Dead Malls: The Steady Decline of American Shopping Centers

(Competitive Enterprise Institute) The kind of American chain stores and retail formats that dominated the second half of the 20th century have fallen on hard times in the 21st, and commentary on this influential and dislocating trend has become a cottage industry unto itself. Amid coverage in the business press on topics like “the winners and losers of the retail apocalypse” and how “1 in 3 American malls are doomed,” there is even a vibrant and, to many, inexplicable cultural fascination with retail history and dead malls.

The question of how the United States ended up with so many large, enclosed suburban shopping centers built between 1960 and 2000 is an interesting one. Naturally, trends in urban planning and government housing policy played a role. We wouldn’t have had as many suburban malls—or as many suburbs—without the interstate highway system.

Many localities, moreover, were eager to attract new business investment, and offered new mall developers special benefit packages that included things like changes to zoning rules, property tax abatements, and promises to spend additional taxpayer money on road and utility infrastructure. The same is true today.

All of these things were conscious choices made by elected leaders and municipal civil servants, not market forces. Those decisions drove the expansion of suburban development and of big enclosed shopping centers.

The conclusion that this argument is leading to will be clear to people familiar with the free-market line of thought. Government policy that artificially privileged a certain type of economic development led to overinvestment in the privileged category and eventually led to the dead mall retail bust we see today.

We would probably have seen fewer small town Main Streets wither away if not for these unfair policies and fewer shopping centers going bust, many years later, all at once.

Culture-critic hipsters, horrified by this manifestation of revolting consumerism, theorized that no one could have wanted to see such development happen. Surely it was a conspiracy against good taste.

But as it turns out, culture-critic hipsters tend to be poor judges of what most Americans actually want and enjoy. Urban sophisticates of the 1980s may have been disgusted at the thought of spending their Saturday at a mall, but their absence only made more room for the hordes of Americans who were more than happy to make their local mall their second home and “third place.” 

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