Local purchasing

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.

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) 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."

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 loss. 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 localism
• Energy economics
• Community-based economics
• Eco-communalism
• Local food
• Local currency
• Comparative advantage
• Small business

External links

• The American Independent Business Alliance, a non-profit organization devoted to advancing local purchasing by helping North American communities establish Independent Business Alliances.
• 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.