented the ability of local store owners to discriminate as it essentially allowed for a faceless transaction that took place entirely by mail. Combined with the expanded price competition it brought to the retail industry” – isn’t that what Amazon did more recently? -“Sears’ innovative business model brought unprecedented market access to black customers — and did so in a way that allowed them to avoid the indignities of discriminatory treatment at the cash register counter.”

What’s also interesting is the assessment by Gary Becker from back in the 1950s that “a discriminatory cultural belief such as racial prejudice also carries associated economic costs for the discriminator.” In other words, it costs bigots to be bigots, a lesson still applicable today.

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