July 3, 2025

Supermarket Socialism

Zohran Mamdani’s proposal for government-owned grocery stores is an idea with a long record of failure.

Zohran Mamdani, the Democratic nominee for mayor of New York, is a foe of capitalism who blames profit-seeking for the high price of groceries in his city. As befits a self-described “democratic socialist,” he proposes to solve the problem by giving government more power.

“I will create a network of city-owned grocery stores,” Mamdani says in a campaign video. “We will redirect city funds from corporate supermarkets to city-owned grocery stores whose mission is lower prices, not price gouging.” Because these stores will operate “without a profit motive or having to pay property taxes or rent,” he claims, they will be able to sell their products at wholesale prices. And just like that, shoppers in New York City will never have to worry about high grocery prices again.

Like many socialist nostrums, it’s a childish idea, one repeatedly debunked in the real world. Government-owned and operated supermarkets, after all, were the norm for decades in the Soviet Union and Eastern Europe before the fall of the Iron Curtain, and more recently in countries like Cuba and Venezuela. Those stores, far from being models of affordable abundance, were notorious for empty shelves, long queues, and a depressing lack of variety.

In 2002, during a trip to Cuba, I stepped into a government-owned food store in Havana. It was a dingy, windowless place where, as I later wrote in a column, nothing was available for purchase except “a couple sacks of rice, a couple more of beans, some oil, and what look like packets of a juice mix.” A chalkboard listed the prices of staples that were supposed to be available. But there was no milk on the shelves, no detergent, no toothpaste, no fruit or fresh vegetables.

For those who grew up knowing only the grim meagerness of socialist government grocery stores, it can come as a shock to encounter the bountiful inventory of American capitalism. In a memorable scene in the 1984 film “Moscow on the Hudson,” a Soviet émigré, played by Robin Williams, is overcome with emotion when he sees all the brands of coffee for sale in a New York supermarket.

American capitalism certainly has its flaws. But as an engine for supplying ample food at reasonable prices, it is unmatched. At the beginning of the 20th century, typical American workers devoted more than 45 percent of their income to feeding their families. By the mid-1960s, they were spending just 12 percent of disposable income to put food on their tables. Today, the average American household needs to allocate only 5 percent of its income to the food it consumes at home.

Mamdani accuses privately owned grocery stores of engaging in “price gouging.” It’s a preposterous slur — so preposterous that I assume he says it not because he believes it to be true, but because he believes it to be politically useful.

Supermarkets don’t “gouge” their profits; they eke them out. Grocery industry profit margins are razor-thin — just 1.6 percent in 2023, according to the Food Industry Association. Prices may be higher in New York City than elsewhere, but that has nothing to do with capitalist greed and far more to do with steep city taxes, a high minimum wage of $16.50 per hour, inflation fueled by exorbitant federal spending, and an epidemic of shoplifting. A candidate who was serious about bringing down grocery prices would be focused relentlessly on making New York safer, its tax burden lighter, and its labor costs more reasonable — not on demonizing private business.

The grocery business is demanding. It calls for agility, constant price and inventory adjustments, and a knack for anticipating consumer behavior. It involves operating on a tight budget, dealing with constant streams of customers, and navigating the choreography of ordering, unloading, stocking, pricing, and replenishing thousands of products, many perishable. Those are not exactly the strengths of municipal bureaucracies. Municipal agencies find it a challenge to process building permits or repair potholes in a timely fashion, and — as has been the case since the days of Tammany Hall — so much of what City Hall touches is distorted (if not corrupted) by politics.

In recent years, a small number of rural towns have experimented with government-owned stores, mostly without success. To imagine that a city as vast and troubled as New York is equipped to own a chain of supermarkets is fanciful to the point of folly.

What Mamdani offers New Yorkers is a fantasy — one in which bureaucrats will accomplish what entrepreneurs cannot and politics will deliver what profits supposedly prevent.

History has tested that fantasy again and again, and the results are always the same: less choice, less efficiency, and higher costs. New Yorkers don’t need Potemkin supermarkets stocked with ideology. They need safer streets, lower taxes, and a mayor whose grasp of economics isn’t limited to socialist slogans.

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