Why Buying Local doesn’t always work in market economy

For several years now there has been this mantra that conscientious consumers should support local businesses. The main rational is that then the money they spend will stay in this community.

These are certainly well intentioned notions, but neither assertion (buy local, put money into the local economy) holds up under much scrutiny. There are many businesses that are locally based, but no longer just serve the local community. Meijer for example, operates stores in numerous states in the Midwest and the majority of what they sell is not produced or manufactured locally. Meijer stores are intricately tied to the global market and are dependent on a fossil fuel driven economy, neither of which are sustainable.

The notion that supporting local businesses is somehow a more just model also has to do with economies of scale. For instance, if you own a local coffee shop and are not part of a chain like Starbucks, you would be celebrated within the current “local is best” mantra. However, even a locally owned coffee shop is still tied to the global economy, since coffee must be shipped to Grand Rapids from Latin America, Africa or Asia. This means that even a locally owned coffee shop is part of the global and fossil fuel economy. So while it may make us all feel better to get coffee from a local café than a coffee shop chain, it is not all that sustainable and it is certainly not local in any meaningful sense.

The fallacy of localism was demonstrated well in a Grand Rapids Press article that ran on Sunday. The focus of the article was on the global expansion of some West Michigan companies. The article states early on:

“It’s true: Globalization has cost thousands of jobs as some companies sought to lower labor costs and sell into closed markets such as China. But it also is creating a much larger customer base for nimble U.S. manufacturers able to capitalize on a much larger playing field — particularly in niche fields.”

So the rationale is clear, too bad for some workers, but some of our local businesses are thriving. There is also another message in this story as well. If Amway or Herman Miller are sending their products to other countries doesn’t that undermine the ability of local communities in say Colombia to make the same kinds of products that Amway and Herman Miller can make? Doesn’t exporting of basic goods and services abroad contradict the whole support your local business mentally?

The whole article is a celebration of this dynamic in that is cheerleading the increase of products being manufactured in Michigan. The article is a nod to the recent trade agreements the US entered into with South Korean, Colombia and Panama, as well as the idea that trade barriers are bad in general. This is why the Press reporter only cites businesses that export and people like Birgit Klohs, the director of the Right Place Program, a local entity that promotes global capitalism.

The Press article goes on to argue that the new global markets that have opened up for companies like Amway and Herman Miller means more jobs can be created in West Michigan. This is simply another fallacy. In fact, Amway has reduced local job numbers locally, especially after it moved a distribution center to Central America. This argument that is creates more jobs in the long run is also false in that it never acknowledges the thousands of jobs lost to recent trade agreements. According to Public Citizen’s database, Michigan has lost 329,109 manufacturing jobs since NAFTA was implemented in 1994.

Buying food and other products raised locally certainly makes sense, but we have to be careful that we don’t assume that just because a businesses is local that is benefits the local or the global community. In fact, within a capitalist system buying local in and of itself is a dead end. Creating a new economic system is not only what needs to happen, but a new system would truly promote localism.