Race and Economics

Andrew Young's statement that blacks have been "ripped off" by stores run by Jews, Koreans, and Arabs has been rightly criticized and he has apologized. But these irresponsible remarks have wider implications than Andrew Young and wider implications than their political repercussions.
For decades, one of the biggest blind spots of most civil rights "leaders" and "spokesmen" for the black community has been their utter lack of knowledge of economics.
As a purely factual matter, prices do tend to be higher -- and the quality of service and products lower -- in stores in low-income neighborhoods. But the knee-jerk assumption that this represents "exploitation" or "racism" ignores the economics of the situation.
Many of the ghetto stores charging high prices are struggling to survive, while supermarkets in other neighborhoods are very profitable charging lower prices. There are many reasons for this.
The reason least likely to be acknowledged by those who blame the store owners is that crime, shoplifting, vandalism, and riots have raised the costs, both directly and by causing insurance rates and the costs of security to be higher in ghetto neighborhoods.
The costs of delivering goods to small neighborhood stores are also higher than the costs of delivering goods to huge supermarkets. Delivering a hundred cartons of milk to a supermarket is cheaper than delivering ten cartons of milk to each of ten local stores scattered around town.


Read the rest of the article by Thomas Sowell.

This principle also applies to the Exxon-Mobile profits decried by so many people ignorant of simple economics, and/or those who have stopped learning after leaving a government school.