More on malls

In Slavenca Draclic's excellent book "Cafe Europa", the author describes an Albanian man who sits by the road, trying to sell one banana. His idea of economical progress is to get this banana sold, so that he can buy two bananas tomorrow, sell them the next day to buy three, and eventually becoming rich. This is not what street vendors look like i today's Bulgaria, but when you see some of them it is not difficult to imagine the scene that Draculic describes.

For Draculic, the banana selling man is a sad illustration of the void Albania fell into after the fall of commuism. That is not the way people get rich. (it is definitely not the way that today's rich Bulgarians made it). But that this banana selling man would be a perfect illustration to a book about classical liberal economic theory, like Adam Smith's The Wealth of the Nations.

These theories have a lot of flaws, but the crude economical life in the Balkans show that there is some truth in Smith's and his peers' philosphy. I have seen few places in Europe where Neo-liberalism has been carried out so consistently as in Bulgaria. What is more important, capitalism here began from a kind of tabula rasa that is the starting point for Smith's theories but has never existed in a country like Sweden.

Weak demand, poor customers and lack of capital have forced the Bulgarian market economy to develop into a small scale capitalism. Some might call this backwardness, others might say that is natural at this level of development, but it nontheless have some very positive sides for the customer. Bulgaria is sometimes like a capitalism with a human face - you buy the goods from the person in front of you, not merely have them handed over by a disinterested employee in a multinational corporation. That is not always nice, human face can laugh, cheat and be angry. A multinational corporation is always couldn't care less, even though they employ the best minds of our genereation to convince you that they do.

I have written about the Bulgarian malls before (here and here), but I have proably not understood them properly. In an earlier post I wrote that what is sold in the malls is not more expensive than what you can buy in the streets. This is true to some degree, but as a matter of fact stores in the malls are more expensive than most stores in the normal shopping street, while they are cheaper than the more eclusive stores on Vitosha Bvd. for example.

Mark my words... "THE stores in the malls are cheaper than MOST malls in the street". What is really significant about the malls is not the price, because next to the amazingly expensive Bennetton, there is always a Zara with a 50% discount, and a Kenvelo where clothes, at least for male clients are cheaper than anywhere else. In the street, on the other hand, there is still a myriad of small shops, with different kind of goods like hand made jewellery or more or less hand made clothes, different prices etc. This is exactly how capitalism looks in the school books, but the reality in capitalist countries differ.

This kind of stores hardly exist in Sweden. In stead you find the same stores in every town: H&M, Dressman and MQ for clothes, Cervera for kitchen utensils, Claes Ohlsson for tools etc. Interestingly, deragulation has done nothing to increase the number of small stores, rather opened up markets for international brands. The same brands, and the same prices everywhere. When small stores exist they position themselves as more expensive boutiques.

The economic reasons for this are obvious - it is difficult to sell clothes cheaper than H&M, tomake them by hand in Sweden is not realistic, and the rents in central commercial areas are expensive. The housing bubble has probably made them a lot more expensive.

What the entrance of malls in the Bulgarian economy really represent is this kind of Brand Capitalism, as I know it from home. In every Bulgarian town there will be a mall, with the same brands and the same prices. There are nice things in the malls, of course, but I think many find it more interesting to visit the smaller stores, where chances are you might be dissapointed or positively surprised.

The prices of commercial space in Sofia and other East European capitals have sky rocketed in the last years, and there is probably quite a lot of pressure on smaller entrepeneurs. In addition to existing malls, many new malls are projected It will for sure turn some of the current entrepeneurs into disinterested employees in multinational corporation.

Still, I can't see malls completely erasing the small scale capitalism, still visible in every Bulgarian street. Not all small scale vendors are nice, of course, and we could wish that the malls outcompete the crooks among them. But unless Bulgarian shopping habits, values change drastically I think people will support their local traders. You simply feel so much more important as a customer, when the the shop owner depends on your money to survive the day. Kenvelo does not.