Why, How and Who to “Buy Local”

Highland County, Hillsboro and Greenfield should all be motivated by the pleas to “buy local”. Money makes an economy churn. People must make choices about how to spend their money, a place to live, food, and transportation. Few choices are all-or-nothing decisions: they usually involve getting a little more of one thing by giving up a little of something else. That is the key to localism; the meeting of local needs in an economy with the intermediation of local money.

Go to the grocery store and use a dollar to buy something. What happens to the actual dollar? The store will give it out in change to someone else, who will use it to buy something from a different store. That store will then give the same dollar to another person who will go to a third store, and so on. Over time, the same dollar bill can be used over and over to grease the wheels of commerce. Our community does not have enough of this “dance of the dollar”. It needs more money in circulation to be reused a number of times.

Locality Economics assumes that people’s wellbeing is related to that of their friends and community. Like classical economics, it assumes that people maximize their welfare. Unlike classical economics, everyone’s well-being is uniquely dependent on their concern for community, so that wealth is less dependent on what one has accumulated, but by how one’s actions have affected the community. It’s better to tell your money where to go instead of wondering where it’s gone.

The health of any economy is directly related to the amount of business transacted. The more production, buying and selling, the healthier and the happier we all are as a community. When people shop locally for goods and services, the money kept here can employ other people. Moreover, business growth will encourage the development of other businesses. During such an expansion, production, income, employment and trade all increase. Life gets better. Merchants support the building of a railway line to help distribute products and bring new goods. Over time, we will become wealthier. As a result, we pay more taxes, which allows the town to build roads, schools and utilities.

Obviously, this is a simplistic example, and our world is filled with people and companies in the pursuit of your money with no social obligations to encourage responsible conduct. So “buying local” is a two-sided coin. To keep the dance going, increased income should translate to increased production and employment and local shops should do their best to lower prices. McDonald’s has the simple, yet efficient, policy of charging you exactly as much as you will pay: or rather, as much as the average buyer in that location will pay. This explains why McDonald’s prices are different all over the world, and within the country. McDonald’s guarantees that its food products will taste the same all over the world not cost the same. This is what capitalism is all about. Ask yourself what you want your money to do for you.

Businesses also must buy locally. Money spent locally needs to stay in the community.  Local businesses must strengthen and maintain positive relationships in the communities they service beyond charity and taxes. Ask local owners about their local connections keeping money in Highland County. Ask your bank.

Local government must have “buy local” responsibilities, but they need our support. Municipal owned or operated facilities and services such as water, transport, power and garbage pickup and using local business for contracted services have the biggest impact, but could cost more. Local government should use eminent domain to take privately owned, derelict properties for the purpose of economic and community development. A public tram to navigate through the community will encourage business access and growth. These purposes of tax money mean your money stays here with these investments and changes.

Local organizations and charities and individuals should also focus on building our economy. Please have vegetable, good used clothing and household goods swaps to ease financial burdens by making our community more affordable. Similarly, the creditworthiness of individuals, businesses and local government wanting to build community businesses cannot only be underwritten by institutions such as banks. Now we need community organizations involved in a process of “investing” into community growth using nonprofit “community managing partners” to provide strategic assistance beyond financial contributions.

Final thought, look around. Things are grim. We seem paralyzed to alleviating the suffering of victims slipping into poverty or declining county revenues and our sluggish growth. We cannot keep corporations from outsourcing jobs. We can do little about the growing gap between rich and poor and the “that’s not my problem” attitude everywhere. Less money being made, will lead to a return to smaller communities that depend on each other. It’s happening in Greece where the financial crisis is worse. Let’s not wait; finding ways to help our money circulate locally is saving our piece of community.

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