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Local purchasing is a preference to buy locally produced goods and services rather than those produced farther away. It is very often abbreviated as a positive goal, "buy local" or "buy locally', that parallels the phrase "
think globally, act locally The phrase "Think globally, act locally" or "Think global, act local" has been used in various contexts, including planning, environment, education, mathematics, business and the church. For many environmental activists, the phrase has been chang ...
", common in
green politics Green politics, or ecopolitics, is a political ideology that aims to foster an ecologically sustainable society often, but not always, rooted in environmentalism, nonviolence, social justice and grassroots democracy. Wall 2010. p. 12-13. It b ...
. On the national level, the equivalent of local purchasing is
import substitution Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production.''A Comprehensive Dictionary of Economics'' p.88, ed. Nelson Brian 2009. It is based on the premise that ...
, the deliberate industrial policy or
agricultural policy Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultu ...
of replacing goods or services produced on the far side of a national border with those produced on the near side, i.e., in the same country or
trade bloc A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states. Trade blocs can be stand-alon ...
. Before
industrialization Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
and
globalization Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
became widespread, there were so many incentives to buy locally that no one had to make any kind of point to do so, but with current market conditions, it is often cheaper to buy distantly-produced goods, despite any added costs in terms of
packaging Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a co ...
,
transport Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, an ...
,
inspection An inspection is, most generally, an organized examination or formal evaluation exercise. In engineering activities inspection involves the measurements, tests, and gauges applied to certain characteristics in regard to an object or activity. ...
,
wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...
/
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
facilities, etc. As such, one must now often take explicit action if one wants to purchase locally produced goods. These market conditions are based on externalized costs, argue local-economy advocates. Examples of externalized costs include the price of
war War is an intense armed conflict between states, governments, societies, or paramilitary groups such as mercenaries, insurgents, and militias. It is generally characterized by extreme violence, destruction, and mortality, using regular o ...
,
asthma Asthma is a long-term inflammatory disease of the airways of the lungs. It is characterized by variable and recurring symptoms, reversible airflow obstruction, and easily triggered bronchospasms. Symptoms include episodes of wheezing, cou ...
, or
climate change In common usage, climate change describes global warming—the ongoing increase in global average temperature—and its effects on Earth's climate system. Climate change in a broader sense also includes previous long-term changes to E ...
, which are not typically included in the cost of (for example) a gallon of fuel. Most advocates for local economics address contracting and
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
, as well as purchasing. Agricultural alternatives are being sought, and have manifested themselves in the form of
farmers' market A farmers' market (or farmers market according to the AP stylebook, also farmer's market in the Cambridge Dictionary) is a physical retail marketplace intended to sell foods directly by farmers to consumers. Farmers' markets may be indoors or o ...
s, farmed goods sold through the community
cooperatives A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
, urban gardens, and even school programs that endorse
community agriculture Community-supported agriculture (CSA model) or cropsharing is a system that connects producers and consumers within the food system closer by allowing the consumer to subscribe to the harvest of a certain farm or group of farms. It is an altern ...
.


Rationale for local purchasing

Advocates often suggest local purchasing as a form of
moral purchasing Ethical consumerism (alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, or ethical shopping and also associated with sustainable and green consumerism) is a type of consumer activism based on the conc ...
. Local purchasing is often claimed to be better for the
environment Environment most often refers to: __NOTOC__ * Natural environment, all living and non-living things occurring naturally * Biophysical environment, the physical and biological factors along with their chemical interactions that affect an organism or ...
and better for
working conditions {{Short description, 1=Overview of and topical guide to working time and conditions This is a list of topics on working time and conditions. Legislation * See :Employment law Working time * See :Working time * Flextime Working conditions * Bios ...
. Others contend (with empirical evidence) that local purchasing and contracting enhances local job creation and wealth while strengthening community cohesiveness."The Benefits of Doing Business Locally"
by Jeff Milchen
The first potential moral benefit is environmental: Bringing goods from afar generally requires using more energy than transporting goods locally, and some environmental advocates see this as a serious environmental threat. Transportation contributes to environmental contamination in addition to the pollution caused by chemical inputs in the growing phase. Of course, locally produced goods are not always more energy-efficient; local
agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
or
manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
may rely on heavy inputs (e.g.,
industrial agriculture Industrial agriculture is a form of modern farming that refers to the industrialized production of crops and animals and animal products like eggs or milk. The methods of industrial agriculture include innovation in agricultural machinery and far ...
) or energy-inefficient machinery and/or transportation systems. However, small-scale growers tend to be more environmentally friendly because industrial-sized agriculture uses genetically modified crops, monoculture production, and
chemical fertilizer A fertilizer (American English) or fertiliser (British English; see spelling differences) is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from ...
-intensive processes to grow crops—practices that local farmers typically avoid.''Environment and Society: A Critical Introduction'' (Critical Introductions to Geography) by Paul Robbins, John Hintz, and Sarah A. Moore, 2010. The second potential benefit is creating better working conditions. Nonetheless, while diverting purchasing from developing countries to local farmers helps build the local economy, it can lead to worse conditions for poor farmers in developing countries because it removes potential buyers from the market. For communities, spending at local independent businesses also generates more jobs and wealth in the local economy compared to spending at absentee-owned businesses, including corporate chains. The goal of localisation is to reduce unnecessary transport, support entrepreneurism and to strengthen and diversify community economies. This calls for condensation of agriculture and supports the idea that local farmers are capable of sustaining a community. The term “Buy Local” has become subject to varying interpretations. While leading advocates of local independent business such as the
American Independent Business Alliance The American Independent Business Alliance (AMIBA) is a non-profit organization that represents the interests of local independent businesses, helps communities develop strong local economies through nurturing local entrepreneurs, and promotes citi ...
say the term should apply only to locally owned independent businesses, some campaigns run by governments and Chambers of Commerce consider "local" to be merely a geographic consideration."What is a Local Independent Business
by American Independent Business Alliance
Additionally, many corporations have manipulated the term in ways critics call "local-washing"."The Corporate Co-opt of Local"
article by Stacy Mitchell


Alternative viewpoints

The argument that "buying local" is good for the economy is questioned by many economic theorists. They argue that transportation costs actually account for a fraction of overall production prices, and that choosing less efficient local products over more efficient nonlocal products is an economic
deadweight loss In economics, deadweight loss is the difference in production and consumption of any given product or service including government tax. The presence of deadweight loss is most commonly identified when the quantity produced ''relative'' to the amoun ...
. Moreover, the community as a whole does not actually save money because consumers have to spend so much more on the more expensive local products."'Buy Local' Can Be Bad Economics"
by Louis Johnston on MPR News
Similarly, the
moral purchasing Ethical consumerism (alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, or ethical shopping and also associated with sustainable and green consumerism) is a type of consumer activism based on the conc ...
argument has been questioned as more and more consumers consider the welfare of people in countries other than their own. Most "buy local" campaigns rely on the
implicit assumption A tacit assumption or implicit assumption is an assumption that underlies a logical argument, course of action, decision, or judgment that is not explicitly voiced nor necessarily understood by the decision maker or judge. These assumptions may b ...
that providing jobs for people in the consumers' own country is more moral than in "foreign" countries. They also imply that money going to foreign countries is worse than money staying in the consumers' own country. Increasingly, these campaigns have been called out as paranoid, jingoist and even xenophobic. Additionally, organic
local food Local food is food that is produced within a short distance of where it is consumed, often accompanied by a social structure and supply chain different from the large-scale supermarket system. Local food (or "locavore") movements aim to con ...
tends to be more costly so this is not an appealing option to consumers who are shopping on a budget. Small-scale farmers do not receive government subsidies and are not able to support their business on prices comparable to those of industrial-scale food production, so they must sell at higher prices to make a living. Therefore, in order for the appeal of the local agriculture movement to overcome the economic cost, people must be willing to invest in it, which is unlikely when apparently similar products are available in grocery stores for a lower cost. Despite this, distribution costs of expansive food trade must also be factored in; with increasing gas prices, it becomes more expensive to ship food from outside sources.


Import substituting

In 2006, Michael Shuman proposed Local ownership import substituting (LOIS), as an alternative to
neoliberalism Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...
. It rejects the ideology of
there is no alternative "There is no alternative" (TINA) is a slogan strongly associated with the policies and persona of the Conservative British prime minister Margaret Thatcher. In a speech to the Conservative Women's Conference on 21 May 1980, Thatcher appealed ...
. Shuman claims LOIS businesses are long term
wealth Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...
generators, are less likely to
exit Exit(s) may refer to: Architecture and engineering * Door * Portal (architecture), an opening in the walls of a structure * Emergency exit * Overwing exit, a type of emergency exit on an airplane * Exit ramp, a feature of a road interchange ...
destructively and have higher economic multipliers.


See also

*
Local food Local food is food that is produced within a short distance of where it is consumed, often accompanied by a social structure and supply chain different from the large-scale supermarket system. Local food (or "locavore") movements aim to con ...
*
Autarky Autarky is the characteristic of self-sufficiency, usually applied to societies, communities, states, and their economic systems. Autarky as an ideal or method has been embraced by a wide range of political ideologies and movements, especially ...
*
Civic agriculture Civic agriculture is the trend towards locally based agriculture and food production that is tightly linked to a community's social and economic development. It is also connected to the citizenship and environmentalism within a community. Civic a ...
*
Community-based economics Community-based economics or community economics is an economic system that encourages local substitution. It is similar to the lifeways of those practicing voluntary simplicity, including traditional Mennonite, Amish, and modern eco-village commu ...
*
Comparative advantage In an economic model, agents have a comparative advantage over others in producing a particular good if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade. Comp ...
*
Eco-communalism The Global Scenario Group (GSG) was an international, interdisciplinary body convened in 1995 by the Tellus Institute and the Stockholm Environment Institute (SEI) to develop scenarios for world development in the twenty-first century. Further de ...
*
Energy economics Energy economics is a broad scientific subject area which includes topics related to supply and use of energy in societies. Considering the cost of energy services and associated value gives economic meaning to the efficiency at which energy c ...
*
Fiscal localism Fiscal localism comprises institutions of localized monetary exchange. Sometimes considered a backlash against global capitalism or economic globalization, fiscal localism affords voluntary, market structures that help communities trade more effici ...
*
Local currency In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area, while a community curren ...
*
Local multiplier effect The local multiplier effect (sometimes called the local premium) is the additional economic benefit accrued to an area from money being spent in the local economy. The concept has been taken up by advocates for "spend local" campaigns in addition to ...


References

{{Globalization , collapsed Agricultural policy Ethical consumerism Industrial policy Localism (politics) es:Consumo local