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Is there an economic argument to be made for increasing the amount of money spent in the local economy? I often hear it cited as a benefit in situations like t

• majormajor 5y ago
  Beyond just the an outsourcing-style one? Where the local circulation is more important than the immediate sticker price? Giving your money to someone else local means they can purchase stuff from someone else local who then can purchase stuff from someone else local, etc... vs that money being out of the local economy entirely.
• jeffreyrogers 5y ago
  Maybe not a strictly economic one, but probably a socioeconomic one: that keeping more money in local communities helps those communities to be better places to live. Whether that is true or not, I don't know. It's definitely true that corporate concentration has been increasing and that many of these communities are in decline.
  • durkie 5y ago
    There are definitely plenty of towns I've been to in rural America (north GA) that are clearly hollow shells of their former selves. And it's way more fun and interesting to be in a place that does have a thriving local economy. The socioeconomic benefits are clear. I'm just wondering if theres a way to frame it in economic terms, or if everything about resiliency, more local jobs, etc. are basically all "externalities".
• louis___ 5y ago
  There is often an array of benefits. Following on your example, if you buy seed from the local seed & feed, you : - build resilience, for example if a global pandemic prevents far-reaching import-export - are less subject to geopolitics - money invested have a higher chance to stay in the local economy : the owner of the local seed & feed may buy its vegetables from you - create local jobs : this seed & feed owner may be able to create jobs for people - overall avoid the lock-in that you can have being tied to XYZ megacorp, for example if they now decide to only sell you seed that will grow with their newly branded feed - preserve local folklore : maybe there is a kind of seed that grows really well on your soil, but not so much in the others, so XYZ has decided to discontinue it because the market is too small to be profitable
  • tastyfreeze 5y ago
    If the seed is grown locally you can add "has adaptations to local environment" to that list.
• adrianN 5y ago
  People might pay higher prices, but they also get better wages and the economy becomes more resilient against killing the whole area because the local economic network gets more edges. So there is a better chance to find a new job should your current job go away for some reason.
• egypturnash 5y ago
  Money given to a megacorp leaves the local economy, leaving the local area poorer, overall. Money given to your neighbors stays in the local economy. A well-off local economy supports more things than a poor one. Local seed & feed shops are a start, but think of every other business that might be part of a small town: grocery stores, bookshops, art galleries, clothing, musicians, movie theaters, children's party entertainers, furniture makers, car dealerships, repair shops... how many of these things used to be made locally, and are now made by people working under dubious conditions somewhere in Asia, then shipped across the world at a huge, but completely-ignored cost to the environment? How many local shops has Wal-Mart ruined by being large enough to cut predatory deals with suppliers that let them sell stuff below any sane price point? How much money left the entire US economy for Jeff Bezos' pockets during the pandemic? Keeping money in the local economy leads to better-off neighbors. Better-off neighbors are less likely to resort to criminal acts to feed your family; better-off neighbors are more likely to be able to help you out if something bad happens. The metaphor that comes easily to mind is water: each local economy is a pool, with the locals the fish swimming in it. Buying stuff from a megacorp may be cheaper in the short run, but every time you do that, the corporation is pumping a bit of the water out of your pond and putting a little of it in their pond, far far away, and most of it in their giant storage tank even further away, where it sits, unused. Ultimately your pond dries up and either you leave for a larger pond that hasn't been sucked dry by corporations, or you end up baking in the sun and dying.
  • kickout 5y ago
    I agree with most of your comments. I would like to add that a LARGE chunk of rural (truly rural) economic rely heavily on Big Ag and selling those products. From co-ops to seed dealers, chemical dealers, people to apply and plant these chemicals and seed. Equipment (Deere, Case)...if these people vanished, rural america would suffer GREATLY. Locall replacements for these jobs/companies is not clear to me.
• samatman 5y ago
  It's bang for buck, basically. Consider a single (physical) twenty dollar bill. If it enters a small town (remote worker for FAANG withdraws it out of an ATM) and then immediately leaves (from the Walmart till onto an armored truck to the local city center), that's $20 in economic activity. If it passes between five hands locally before it ends up on that truck, that's $100 of economic activity, five times as many opportunities for people to exchange what they have for what they want. This is a toy model, there are a ton of things wrong with it, but it does illustrate a real point. In the six-hands scenario, more of the residents are offering goods and services to each other, in the two-hands scenario, everything is being provided to and by the larger economy. Less resilient, less locally-scaled, and it's easier to replace the small town with any other set of producer/consumers who offer lower prices or thinner wages.