Overseas Culture of Buying Local
The “buy local” movement has been around in some form since international trade and globalization began. In Canada, a “Buy Canadian” movement began as early as 1914, when the First World War economy saw imported products as a threat for the first time.
Most professions would perish if a strict “buy local” approach was adopted. After all, if your town thinks it best to only purchase within its borders, then surrounding towns should follow suit. Inter-town trade would grind to a halt. In so doing, those towns would limit the number of people and the amount of money in the local economy - systematically making themselves poorer.
The Buy Local movement promotes subsistence disguised as “social capital” and regression disguised as “conservatism.” Throughout the course of human events, the most prosperous economies have always fled from these fallacious ideas, not because of any moral superiority, but because the alternative was much better. People in early Europe wanted spices from Asia and the Middle East. The Japanese Meiji Restoration modernized the country by opening its borders to trade.
USA Strong in July unveiled a mobile app that gives shoppers access to USA strong. Io’s 8,000 products from 180 brands made in 34 states. These include men’s and women’s fashion brands, home goods, accessories, outdoor products, food, and health and beauty care products. Every product on the app and site has been verified through USA Strong’s blockchain-driven process.
The pandemic has revived nationalist and parochial sentiments and intensified “locavorism,” the practice of eating locally produced food. Last summer, the Canada united movement launched an advertising campaign to encourage consumers to shop locally, offering extra points on customers’ rewards cards.
There’s a national security case for reducing trade dependence on other countries, especially on drug manufacturing from China. However, much of the justification for the buy-local movement rests on faulty logic and ethical appeals. That’s not to say you shouldn’t support the mom-and-pop shop in your community. The problem arises with the broader movement undermining mutually beneficial transactions.
People import products from large distances if they’re cheaper and superior to those offered in the local market. Labor may be cheaper elsewhere and production more efficient, resulting in increased variety, lower prices, and greater consumer surplus, which occurs. when the market price is lower than the price buyers are willing to pay.
There are many local farmer’s markets where you can find a great deal on a bushel of corn. However, in Alaska, you may find it hard to find a good price on locally grown strawberries. The reason for this is simple, the care and equipment needed to keep produce safe from the climate can be costly. If you lived in Florida, you could walk outside and pick an orange for free, since it is a local product. In Nevada, you wouldn’t have that option.
As nice as it would be to keep only locally grown produce in the grocery store, it is unrealistic if you are shopping on a budget. The result of 100% locally grown produce is increased prices on “good” foods and consumers being drawn to the cheaper alternative, the “bad” foods. Fruits and vegetables which are high in nutrients will be cast aside for cheaper “fast foods”. Growing outside of the natural limited regions can be a costly endeavor resulting in costly shopping.
There are many benefits to buying locally, and yet there is still a need for fair trade. Ideally if every major chain increased locally grown produce to 10%, we could still sustain local economies while keeping prices low on fair trade produce from regions where it is natural to grow. Complete localization is currently ineffective and costly, however, visit your local farmer’s market and support your community as much as possible and perhaps in the future science will find a low-cost way to grow strawberries in the Alaskan mountains.
When using the buy-local movement in your marketing strategy, be aware of how you spin it. “It’s easy to show that the local businesses benefit from buy-local movements. It’s very hard to show the costs,” says Russell Roberts, an economist at George Mason University and host of the EconTalk podcast. The costs can include higher prices and a narrower selection for consumers. “The claim is it keeps the money in the community,” he says. “The money in the community isn’t the goal of economic life. The goal of economic life is to have the right access to the things we care about.
As this movement continues, we are seeing little written in defense of free trade, open access to markets, and the benefits of a public procurement approach that puts other factors – such as value – at the heart of the activity. So, we thought it was worth re-stating the negatives around a protectionist approach to procurement, and some of the benefits of openness.
Protectionism is economically inefficient. The theory of comparative advantage says that It makes absolute sense for countries, companies and individuals to focus on the activities where they have a lower relative opportunity cost. Basically, the UK is good at financial and business services, not building laptops, so focus on exporting more in our strong areas, not trying to protect (or create) our own local laptop industry.
Protectionism hits consumers and taxpayers. We can see this in public procurement; favoritism for local or national providers where they would not win on purely value grounds must result in either more being paid (by the taxpayer) than is necessary or the buyer accepting a lower quality of goods or services, which hits the user and potentially the taxpayer. This factor is not discussed or considered enough when politicians talk about their “procurement though policy” issues, whether that is supporting smaller firms, local business or even social value goals.
Protectionism does not encourage innovation or competition. If domestic firms are protected or know they are going to win government contracts come what may, why would they bother to compete with the best in the world, innovate, become more efficient and so on?
Protectionism opens the door to corruption, unfairness, and a lack of transparency in public procurement. In most cases, these protectionists attitudes introduce a subjective element into procurement processes, because we are favoring some bidders over others based on factors that are not objectively related to the value proposed in the bid. So that can become a camouflage for decisions being made based on payments to the buyer or political favors perhaps.