The Inexorable March of Creative Destruction

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In Retreat, Sears Set To Unload Stores

- The Wall Street Journal, Feb. 24

Retreat need not mean surrender. Still . . .

In 1886, a shipment of $25 watches from a Chicago jeweler was rejected by the addressee in Redwood Falls, Minn. The jeweler offered to sell the undeliverable goods for $12 apiece to a railroad station agent, who could then sell them to other agents, of whom there were more than 20,000. Which is what the agent, 23-year-old Richard Warren Sears, did.

Soon his watch business was booming, so he quit working on the railroad, moved to Minneapolis, then quickly to the nation's railroad hub, Chicago, where in 1887 he met Alvah Curtis Roebuck, a watchmaker and printer. Rural life and retailing were about to change.

As the late Daniel Boorstin explained in "The Americans: The Democratic Experience," Sears and Roebuck were on a trail blazed by Aaron Montgomery Ward. After a few years as a dry-goods salesman in the rural West, in 1872, the year after the Chicago fire, Ward, then 29, rented a 12-by-14-foot loft over a livery stable there and began a mail-order business. In two years his single price sheet became an eight-page booklet, then a 72-page catalogue, with woodcuts illustrating most items. The 240-page catalogue for 1884 listed almost 10,000 items.

Hitherto, the goods most Americans bought - things they could not make for themselves - were items they could handle and examine, sold by people they knew. Now they were enticed to buy unseen goods from distant strangers.

The name Sears, Roebuck and Co. appeared in 1893, and the catalogue was the company's shop window, store counter and salesman. The Big Book - by 1894 the catalogue had more than 500 pages - became second only to the Good Book in American life. By 1903, Sears had its own printing plant. There were 1 million copies of the 1904 spring catalogue, 2 million the next year and more than 3 million of the 1907 fall catalogue. All this depended on government in the form of the post office's RFD - rural free delivery.

By the middle of the 20th century, Sears, Roebuck had come to town as the nation's largest retailer, with stores that defined many towns' downtowns. But in Bentonville, Ark., Sam Walton had an idea for bigger stores on the outskirts of towns. Sears has become a casualty of Wal-Mart's retailing revolution.

Today new mothers sign up at Amazon Mom for regular deliveries of diapers. This is a 21st-century permutation of an innovation in long-distance commerce that began in 19th-century Chicago.

Creative destruction continues in the digital age. After 244 years - it began publication five years before the 1773 Boston Tea Party - the Encyclopaedia Britannica will henceforth be available only in digital form as it tries to catch up to reference Web sites such as Google and Wikipedia. Another digital casualty forgot it was selling the preservation of memories, a.k.a. "Kodak moments," not film.

America now is divided between those who find this social churning unnerving and those who find it exhilarating. What Virginia Postrel postulated in 1998 in "The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise and Progress" - the best book for rescuing the country from a ruinous itch for tidiness - is even more true now. Today's primary political and cultural conflict is, Postrel says, between people, mislabeled "progressives," who crave social stasis, and those, paradoxically called conservatives, who welcome the perpetual churning of society by dynamism.

Stasists see Borders succumb to e-books (and Amazon) and lament the passing of familiar things. Dynamists say: Relax, reading is thriving. In 2001, the iPod appeared, and soon stores such as Tower Records disappeared. Who misses them?

Theodore Roosevelt, America's first progressive president, thought it was government's duty to "look ahead and plan out the right kind of civilization." TR looked ahead and saw a "timber famine" caused by railroads' ravenous appetites for crossties that rotted. He did not foresee creosote, which preserves crossties. Imagine all the things government planners cannot anticipate when, in their defining hubris, they try to impose their static dream of the "right kind" of future.

As long as America is itself, it will welcome the messy chaos that is not really disorder but, rather, what Postrel calls "an order that is unpredictable, spontaneous, and ever shifting, a pattern created by millions of uncoordinated, independent decisions." Professional coordinators, a.k.a. bureaucracies, are dismayed. Good.

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