What does a local economy mean for Olympia?

This is the second of several posts on Olympia’s local economy. The first is here.

I have raised (but tabled) the problematic issue of whether most Olympians want a local economy,  and noted that a significant number of us think that “local” is by some measure superior to other possibilities, including what we currently have. In this post, I’ll explore what a local economy might mean and why we might want one. Policy suggestions should come only after a clear understanding of what it is we’re seeking to do.

Before commencing, a simple admission: existing market mechanisms as we currently understand them will continue to arbitrate our consumer and producer relationships whether the business participants are local or national. Even if there were a strong movement for shutting out the national chains and non-local businesses, or introducing a new currency, people would still buy and sell their goods and services pretty much as they do now, because we all rely on that market culture. That culture may conceivably change to reflect our changed circumstances. Perhaps we’ll begin to see and understand new, unforeseeable options as we gain a better understanding of how we might reach our social and economic goals. Conceivably, the implications of that culture might simply come into much clearer focus, and that might allow our expanded vision to see something we missed earlier.

Let’s begin by examining everything around where you are sitting. Continue with what you live in and eat. Consider how it got to your computer desk or into your bag. Chances are it didn’t come from Olympia; you may either be relieved or depressed by this. How would your life be different if you only had those things that could be produced within a few hundred miles? I’ll leave it to each of you to decide whether a completely local economy is possible, or even desirable.

Any degree of local implies a spatial limitation: at first glance it seems to mean anything farther than a given number of miles cannot be local; and anything within that limit is. As I wrote in the last post I think defining local in terms of mileage is misleading, even if it were simple to draw the line beyond which things are not local. For example, are we concerned primarily with the license registration for purposes of taxation? The owners’ residences? The business headquarters?  A simplistic line on the map quickly becomes counterproductive. We are probably also concerned (at least I think that people saying “a local economy” are), with where the products and their raw materials are sourced. When we start thinking about this more completely, we’re probably often also implicitly concerned with overall business practices, and we tend to assume that globalized production is likely to be less environmentally sound and less humanly satisfactory. I can’t imagine that most Olympians would like local sweat shops to become the hallmark of our city. (This does make for some interesting questions and tradeoffs. Would we prefer an unsavory local business to an exemplary national one?)

Instead of beginning with spatial limitations, I suggest we examine the benefits of the local economy and then determine what kinds of businesses could bring them. In my view localism is not a place, but a set of values and a commitment to them that the owner tends to exhibit as a result of his location in the same community as his customers.

Let’s look at those benefits of localism. There is a vast library (and loads of material online) for those interested in the theoretical benefits of a local economy to browse. Small is Beautiful is a nice place to start, and The Company We Keep is one of my favorites. Other works, like Herman Daly’s Beyond Growth, widen their focus to sustainable development, which in his view has a strong local current; he generally argues for a massive downscaling in global business practices. In this vein, Bill McKibben wrote a book called Deep Economy which argues that we need to overcome our growth and acquisition fetishes, to realize that as individuals we’re primarily members of a community. Instead of looking for happiness as individuals (which he argues means acquiring things in our society), we should develop as members of a community even if (or more precisely, especially because) that means we acquire less stuff. The void that we cannot fill by acquiring things can actually be filled by becoming better people through an understanding of our mutual dependence. While this sounds like hippy tripe as I type it, Mckibben does paint a compelling picture.

Aside from the abstract social benefits, another common argument for proponents of localism like Sustainable South Sound is that buying locally keeps the money around and therefore creates local jobs. McKibben agrees, citing this study conducted in Vermont, which concluded that “[W]e estimate that Vermont residents and businesses send almost $16 billion annually out of state for goods and services. Remarkably, this means that we are annually exporting the equivalent of $26,538 in cash per person.” Proponents of localism also argue that living locally reduces our environmental impact by reducing the amount of fossil fuel we require to meet our needs and wants. Hence, a local business with a local customer base is more sustainable.

I’m still unsatisfied with the localism concept because these arguments are pretty diffuse even though I agree that the goals are desirable. I think the more important question is why do we care about the distinction between local and global? At the root are two essential deficiencies in modern global business practices that a local economy could remedy: interdependency and transparency. As production and consumption streams stretch out over the entire planet, often wreaking havoc in their wake, these ideals disappear.

All too commonly, neither producers nor consumers know each other. This in turn makes the commercial stream opaque. It’s easy to feel in the dark about how some companies manage to offer extremely cheap products or food. Often this arises from exploitation that we would find objectionable, and the companies responsible go to incredible lengths to hide these production practices. The free and fair trade movements recently are attempts to roll that back. Localism brings those critical relationships back into contact and that’s one reason that we’re interested in it. In the national commercial stream, transparency has been outsourced to regulating agencies. We have ceded our responsibility as consumers to governmental agencies that are subject to the political process and all of the shameless corruption that accompanies it. Is the organic label really a substitute for personally knowing the farmer or business owner? Consider: it would be difficult for a local entrepreneur to create a factory warehouse of illegal child workers from his/her townspeople. Imagine if that happened in Olympia—people would find out and probably do something about it, at least a general boycott. Now consider how easy it is for Olympians to ignore that when they shop at a store that sells products resulting from labor practices that aren’t exactly Olympia-friendly,  simply because they happen hundreds of miles away. What if you could see the beef as cows grazing in local fields? You might even know the farmer, the chicken and the vegetable farmer. When we actually saw sick animals or pesticides being sprayed on our tomatoes, perhaps market competition would do its grim work and eliminate those producers because people would not buy from them.

Likewise, very few global producers actually need any single customer—although a generic computer voice constantly reassures me that a long hold time actually means that “My call is important.” You are all familiar with doing business with someone who doesn’t value your business because there are millions of others who will likely step in should you step out. In this situation, we generally reduce our business relationships to a question of price. (I often think about that when I find myself shopping in buildings that would have dwarfed warehouses of the past. In some cases, the retailer doesn’t even make any bones about the fact that you’re shopping in its warehouse.)

Although interdependence has more to do with scale, it also concerns ethics: if the factory owner lived in the same town as her factory, she might be less likely to pollute the river from which she and her neighbors drink (even if it meant more money). In the other direction, consider a local business owner’s falling on hard times; perhaps the town isn’t as inclined to sit idly by. (See. e.g. It’s a Wonderful Life). In a marketplace dependent on global inputs, these kinds of interactions are reduced to commercial arbitrages where, as Schumacher (in Small is Beautiful) said perfectly: “Economics replaces ethics.” The more either the producer or consumer is in a transparent and interdependent commercial interaction, the more their humanity is likely to force them to rely on their ethics as opposed to their economics, and the benefits of mutual dependence are much more obvious. If this sounds a little too Leave it to Beaver, that’s because businesses were much more local than they are now—before the massive consolidation and centralization that has taken place in the global economy over the last 40 years. The interdependency of a local economy gives people concrete personal motives for supporting each other. Businesspeople need the rest of the local economy to do well so their customers have money to spend. Customers want business people that they know and like to succeed.

There is another regrettable aspect of our nature to all of this. I do not believe that we will ever collectively behave in the ways we think we should unless there are reasons that really matter to each of us personally. General abstract virtues are hard to live up to. My last piece referenced an ethnography which leads me to conclude, much to my chagrin, that even in well-educated and somewhat contrary to the national norms Olympia, we won’t overcome the need to accumulate simply with appeals to our better angels. I’d say we’re at least as connected to the umbilical cord of the conventional, Wall Street dominated, economy as anywhere else—at least we’re no closer to the answer than 99% of the rest of America. (Consider: In Thurston County there are three Wal-Mart’s, two Targets, two Best Buys, two Fred Meyers, three Home Depots, two Lowes, two Costco’s, two Albertsons, four Safeways, and a pretty stale, Westfield-owned cookie cutter mall that is packed to the brim for at least two months of year. I’m not going to try to count up the McDonald’s, Burger King, and other national fast food chains. Most of this is funded by a global banking system and facilitated by plenty of non-local professionals.) I don’t say this to criticize our goals, but to illustrate the precipitous climb before us.

Olympia’s business community is somewhere between global and local in the overall global spectrum.  Its two extremes are: complete local self-sufficiency on the one hand and complete dependence on the global marketplace on the other. In a completely self-sufficient economy, all human needs are met locally. On the other end of the spectrum is the global marketplace, which satisfies our needs in exchange for the money we send back into the stream of commerce. Our economic interdependency and the accompanying virtues we associate with a “local economy” are also somewhere between our ideals and everything people have in mind when they complain about strip malls or Wal-Mart or everything for sale being from China.

We’ve uncovered a few concepts here that we’ll continue to explore: Olympians want to move closer to the local end of the spectrum, which implies more transparent and interdependent businesses than current global business practices and regulation allow. Existing market mechanisms would facilitate and reinforce locally desirable businesses should production practices become more transparent.

As I hope you’ve noticed, I am taking a very circumspect look at Olympia’s proposed local economy. I think people here want a local and sustainable (in both uses of the word) business environment. However, we have not thought about it as comprehensively as I believe it requires. Through a critical examination, we should try to get clearer about why we want to move toward the local on that spectrum. Of course, we may decide we don’t want to go that way at all. If nothing else, you should take this to mean that practical suggestions and proposals are coming, after I try to organize my thoughts about what we’re really after. Without deepening our analysis, we won’t be able to fashion the tools to build genuinely practical proposals. I hope it goes without saying that I welcome your input.

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