In Defense of Buy Local

This editorial was written in response to an article entitled "The Buy Local Swindle" which can be read at http://younghipandconservative.blogspot.com/2009/07/buy-local-swindle.html (as well as his response to my response).

I am writing in response to Michael Hartwell's June 30 guest editorial entitled "The Buy Local Swindle." I disagree with Mr. Hartwell on a number of points.

First, I think Mr. Hartwell misrepresents the message of the Buy Local campaign. He seems to be saying that "Buy Local" means buy only things made in Portland from Portland businesses. I am not involved in the Buy Local campaign, but a moment of logical reflection and a perusal of the Buy Local website quickly proves him wrong. In fact, the message of the Buy Local campaign is try to buy from smaller local businesses wherever you are. Buy Local is essentially a campaign that favors small businesses over large chain businesses. It does not discourage people from buying products from other regions and countries. It simply encourages people to buy those products from local businesses (such as Italian food from Micucci's). Finally, it does not discourage people from buying successful and popular products (such as the music of the Beatles), but again, encourages that those products be bought from local businesses.

The basis of Mr. Hartwell's criticism of the Buy Local campaign, aside from the above misrepresentations, is classical economic theory. Classic market economics holds that specializing and trading is more efficient than each region producing their own products for local economies and leads to greater overall wealth. There is also the factor of size, since larger companies have greater bargaining power to buy in bulk, and to roam further in search of cheaper resources and labor, allowing them to pass on lower prices to consumers. All of this is true, and it is a very elegant system for producing greater overall wealth.

The problem with the theory is twofold. First, the above definition of "wealth" encompasses only monetary wealth, and leaves out a number of things that are very important to human well being that the market theory actually diminishes. The market theory carried to its logical conclusion results in fewer and larger companies, a high degree of specialization of individuals, a high degree of specialization by region and country, the concentration of power, entrepreneurship and creativity at the top of those large companies, and homogenization of stores and products. Very efficient, resulting in lower prices and higher overall wealth, but not very fulfilling to the human needs of creativity, individuality, free will and culture. We can see this theory in action by looking at any of the large box stores. Big, drawing resources from whichever country produces it cheapest, each person within the company performing a narrow and specialized role, very few of those people having the opportunity to practice entrepreneurship or creativity, and products and stores that are the same whether in Maine or Minnesota. When these stores nudge out our local businesses, we lose the character of our towns and regions, the opportunity to be entrepreneurs and creators, and the more even distribution of wealth and power that comes with more small businesses. We gain a higher overall GDP, and of course cheaper products. I'm not an economist, but that sounds like a bad trade to me.

Second, there are no guarantees within the market system of how the greater overall wealth gained will be distributed. In fact, there is an inherent tendency for the greater wealth to be distributed unevenly so that most of the wealth goes to a few, while the majority are actually worse off. As companies get bigger and fewer, there are less and less owners, and more and more workers, thereby concentrating power at the top of these companies. The more power and money that is concentrated in the hands of the few owners of these companies, the more power these companies have to influence our government to make policy that further benefits them, further concentrating power, ad nauseam. There are many examples of this in American politics, but that would be another editorial altogether.

Obviously there's a problem with the classical market theory. Either it is a very elegant system that simply does not give us a result that fits human needs, or it is a system that needs to take more factors into account to produce a result that leads to greater human well being. I am not sure what the answer is, but what the Buy Local campaign is doing is essentially the latter. Buy Local is advertising to consumers a hidden benefit of buying from small local businesses, and a hidden cost of buying from big chains. It is taking a cost that has been "externalized," to use the language of economists, (i.e. the cost of losing our local character, independence and creativity) and internalizing it, so that when people go to a big chain, they might realize that the price they're paying is actually higher if they take into account the loss of those values. On the flip side, it is internalizing a benefit, so that when people go to a local store they might realize they are actually getting more for their money by helping to preserve those values. It is a little unusual in that it is not the businesses themselves doing the advertising, but a non-profit seeking a societal goal that happens to benefit these businesses. Nonetheless, it is in essence advertising, and as such fits perfectly within Mr. Hartwell's market system.

Just because the market system is an elegant and logical way to create greater overall wealth does not mean we have to check our brains in and follow that system wherever it may lead. People have the power and the right to step back and think about what they truly value, and demand that the systems we use serve those values. Mr. Hartwell would have us sacrifice those values to the system. Buy Local simply asks that the system serves the values.