The Economist has an article in this week’s issue about the “Buy Local” movement, in which three reasons for buying local are put forward:
- A “character” argument: “local and independent businesses have more individual character” and “are owned by your friends and neighbours. ”
- An environmental argument: “it takes much less carbon to haul a truck from a few towns over than from halfway across the country. ”
- An economic argument: studies show that “locally-owned businesses put about twice as much money back into the community as the chains do.”
I can understand the first two as valid reasons to buy local, but I question the third. No doubt there is a short-term economic boost to a particular community if people start buying local, and part of this may come from locally-owned businesses putting more money “back into the community.”
But it seems to me that the inevitable response will be that other communities start buying local, too, which means that the first community loses a portion of its “export” markets. On balance, I don’t think we are better off with an economy characterized by lots of small, regional markets that don’t trade much with each other.
via International Economic Law and Policy Blog by Simon Lester on 8/7/09