To combat food deserts in Chicago, the city government is considering opening up a municipal grocery store. The Wall Street Journal recently had a piece about this initiative. In it, Joe Barrett tells the stories of a municipal grocery store in Erie, Kansas, which last year was $123,000 in the red and a municipal grocery store in St Paul, Kansas, which is profitable and has been in operation for sixteen years.

Similar municipal grocery stores exist elsewhere in the country, including in Baldwin, Florida, which was profiled in the Washington Post four years ago. In each case, a generally conservative rural municipality opens up a grocery store because nobody else would and because they feared that not having a grocery store could result in a death spiral of depopulation.

This is the story of a lot of state-owned enterprises (SOEs) in the United States and elsewhere in the world. Governments frequently resort to operating their own enterprises only when the private sector fails.