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Comments about ‘Shopping local benefits local economy more, new study says’

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Published: Wednesday, Aug. 15 2012 7:54 p.m. MDT

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carman
Wasatch Front, UT

Shopping local is a buggy whip mentality that tries to maintain the past in the headwind of the future. Frankly, it is wasted effort and will cause net harm in the long run. "Buy local" is what China, Russia, North Korea and dozens of others tried for decades. And their closed economies sank because they became non-competitive and their consumers and laborers were unable to take advantage of the only free lunch in economics - exchange and trade.

Economic reasons that "buy local" fails. 1) Consumers fail to reward the most efficient producer distributor, which only increases inefficient behaviors. 2) Consumers receive lower quality goods at higher prices. 3) Consumers don't have as much consumer surplus. This is money/utility that cannot be save, invested or consumed elsewhere. Buy local economies tend therefore, to under-invest in emerging technology and/or trends. 4) Suppliers slowly become unable to compete globally. Slowly the gap between local supply quality and global competitors becomes so wide that consumers no longer ignore the global option. Local business sales slowly drop, wages decline, until they are bankrupt - AND years behind in competitiveness.

carman
Wasatch Front, UT

So what is the answer?

Rather than try the failed economics of "buy local", companies should aggressively pursue the opportunity to gain a relative and or absolute advantage in a niche where they can win, at least relatively. Then leverage that advantage by moving that product into markets where that relative advantage is greatest. In the long run, this will help 1) producers create and retain the most possible high paying jobs, 2) will give consumers the greatest buying power, 3) will keep the local economy most competitive and reduce the risks of large, even fatal quality gaps, and 4) will allow the community to save and invest the most in emerging technologies and opportunities.

While "buying local" has some benefits, in the long run it is generally not either economically or environmentally efficient, and does more harm than good.

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