Local purchasing
Encyclopedia
Local purchasing is a preference to buy locally produced goods and services over those produced more distantly. It is very often abbreviated as a positive goal 'buy local' to parallel the phrase think globally, act locally
common in green politics
.
On the national level, the equivalent of local purchasing is import substitution
, the deliberate industrial policy
or agricultural policy
of replacing goods or services produced on the far side of a national border with those produced on the near side, i.e. in the same country or trade bloc
.
Local economy theorist, Michael Shuman, sums up local economy as a tension between "TINA" (There Is No Alternative), and "LOIS," (Locally Owned Import Substitution).
Historically, there have been so many incentives to buy locally that no one had to make any kind of point to do so, but with current market conditions, it is often cheaper to buy distantly produced goods, despite the added costs in terms of packaging, transport
, inspection
, retail
facilities, etc.. As such, one must now often take explicit action if one wants to purchase locally produced goods.
These market conditions are based on externalized costs, argues local economy writer, Lyle Estill
. Examples of externalized costs include the price of war, asthma, or climate change, which are not typically included in the cost of a gallon of fuel, for instance.
The first potential moral benefit is environmental: Bringing goods from afar generally requires using more energy than transporting goods locally, and some environmental advocates (for instance, Amory Lovins
) see this as a serious environmental threat. Of course, locally produced goods are not always more energy-efficient; local agriculture
or manufacturing
may rely on heavy inputs (e.g. industrial agriculture
) or energy-inefficient machinery and/or transportation systems.
The second potential benefit is creating better working conditions. However, diverting purchasing from developing countries to local farmers can lead to worse conditions for poor farmers in developing countries because it removes potential buyers from the market.
The term “Buy Local” has become subject to varying interpretations. While leading advocates of local independent business such as the American Independent Business Alliance say the term should apply only to locally-owned independent businesses, some campaigns run by governments and Chambers of Commerce consider local to be merely a geographic consideration. Additionally, many corporations have manipulated the term in ways critics call "local-washing."
. This can exacerbate the very problems that "buy-local" advocates are trying to solve, for example, because small local farms require substantially more land, water, and other inputs than do larger nonlocal farms. Moreover, the community as a whole does not actually save money because consumers have to spend so much more on the more expensive local products. . Karen Selick argues that the buying local trend is just a watered down version of protectionism, and would not benefit communities as proponents envisage.
Think Globally, Act Locally
The phrase "Think globally, act locally" or "Think global, act local" has been used in various contexts, including town planning, environment, and business.-Definition:...
common in green politics
Green politics
Green politics is a political ideology that aims for the creation of an ecologically sustainable society rooted in environmentalism, social liberalism, and grassroots democracy...
.
On the national level, the equivalent of local purchasing is import substitution
Import substitution
Import substitution industrialization or "Import-substituting Industrialization" is a trade and economic policy that advocates replacing imports with domestic production. It is based on the premise that a country should attempt to reduce its foreign dependency through the local production of...
, the deliberate industrial policy
Industrial policy
The Industrial Policy plan of a nation, sometimes shortened IP, "denotes a nation's declared, official, total strategic effort to influence sectoral development and, thus, national industry portfolio." These interventionist measures comprise "policies that stimulate specific activities and promote...
or agricultural policy
Agricultural policy
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets...
of replacing goods or services produced on the far side of a national border with those produced on the near side, i.e. in the same country or trade bloc
Trade bloc
A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, are reduced or eliminated among the participating states.-Description:...
.
Local economy theorist, Michael Shuman, sums up local economy as a tension between "TINA" (There Is No Alternative), and "LOIS," (Locally Owned Import Substitution).
Historically, there have been so many incentives to buy locally that no one had to make any kind of point to do so, but with current market conditions, it is often cheaper to buy distantly produced goods, despite the added costs in terms of packaging, transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...
, inspection
Inspection
An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity...
, retail
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
facilities, etc.. As such, one must now often take explicit action if one wants to purchase locally produced goods.
These market conditions are based on externalized costs, argues local economy writer, Lyle Estill
Lyle Estill
Lyle Estill is the author of Small is Possible; life in a local economy, and Biodiesel Power; the passion, the people, and the politics of the next renewable fuel....
. Examples of externalized costs include the price of war, asthma, or climate change, which are not typically included in the cost of a gallon of fuel, for instance.
Rationale for local purchasing
Advocates often suggest local purchasing as a form of moral purchasing. Local purchasing is often claimed to be better for the environment and better for working conditions.The first potential moral benefit is environmental: Bringing goods from afar generally requires using more energy than transporting goods locally, and some environmental advocates (for instance, Amory Lovins
Amory Lovins
Amory Bloch Lovins is an American environmental scientist and writer, Chairman and Chief Scientist of the Rocky Mountain Institute. He has worked in the field of energy policy and related areas for four decades...
) see this as a serious environmental threat. Of course, locally produced goods are not always more energy-efficient; local agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
or manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
may rely on heavy inputs (e.g. industrial agriculture
Industrial agriculture
Industrial farming is a form of modern farming that refers to the industrialized production of livestock, poultry, fish, and crops. The methods of industrial agriculture are technoscientific, economic, and political...
) or energy-inefficient machinery and/or transportation systems.
The second potential benefit is creating better working conditions. However, diverting purchasing from developing countries to local farmers can lead to worse conditions for poor farmers in developing countries because it removes potential buyers from the market.
The term “Buy Local” has become subject to varying interpretations. While leading advocates of local independent business such as the American Independent Business Alliance say the term should apply only to locally-owned independent businesses, some campaigns run by governments and Chambers of Commerce consider local to be merely a geographic consideration. Additionally, many corporations have manipulated the term in ways critics call "local-washing."
Alternative Viewpoints
The argument that 'buying local' is good for the economy is questioned by many economic theorists. They argue that transportation costs actually account for a tiny fraction of overall production prices, and that choosing less efficient local products over more efficient nonlocal products is an economic deadweight lossDeadweight loss
In economics, a deadweight loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal...
. This can exacerbate the very problems that "buy-local" advocates are trying to solve, for example, because small local farms require substantially more land, water, and other inputs than do larger nonlocal farms. Moreover, the community as a whole does not actually save money because consumers have to spend so much more on the more expensive local products. . Karen Selick argues that the buying local trend is just a watered down version of protectionism, and would not benefit communities as proponents envisage.
See also
- Fiscal localismFiscal localismFiscal localism comprises institutions of localized monetary exchange. Sometimes considered a backlash against global capitalism, fiscal localism affords voluntary, market structures that help communities trade more efficiently within their communities and regions.-Fiscal localism:"Buy local" is...
- Energy economicsEnergy economicsEnergy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Due to diversity of issues and methods applied and shared with a number of academic disciplines, energy economics does not present itself as a self contained academic...
- Community-based economicsCommunity-based economicsCommunity-based economics or community economics is an economic system that encourages local substitution. It is most similar the lifeways of those practicing voluntary simplicity, including traditional Mennonite, Amish, and modern eco-village communities...
- Eco-communalismEco-communalismEco-communalism is an environmental philosophy based on ideals of simple living, self-sufficiency, sustainability, and local economies. Eco-communalists envision a future in which the economic system of capitalism is replaced with a global web of economically interdependent and interconnected...
- Local foodLocal foodLocal food or the local food movement is a "collaborative effort to build more locally based, self-reliant food economies - one in which sustainable food production, processing, distribution, and consumption is integrated to enhance the economic, environmental and social health of a particular...
- Local currencyLocal currencyIn economics, a local currency, in its common usage, is a currency not backed by a national government , and intended to trade only in a small area. As a tool of fiscal localism, local moneys can raise awareness of the state of the local economy, especially among those who may be unfamiliar or...
- Comparative advantageComparative advantageIn economics, the law of comparative advantage says that two countries will both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods...
- Small businessSmall businessA small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships...
External links
- The American Independent Business Alliance, a non-profit organization devoted to advancing local purchasing by helping North American communities establish Independent Business AllianceIndependent Business AllianceThe term Independent Business Alliance refers to local affiliates of the American Independent Business Alliance . According to AMIBA's website, "An IBA is a coalition of locally-owned independent businesses, citizens and community organizations united to support home town businesses in a community...
s. - Local Harvest, a resource for the buy local, farm product and other 'alternative market' food, activism, news and event
- BALLE - Business Alliance for Local Living Economies, a network of communities supporting their independent businesses
- New Economics Foundation, case studies and information on the economic impacts of local purchasing.
- Green Fabric, a buy-local-what-was-made-local website, trying to fill the need for a listing of local creatives and producers.
- CISA - Community Involved in Sustaining Agriculture, a community organization of farmers, consumers and professionals working together to sustain agriculture and the unique rural character of western Massachusetts for the past 15 years.
- The 3/50 Project, a "buy local" promotional campaign by marketing consultant Cinda Baxter.