Choosing Local Businesses

Market forces don't trump everything, but they trump a lot. When the big-box stores have everything you want and at a better price, it takes a certain kind of quixotic determination to shop local businesses instead.

Plenty of people have that quixotic determination in some measure and do shop at local businesses. And there are plenty of good reasons to do so:

• Local stores are usually closer (rather than out at the edge of town).
   
• Local stores are likely to have a selection that reflects the tastes of the local community (rather than whatever the corporate buyers think will make highest profit nationwide).
   
• Local stores are much more likely to be environmentally friendly than the globalized producers. (After all, any environmental harm they cause affects their customers — and happens where their customers can see it.)
   
• The people running the local store are much more likely than some minimum-wage big-box drone to care about how well your purchase works out for you.
   
• Money paid at a local store is much more likely to stay local.

This last point, which is key, is not a new issue. People have understood the problem of money flowing out of the community for as long as there has been money.

The Problem with Global Money

This issue has, for at least hundreds of years, been especially acute in farming communities, because farmers get all the money they're going to get at harvest time. For a little while after the harvest, the local economy would thrive, thanks to vigorous flows of money from farmer to shop to local craftsman and back again. The seamstress would buy from the weaver, who'd buy from the spinner, who'd buy from the shepherd, who'd shop at the local store that sold the seamstress's wares.

But this only worked for a little while. Some things couldn't be sourced locally. The blacksmith had to buy iron. The glazer had to buy glass. One coin at a time, money flowed out of the community — and, since it was a farming community, there would be few coins flowing back again until the next harvest. Pretty soon there was no longer enough cash to support a vibrant local economy. With everyone hoarding their last few coins, local business could easily devolve to barter.

The same dynamic is at work today. It hits less sharply because there are more inflows of cash — even in farming communities there are plenty of people whose income isn't purely from the harvest — but the outflow of cash still exists. Some of the money spent at the big-box store goes to pay the local workers and some goes to pay local taxes and local utilities, but that's it. The rest of the money leaves the community. Some goes to pay the global firms that manufacture the products. The rest goes to Wall Street to pay the shareholders. A small trickle flows back — some of those shareholders are local rich folks and some are pension funds paying pensions to local retired folks — but that tiny trickle hardly reverses the flood.

Winning the Local-Shopping Argument

Even with all that on the side of shopping locally, most people look at both sides and end up shopping the big-box stores (and on the internet). It's tempting to imagine that, if the issues could just be explained clearly enough, shoppers would make a different choice, but I doubt that's true. In the end, getting the best price is simply more important than anything else.

And right there is our best shot at winning the argument. The winning strategy now — a win not only on cost, but also on sustainability and environmental grounds — is to buy local but to include buying used, salvaged, recycled, and free goods.

This strategy supports not only the local storefront businesses, which can include such goods among their items on sale, but it also supports the non-storefront businesses such as local craftspeople (which can make much better use of recycled and salvaged materials than globalized businesses can, if for no other reason than that the materials are already there and don't need to be shipped). Further, it integrates ordinary folks back into the local economy as sellers, not merely consumers.

Shop at local businesses. Take advantage of their superior service and their superior knowledge of the tastes of the local community. Buy goods produced locally. Enjoy the fact that their production neither destroyed the environment (not even in some far-away place) nor depended on slave labor. Most especially, buy things used from your friends and neighbors. Know that your money is staying in your local community.

This small business post is brought to you by American Express. American Express is presenting Small Business Saturday, a way to honor the local merchants who are the backbone of the economy, this Saturday, November 27. They're offering statement credits to people who shop at small businesses, advertising for small-business owners, and donations to Girls Inc. for "Likes" of the Small Business Saturday page on Facebook. Join the celebration by clicking the "Like" button and then visiting the Facebook page to learn more about the program and read the terms and conditions that apply.