The Myth of Buying Local

The Myth of Buying Local

December 24, 2008
Originally published in The American Spectator

Buying local has always been a popular sentiment, but the movement has picked up steam in recent years. Especially this holiday season, consumers are being urged to patronize local businesses that in-turn buy from other local businesses. Better to keep those dollars close to home.

A recent issue of the Shepherd Express, an alternative weekly paper in Milwaukee, gives readers an added incentive to buy local. Readers who pledge to spend $100 at Milwaukee-owned stores can receive gift certificates and other goodies.

There is nothing wrong with buying local, of course. Consumers have every right to choose where they shop. But on close examination, it gets tricky.

Take a locally-owned coffee shop. Very little of what it sells is actually local. The coffee beans come from Brazil, Ghana, Kenya -- half a world away. The cappuccino was invented in Italy and many of the machines are manufactured in China. How is it "buying local" when you spend money there?

The trucks that hauled the goods to the locally owned business might be American-made -- but probably not in greater Milwaukee, unless the delivery man drives a Harley. And the truck just as likely came from Japan or Germany.

And the customers? They probably wear clothes made in Bangladesh, Mexico, or Indonesia. If they are well-heeled, they might be wearing an Italian suit, or the latest fashions from Paris. They might surf the web on computers made in Japan or Korea and listen to music on an iPod -- the back of which proudly says, "Designed by Apple in California. Assembled in China."

Almost the whole world came together to make this "local" business what it is. And all this is happening at a time when world opinion is as anti-American as ever. This is a marvel of human cooperation across countries. Even a simple coffee shop is a thing of wonder.

Why then, do some people make such a production of their preference of local goods over non-local goods? Why should product origin matter at all?

People rightly take pride in their hometown. But local production doesn't always correlate with quality. Wisconsin isn't known for its excellent locally grown coffee. Suppose Wisconsin farmers tried to make coffee instead of wheat, cranberries, or dairy products. That would not be a boon to local consumers.

Better for Milwaukeeans to leave coffee growing to the experts -- and better for the rest of the world to have more of Wisconsin's cheese, beer, and other specialties. That's what economists call comparative advantage. It turns out that specialization is a good thing.

The way for a town to prosper is for it to do what it does best. And just as importantly, to not do what it does poorly. If every town tried to produce locally everything it consumes, quality would suffer and prices would be much higher because of the diseconomies of scale that would create.

In the end, it doesn't matter whether you do your holiday shopping at locally owned stores or Megalomart. Either way, the store's employees might well live in your neighborhood. Either way, their livelihood depends on your patronage. And either way, they probably aren't selling local wares.

Buying local is mostly a fiction.

What that means is that the products you buy are made by millions of people from dozens of countries. They don't know each other and might even dislike each other if they were to meet. Yet they all work together to give you the perfect gingerbread-flavored latte. This is poetry. It's what the holidays are all about: peace, togetherness, and goodwill toward all men -- not just these who happen to live nearby.