‘Buy local’ is baloney
“Buy local” is a term you probably hear a lot in these days of digital commerce and a global economy. Business groups such as the Chamber of Commerce promote the slogan, especially during the holiday shopping season.
Donald Trump made a reinvigorated sort of trade protectionism a centerpiece of his 2016 campaign.
Local politicians also buy into the concept.
As a case in point, during a recent debate over which vendor should supply quicklime to the local water treatment plant, City of Minot leaders considered whether they should institute a policy giving preference to local businesses when the municipality purchases goods or services.
“I think it does really erode our economy,” city councilman Josh Wolsky is quoted as saying by the Minot Daily News. “Maybe it’s time we push Century Code a little bit and define these in terms that are more favorable to us because I do think it’s important that we keep our dollars here.”
This argument is built on the assumption that funneling more commerce to local businesses will be good for the local economy, and that more jobs and higher wages and bigger tax collections will follow.
But, as is often the case when economic development ploys are discussed, this benefit analysis forgets the cost.
In this instance, the cost is inflated spending which has to be supported by the taxpayers.
Protecting local businesses from competition in bidding on municipal contracts is going to drive up the cost of those contracts. That’s just a fact. If local businesses were always making the most competitive bids, there would be no need for politicians to pursue this sort of policy.
To be sure, price is not the only factor when considering a bid, but it’s a pretty big factor. The City of Minot, and every other government entity, has a duty to be responsible with the taxpayer dollars they’re entrusted with. That means making decisions on bids based on their relative merits, not some quixotic notion about economic development.
Besides, if we’re going to count the economic impact of funneling more contracts to local businesses, we also have to consider the economic impact of local government that costs taxpayers more than it should.
The reasoning holds true for all “buy local” campaigns. While they may be persuasive for politicians, who are spending other people’s money, most people managing their own household budgets are going to value things like cost and convenience and quality over geography.
There’s nothing wrong with that.
We should stop carrying on as if there is.
Those sort of rational economic decisions are the “invisible hand” which, in the aggregate, generally guide our relatively free markets in the right direction. An economy beholden to political, protectionist philosophies is one that will be less prosperous overall.
The best sort of economy we can have is one guided by decisions made by people free to pursue the choices they feel are best for them.
So if you see a hot deal online, don’t let anyone make you feel guilty for availing yourself of it.