Posts Tagged ‘economic relocalization’

Misperceptions of economic relocalization

For economic relocalization to become something more than a fringe movement, it has to make clear that it isn’t simply about the selling and purchasing of goods and services within a narrowly drawn geographic region. I say this because yesterday I heard Karla Chambers, an Oregon farmer sympathetic to efforts to localize our food supplies, tell a large group of sustainability-minded individuals that Oregon farmers cannot survive on local markets alone. We simply have too small of a population. Ninety-two percent of the agricultural products grown here leave the state, she said. Oregon is a natural-resource state, and we can’t consume all that we produce.

I take from her comments that she would view relocalization (a term she didn’t use) as far too extreme to be seriously considered. To her, the goal of relocalization is the end of global trade; that economies should consist exclusively of local companies trading with each other and people consuming only what they can purchase locally. I certainly don’t see it that narrowly, and I don’t believe the majority of relocalization advocates do either. Exporting will never disappear completely. Even if a global energy crisis hits, producers will resort to horse-drawn wagons and wind-propelled ships if that’s what it will take to move their products to markets that want them. After all, countries depended on international trade centuries before fossil fuels and combustion engines came along (of course, much of it was forced trade from colonization).

The point is global trade is here to stay, and clearly it is better economically for a state or community to be a net-exporter than a net-importer. The economic case for relocalization isn’t in becoming a substitute for global trade; it’s in raising awareness that too much of the income produced locally is leaking out of our communities because it is increasingly spent on goods or services from providers that are not locally owned. Think big-box and other chain retailers that source almost nothing of what they sell from local businesses and ship their profits off to headquarters in other states or countries. Keeping money circulating in a local economy multiplies its value by up to three times as it changes hands from one local producer, retailer or service provider to another.

Those of us sympathetic to economic relocalization want to see much more of our communities’ personal and business income stay home and multiply in value. That means citizens spending more of their disposal income with locally owned businesses and local businesses looking more to each other for products and services. And yes, we must also continue to help our local businesses dependent upon national or international markets to compete and win. Bringing money into our local economies from elsewhere is vital.

The issue isn’t either/or, local or global. It’s that political and economic leaders focus almost exclusively on the so-called global traded sector. They all but ignore the leakage of dollars to out-of-state businesses that set up shop in our communities. In fact, they exacerbate the problem by using tax subsidies to encourage many of those very same outsiders to locate here – not exactly a recipe for economic sustainability. The most productive economic debate is asking how to keep more of our money trading locally and help local business owners, like Karla Chambers, win globally.