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That the state should provide incentives for individuals to buy local

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6079_Smith_W6079_Smith_W (PRO)
THESIS: The benefits of local purchasing for the constituents of most governmental jurisdictions are sufficient to warrant some moderate and rational incentives. 

Wikipedia defines local purchasing as "a preference to buy locally produced goods and services over those produced farther away. It is very often abbreviated as a positive goal, "buy local", that parallels the phrase "think globally, act locally", common in green politics." [1]

Traditionally, the natural incentives to prefer local goods and services were so manifest that governmental intervention was unnecessary: fresh food tasted better, local coal and timber was cheaper than imported energy, local manufacturers were a source of jobs and a badge of local pride.  The rise of the global economy has changed this dynamic significantly, bringing efficiencies of mass production, mass transportation,  mass marketing and cheap labor on a scale undreamt of by prior generations.  

This argument does not deny or denounce these efficiencies: the global economy has its perils but its potential for human progress is manifold. This argument holds only that efficiency is a careless god, with little regard for human values, communities, habitats, human histories and human futures.  The efficiencies of the global economy must be balanced by opposing dynamics of ecological sustainability, moral continuity, and communal prosperity.  Local purchasing alone won't offset the surging homogenization of globalization but to the extent that local purchasing does provide one offset, one measure  of ballast to counter the global tide, state incentives may serve to promote the public welfare. 


Globalized services tend to quickly devolve to a short list of providers, monopolizing markets and decreasing competition which in turn supports increased prices.  

Take for example, pharmacies in the US, where just two chains, CVS and Walgreens, control 50-75% of the 14 largest American markets. [2]

That's in spite of studies showing that local, corner pharmacies provide superior service at competitive prices. A 2016 Consumer Reports survey rated independent pharmacies as superior in most aspects to any major chain. [3]
The big companies no longer need to compete, relying on superior advertising budgets and market dominance alone.  By providing incentives via tax breaks and local marketing, local governments could help some independent
pharmacies survive, forcing the major chains to compete by improving their service or decreasing prices. 


Yes, there is often utility in going into a 7-Eleven or a Walmart anywhere in the US knowing exactly what products you'll find there. But what about the products you didn't know you wanted?  Have you ever delighted in visiting a small mom & pop store and trying some brand of candy or soft drink you've never heard of before and would never find in a major chain?  The product may be better or worse, but novelty is its own reward. And novelty is hard to come by in the homogenized sameness of the chain superstore. 


Although the local farmer's market may overstate the case, there are some obvious environmental advantages to local production. Local products generally require less energy to transport & store than products shipped or flown in from afar. Local factories are less likely to pollute when their most likely customers are downriver or downwind.  Recent price reductions have made local clean energy solutions like wind & solar attractive substitutes for our current network of pipelines, refineries, coal mines, etc. & their accompanying health problems, oil spills, wars in Middle East, etc.  A 2015 report by the National Bank of Abu Dhabi found that "even at $10/barrel for oil, and $5/mmbtu for gas, solar is still a cheaper option." [4]

States that invest in local renewables today are likely to realize real competitive advantages in terms of infrastructure, skilled labor, & reduced energy costs as fossil fuels pass peak production & decline. 


Nor is energy the only market in which governments would benefit from increased investment in local production.  Global markets are unpredictable and rife with single points of failure.   53% of the world's 4 major food staples must pass one of 3 major choke points.  [5] Consider the impacts if a hurricane made the Panama Canal impassible for six months or if civil war closed the Turkish Straights.  


Even if local economies can't compete with global markets in price or quality, doesn't it make sense to produce some essential goods close to home as a prophylactic against unanticipated shortages?  Such long-term planning is a particular jurisdiction of good governments who would do well to invest in some local redundancy. 


Smaller, local companies tend to make more efficient use of existing infrastructure while national or international retailers tend to require new construction, roads, &  utilities. One report studied retail development in 8 Ohio cities for six years and found that highly sought after big-box retailers created a net annual loss of $0.44 per sq ft. [6]. Another study in Massachusetts found that big box stores, malls, & fast food chains were generally a net drain on the local budget while the small, independent retailers provided positive tax revenues. [7]


The homogenized approach of mega-retailers has obvious advantages in efficiency but there's only one way to make a Big Mac to ensure that everywhere everyone goes, Big Macs are always the same. But a Big Mac maker is no chef- fry cooks can't experiment with new recipes & ingredients. A McDonald's employee can't make a new sandwich to see how it sells. Small, local businesses are far more flexible than corporate culture.  


One of the advantages of inefficiency is job creation. Small businesses need more employees to produce than large.  Yale economist found that in times of high unemployment, small businesses create and keep more jobs than large firms do. [8]. Small businesses also tend to offer better wages & benefits for the same work than large companies. A study of 3,000 US counties found that those with a larger proportion of small, locally owned businesses demonstrated better per capita income growth, counties with more large, non-local business saw per capita income declines. [9]


Obviously, if all employees work locally than a greater percentage of money made is spent locally.  British Columbia found that for every million dollars in sales, independent retailers generated $450,000 in local economic activity, compared to just $170,000 for chains. [10]


There are many more, less tangible advantages to buying local: decision-making that reflects community mores, businesses that adopt local history and character, businesses that create new local culture & identity.  Global economics can't encompass such intangibles but they often the key to success in the global economy. 

Globalization doesn't need to be the evil monoculture some anticipate, but globalization ought to be balanced by continued support for local business, local culture, local practices by locally-minded governments. 

I look forward to Con's argument.  Please find references in notes. 

Return To Top | Posted:
2017-08-07 11:04:24
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