11 Comments

Ironically, I came across a story where the only Costco in NYC is dealing with a serious shoplifting problem, likely the only Costco to do so. Figures that it's NYC.

https://www.youtube.com/watch?v=C_10mUjGD7A

Expand full comment

When I was younger, I read the dystopian novel “Jennifer Government” by Max Berry (Jennifer Governmenthttps://a.co/d/01af3wbc). The premise is that everything has been privatized, including police and various conventionally public services. But the interesting aspect is the alliances between various companies that allow people to use services in a membership fashion. At the time, I was focused on the privatization of government services but now am interested in the membership and alliance aspect of the companies. I think that will start to happen. If you have a Costco+ membership in conjunction with Midas, then you can use either service. If you act up in either company, you’d be kicked out of the other ones as well. It will force a certain level of behavior and shopping habits.

I think of other well run institutions that require memberships (or at least emphasize them): swimming pools, country clubs, museums, schools, etc. The membership and the agreement to certain standards definitely selects for more responsible and put together people. It also allows the workers to point directly to the code of conduct the members have already signed rather than their own rules (which they would still have the right to enforce).

Expand full comment

It's interesting how everything happening today was foreseeable in the distant past. If there's any lesson during our current time, it's that the reactionaries are right in the end. Barriers exist for a reason. Inclusivity works with more homogeneous societies. But heterogeneous societies require far more policing and fine-tuning to maintain. The liberals have spent (wasted) so much of our time and money trying to tell us that it's possible to have the benefits of a homogeneous society in a heterogeneous society, but they never were able to explain how or why. We were shamed and browbeaten into believing it. It's a powerful lie, I'll give it that.

One of my themes in my messaging, both from a prepping standpoint and with regards to the future of our civilization, is that whatever society we live in, we need to live in accordance with reality. America's great abundance allows us to live by lies, but it's in an environment of scarcity that the need for barriers and rules becomes apparent. I think people are generally more satisfied with their lot as long as it all makes sense. So much of life in the West doesn't make sense, thus explaining the deep dissatisfaction many harbor, despite such a high standard of living.

Expand full comment

It reminds me of that perennial quotation from Chesterton, "Don't ever take down a fence until you know the reason why it was put up." The saying goes for so much in life with the assumptions that we think will be in place forever (or don't notice) until they are removed and all hell breaks loose. Take simple anti-loitering laws. They never made sense to me growing up. Why would we need a sign or a local law forbidding people from milling about? I was always on the move and had things to do, so standing around seemed pointless. I never imagined that people would loiter, harass, intimidate or threaten random passerbys like they do now that anti-loitering laws are not enforced. We will need more formal and strictly controlled laws/standards for membership as our culture breaks down and low-trust elements swarm in to take advantage of our previous assumptions on rule-abiding and etiquette.

Expand full comment

I speak often about life in Latin America. By no objective standard is life better south of the border. And yet, you don't see anarcho-tyranny down there, either. As violent as these countries can be, there exists order. The lines are well-established and as long as you don't cross those lines, you'll live. In America, we've come to see lines as something for bigots, but what's a civilization if not a series of lines?

Expand full comment

Things are a lot quieter on the whiteopia of Vancouver Island.

And the author of the Atlantic article is a white woman with a pretentious name: Xochitl Gonzalez. Bet she has little or no Aztec ancestry.

You can see her picture here:

https://en.m.wikipedia.org/wiki/Xochitl_Gonzalez

Expand full comment

"Her parents were activists in the Socialist Workers Party, where her mother was a union organizer who ran for office in the Socialist Workers Party."

Oh. What. A. Surprise.

Expand full comment

I have a confession to make: I am a Costco freeloader.

Years ago when I was working in Honolulu, I earned the minimum wage and couldn’t justify spending an extra $60 per year. However, my roommate had a membership, so we researched ways to allow me in as a guest. Turns out, you can add somebody to your standard membership provided you live in the same household, so that’s what we did. No extra fee, and they issued me a card under my roommate’s account number once I proved my address.

I haven’t spoken to this guy in seven years, and still I’ve never had to pay the fee, lol.

The membership is absolutely worth the benefits, even when you don’t get it for free. I think it helps too that Costco’s clientele is more business savvy than the average consumer: they run small businesses, they have large families, they’re more likely to live in the suburbs, to have more capital, etc. Not to mention the membership model incentivizes people to do all of their shopping under one roof, so I imagine you get a higher proportion of big transactions—televisions, Christmas trees, cruise ship packages, etc.—rather than a bunch of more modest transactions.

I have zero complaints about how Costco is run. I’m amazed to this day that the hot dog and drink combo remains at $1.50 (unchanged since the 1980’s!) and the rotisserie chicken is still only $5, even in Hawaii. They absolutely lose money on those items, yet it’s part of their cultural identity to keep them unchanged.

I never really thought of Costco’s membership model as having benefits re: shoplifting prevention, but I guess it’s not surprising that you can get better service when you put up a barrier to keep out the riff raff. I’m still not sure how the receipt checker folks at the exits are trained, because I’ve never once seen them closely inspect a cart or detain someone—they just count the number of items in the cart to see that it matches what’s printed on the receipt—but I imagine they look closely at electronics and other expensive hardware.

There must a psychological component to ponying up the membership fee: it reinforces that shopping at Costco is something of a privilege that’s worth preserving through good behavior. I guess the same can be said about gated communities or formal dress codes, but I’m not sure how well the analogy holds…

Expand full comment

You're not the only freeloader, either. I know a person who did that for almost a decade.

The Costco customer is definitely more "upscale" in the sense they're producers, not just consumers. It says something about the future of our society, where going forward there's increasingly going to be a distinction between those who actually create something for economic and society versus people who just get paid and spend money. The former will have access to the finer things in life, while the latter will have less access.

I think the fact that their hot dogs and pizzas are no longer available to non-members is another sign of where things are going. Exclusivity is definitely the future, because inclusivity has exceeded the point of diminishing returns. If it reduces profits, so be it. The important thing is to preserve quality and also somehow shield yourself from the tumult all around us.

Expand full comment

I recall when Costco recently opened in Maine. Quickly I was elated, flabbergasted, and couldn't hide my grin. On the way out of our first visit, after confirming my suspicions, I told my wife.

>"You noticed something in their, about the people?"

<"What, everyone was really happy?"

>"Not just that. No pajamas, nobody screaming, and not a single brown person."

The only time I had see the actual demographics of Maine in a public place is on the border of New Hampshire at the Fryeburg fair. An incredibly rural yearly event.

Expand full comment

Too bad Charlie Munger is dead now because he’ll never get asked the follow up question of, “Then why does Costco still presume everyone walking out of the store is a thief and ask to see their receipt?”

Aside from my petty annoyance at Costco, which is still a great store, this is a pretty good article, Max. Great insights and spot on…

Expand full comment