Why should New York City run a chain of grocery stores?

On that list, the idea of government-run grocery stores isn’t the most pernicious, but it is the most grimly fascinating, in part because nobody seems to be asking for it. The demand to “freeze the rent” on the slightly less than half of the city’s rental stock that is subject to rent stabilization rules is misguided for lots of Economics 101 reasons. But it’s also true that, for many of those same reasons, it will serve the short-term interests of rent-stabilized tenants. I think it’s a bad idea and regrettable that so many New York voters seem excited by it. But I do understand what they’re thinking.

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The popularity of city-run supermarkets, by contrast, is kind of mystifying. The idea keeps popping up on the left, though nobody demands it and nobody can decide what problem it’s supposed to solve. When this proposal came up in Chicago, it was supposed to tackle ‘food deserts.’ The idea was that some neighbourhoods, especially on Chicago’s poor and depopulating South Side, were suffering because residents lacked easy access to a grocery store.

Once upon a time, I myself lived in a supermarketless urban part of Washington and can confirm it was annoying. Eventually, an influx of more affluent newcomers brought in their wake a Trader Joe’s. Which suggests that food deserts are not really much of a problem. If you improve public safety, transport infrastructure and public education in a given neighbourhood, then more people will want to live there—and stores will open to serve them.

Trying to address a cycle of neighbourhood decline by opening publicly run supermarket doesn’t make sense. It’s hard enough to execute core public-sector functions like policing, schools and transit, so why take on the assignment of running  grocery stores? Chicago, at any rate, ended up abandoning the idea.

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None of this has stopped advocates from heralding the concept as “a bold solution for food insecurity.” FoodTank, a self-styled think-tank, claims that city-owned stores already exist in St. Paul, Kansas City and Atlanta. But the market in Atlanta has privately-owned grocery stores leasing city-owned retail space. Another example the group cites, a proposal in Madison, Wisconsin, is actually a plan for the city to develop a parcel to include 150 units of affordable housing, a parking structure and a grocery store. One can debate its merits, but it’s not what Mamdani is proposing.

Mamdani is pitching the government-run stores not as a solution to food deserts but as a cure for high grocery prices. He says the new stores will be “focused on keeping prices low, not making a profit” because “without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers.”

This presupposes that there is a large number of supermarket-shaped buildings that the city either already owns or else could obtain for free. More to the point, if grocery prices are too high because of property taxes, the city could always offer grocery stores a tax break.

To be fair, Mamdani himself seems to be losing faith in this idea. He did not particularly emphasize it during the primary campaign, and when pressed in interviews, he tends to describe it as a pilot programme that he’ll happily abandon if it doesn’t work out. So I don’t think New Yorkers need to live in fear that he will extinguish grocery market freedom.

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But it says something unflattering about the progressive policy world that it supports the concept of public supermarkets as a cure for food deserts despite study after study showing that their presence has no public health benefits. Instead of reacting to this data by abandoning this idea, advocates repurposed government-owned stores as an inflation cure. To be clear, there’s no basis for the belief that a paucity of government-run supermarkets is responsible for high grocery prices.

By resorting to this rationale, America’s self-proclaimed ‘democratic socialist’ movement calls into question one of its favourite conceits. America’s democratic socialists are fond of saying that they are not opposed to capitalism—they are just in favour of a more generous Nordic-style welfare state. If so, it’s hard to see how government-owned grocery stores fit into this model. After all, that’s not how things work in Sweden, Denmark, Finland or any other successful economy. 

Support for government-run supermarkets is a kind of desperate grasp to try connecting a real public concern—inflation—with what really seems to animate this movement: fetishistic anti-capitalism. ©Bloomberg

The author is a columnist for Bloomberg Opinion.