Buy local, support poverty
There’s a widespread myth among consumers that buying locally is good for the economy, the environment or both. Despite its charming appeal, it is neither. Worse, producers will do their best to make sure you’re never any the wiser about it, writes Ivo Vegter in this excellent article from The Daily Maverick.
IMAGINE A WORLD in which you bought everything locally. Your food comes from your own garden, or from small farms on the outskirts of your town. Your household implements come from local potters and blacksmiths. Your furniture is made in the joinery down the road, from what’s left of the forest behind town. When you’re sick, you visit the only doctor within a day’s travel, and when you need a loan to pay for it, you go to see your father’s banker, because he’s the only banker you know. When your locally made vehicle needs a service, you use Local Joe’s Towing, Repairs, and Used Wagon Sales, because Local Joe is the only wagon mechanic in town.
If this world sounds strangely familiar, it is because we all know this world from our common history. The world once did look like that. We called it the Middle Ages.
Thing is, during the Middle Ages, unless you were one of the very few people who were born into nobility, you were likely very poor. And even if you were lucky enough to be among the land-owning gentry, you’d still have a life expectancy on the wrong side of 40, bury half your children before they’re five, lose your limbs to gangrene, and die of tuberculosis.
The world is a different place today because trade has made it so. Merchants brought the best goods at the best prices from far away to your local high street. You could find the best doctors, lawyers or wagon mechanics from all over the realm, and eventually the world. Trade created what we know today as the middle class.
There are several reasons trade has had such a tremendous impact on human prosperity, or quality of life.
The revolution in transport, from human-powered to animal-driven to motorised and even airborne travel has given us the ability to buy from further afield. More choice meant better quality and lower prices, depending on our desires and our means.
In turn, this created competition among producers to set up their operations where they could find the best combination of resources, labour and infrastructure, in the hope of serving customers better than their rivals. Advances in technology both spurred, and were spurred by, this rise in competition. There is little reason to automate a task if you can’t find more buyers in your local town. If you can reach the world, however, then every task done slightly faster or slightly cheaper constitutes an improvement to your product, a blow against your competition, and a rise in prosperity for both you and your customer.
The ability to draw on a larger pool of people has made more efficient division of labour possible. Instead of doing one’s own books, or working as a specialist bookkeeper but only having enough work at month-end, we can now hire entire firms that specialise in accounting. Local Joe can now focus on what he is best at, and a combination of competition and economy of scale raises his quality and lowers his costs.
Trading increases our wealth, because it enables us to produce (or procure) more for the same amount of resources, or the same amount for less. Our time, money and skills either go further, or what we save can be redeployed elsewhere to improve our standard of living.
Why, then, do we expect that reversing this trend – as the “buy local” fad encourages – will have positive effects?
Advocates of buying local say that doing so saves resources that otherwise would have been devoted to transport, and that it sustains local jobs. This may be true in isolation, but these supposed benefits come at a cost.
Henry Hazlitt, in his must-read book, Economics in One Lesson, points out that “the art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
Buying local means to refuse a product that is better, cheaper, or both, simply because it isn’t made here. (Otherwise, you’d buy it anyway, and few advocates of buying local will be consistent and refuse to sell to buyers from out of town.) Unless a product’s origin is an intrinsic part of its value, however, choosing a more expensive or lower quality product just because it is local wastes resources instead of saving them.
There may be good reasons for buying local, such as freshness or a personal relationship with a producer, but saving resources is not among them….
The Daily Maverick: Read more
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