Where's the productivity dividend promised by technology?

Washington

WE are in the throes of another round of what the economist Joseph Schumpeter memorably called "creative destruction". Two icons of American business - Macy's and Sears - are struggling. Macy's plans to close 100 stores to improve profitability, and Sears has sold its Craftsman tools line for roughly US$900 million to raise cash. Conceivably, one or both of these historic chains could go bankrupt.

Their distress is part of a larger consolidation of retailers under siege from e-commerce. The Limited is closing all its 250 stories. Kmart, owned by Sears, is shutting dozens of stores. This is a rough process for workers, managers and shareholders, but it holds out the promise of improved business efficiency, aka productivity. The most inefficient stores will shut; the survivors will be more viable and stable.