I was recently in a dollar store where everything in the store has a price of one dollar or less.  I bought 17 items.  With sales tax, the total was 18 dollars and change.

I bought a few things for Christmas like boxes and tape, a few toys, some plastic utensils (for those moments when the dishwasher is full and you are short on time), and a bunch of other random stuff.

I have a few thoughts on my shopping experience and the whole dollar store concept.

First, it simply amazes me how so many things can be priced at a dollar.  While some of it may be junk, it is still inexpensive junk.  But a lot of things are quite useful.  And even if some things don’t have great longevity, you are still only paying a dollar.

I bought a stapler there because I couldn’t find a little one that we have at home.  I just need the stapler for a little project with my kids.  It really only needs to last a day.  Even if it is a cheap stapler, it is really incredible that anyone could sell a new stapler for a dollar.

This just shows that we live in an advanced civilization with an advanced division of labor.  I would never be able to make a stapler or anything close to it.  I don’t know if anyone could.

It reminds of the little story called I Pencil by Leonard Read, first published back in 1958.  There is nobody on earth who could make a pencil from scratch, yet they get produced all the time.  And not only does the division of labor make it possible, it also eventually makes it inexpensive for others.

This leads me to my second point about the dollar store.  It is a great benefit to the poor.  We hear about government welfare and even voluntary charity, but it is really dollar stores and the like that keep people out of absolute poverty.

I don’t typically buy much in the way of food at the dollar store, but if you are poor and really in desperate need, you can always go to the dollar store and get a decent amount of food for just a few dollars.

While I am not a regular at the dollar store, I saw a few people in there with carts full of stuff.  They were buying food and household supplies.  I don’t know if they are poor or just really frugal, but how great is the dollar store for these people?

My third thought about dollar store shopping is just how productive the free market really is.  In spite of huge inflation by the Federal Reserve, the market is still able to keep production high enough and cheap enough to keep many things priced at a dollar.

Here is a whole store full of items that are priced at a dollar or less.  Despite all of the roadblocks by government and despite massive monetary inflation, the market still finds a way to function at a high level.

This leads me to my final thought about the concept of a dollar store.  Will the Fed overwhelm the market at some point and make dollar stores extinct?  While the free market is really amazing and resilient, it is possible for the government and the central bank to overwhelm it.

You will know that the Fed’s monetary inflation is outpacing the market’s ability to produce when the dollar store ceases to exist, or at least exist in its current manner.

It might become the two-dollar store, or eventually the ten-dollar store.  Who knows how bad it could be?

I think this will be a good test in the future.  If dollar stores are able to continue to exist and price everything at a dollar or less, then the market is still able to function at a high level.

If dollar stores go out of business or start pricing items above one dollar, then you will know that the Federal Reserve is overwhelming the market’s ability to produce at a high level.