Tuesday, April 10, 2007

Buying Local Saves?

We all know that fulfilling our needs and wants through the most local means is a moral good, right? Working close enough to home to walk or cycle is better than driving (which pollutes and wastefully expends resources), right? Buying products produced locally is better than buying mass produced and/or foreign produced products, right?

Not according to Russell Roberts of the George Mason University Economics Department. Roberts blogs here about this article, which describes Drexel University design instructor Kelly Cobb’s effort to make a suit of clothes using only resources available within a 100-mile radius of Philadelphia. “The suit took a team of 20 artisans [eighteen] months to produce -- 500 man-hours of work in total.” And the results are quite comical (see here). One reader shows math acumen by pointing out that at $10/hour, the suit would cost $5000 wholesale. At $5.25/hour, it would be $2575. And think of the retail markup.

Roberts’ conclusion that “Self-sufficiency is the road to poverty” is a piece with many of his works, which claim that free market economies of scale are the only road to widespread prosperity. Roberts has also frequently claimed that the free market is by far the best tool for achieving the optimum balance of environmental good and human prosperity. He argues (here) that some in the environmental camp have a world view where “humans are a poison on the earth and the reason we should put on a carbon tax or discourage fossil fuels is that our use of the earth's resources is somehow immoral.” Some of Roberts’ readers severely take him to task on that post.

On the blog about the rustic suit, one of Roberts’ readers suggests that an econ professor should assign students to make something simple, such as a pencil, using only local resources. In response to that suggestion, another reader posts a link to this provocative 1958 essay by Leonard E. Read (founder of the Foundation for Economic Education) that delves into the making of a pencil in great detail. It’s also cleverly written from the pencil’s perspective. Milton Friedman thought Read’s essay was the best work ever produced to explain both the importance of the invisible hand of dispersed knowledge and the importance of the freedom to act in one’s own best interests.

Read’s essay suggests that government is involved in some ventures that would more effectively be handled by the free market. He concludes with a passionate plea that laws and society be organized in such a way as to “Leave all creative energies uninhibited” (ellipsis original). He pleads and asserts, “Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.”

For me, this essay was far more important than Dr. Roberts’ post. Read’s example of the pencil is easy to comprehend and is loaded with obvious truths. Extrapolating Read’s main point a little further, it can be said that many governmental control systems exist due to lack of trust of free people. Of course, history is replete with examples of some free people making bad choices. But it seems that government’s default behavior is to overreact to those instances, thereby, imposing more control on those that are not culpable.

By the way, some (not all) of the comments on Roberts’ suit post are quite astute. A professional clothing pattern maker chimes in, noting that the suit was junk because Cobb had a bad pattern and sourced the wrong people to do the job. She suggests that it would be difficult to find a better U.S. location for this project than Philadelphia, but that Cobb squandered excellent resources in favor of amateurs so that she could exert complete control over the entire process. In other words, the project was simply handled badly.

It would be interesting to see a project such as this undertaken in a professional manner. But I think you’d have to go back to the hunter-gatherer mentality to be a purist about it. To see why, let’s do a thought experiment on just one minor aspect of the project. Did the garment makers use crochet hooks manufactured locally from locally mined ore? Were the machines that manufactured the crochet hooks developed using only local materials? Perhaps artisans carved wood crochet hooks from a local tree. Where did the knife to do that come from?

I have been involved in mountain man reenactment. I have tried my hand at brain tanning leather from locally harvested deer hides. I have sewn my own leather clothing. But even when people were doing this in the early 1800s, some of the resources were not locally derived. In fact, non-local items obtained through trade were among the most prized. Where did the lead for the shot come from? The black powder? The rifle? The tub in which to soak the hides? The steel for the drawing knife? The needle used in stitching?

Sure, you could use a locally built bow with locally built arrows. And you could use a bone knife and a bone needle. But people (including Native Americans) gave these rustic tools up as soon as better tools presented themselves. There are good reasons for that. People tend to use the tools that are the most advantageous and obtainable.

I’d have to say that most efforts to operate in local purity for its own sake (believing it to be a higher moral good) are illusions of reality. They are like Ghandi’s poverty, which was actually very expensive to maintain. In other words, the illusion of local purity can be maintained only by using many non-local resources. The end result is that some consumers feel smug and some shrewd business people (that may not even be local) have profited from the sale of high margin products. But if you're willing to pay for it, go right ahead.

Thus, buying local for morality's sake is kind of like a religion in which one achieves redemption by appearing to do all of the right things. The mantra could be, “Save your soul by buying local.” (Or, at least feel superior to your mass consuming neighbors.) I’m not arguing for wasteful consumerism, but buying local does not necessarily mean you are contributing less to non-local sources, and it is often more expensive. Smugness has a cost.

9 comments:

That One Guy said...

There is also a story here to add some perspective to this subject. The individual here posits that someone in Manhattan may indeed impact the environment more by eating an apple from upstate New York than the one that comes on the ship from Chile.

He says, though, that it's not ALWAYS the economic impact that is worth considering most, but also the environmental impact. He says that there is some worth to being able to talk to the grower of your food, etc, to see how the crops are grown vis a vis the pesticides, etc. He says that most bulk growers of food use very environmentally unfriendly methods.

Also of note yesterday: McDonalds announced that it has decided to pay $1 per pound more for grape tomatoes they buy from Florida to help pay the workers better wages, allowing the farmers to attract permanent workers instead of the migrant illegal kind.

I don't think we'll see WalMart heading in that direction any time soon.

Democracy Lover said...

It seems to me one should not buy local because it is a moral good or because of ideology. One should buy local when it actually makes sense to do so.

Buying locally produced food for example means often that you know or could know the farmer or rancher personally and know how he raises his crops or animals and how the animals are slaughtered. You know that you have not been responsible for the fossil fuel consumption and pollution to bring something across the country that was available nearby. The dollars you spend stay in your local community and more of them go to the producer rather than to middlemen.

All that works fine for some foods. We can't grow bananas and oranges too well in New York so unless I'm willing to give them up entirely, I'll have to get them from somewhere a long way away. I certainly would not advocate buying locally produced clothing or pencils - that's just silly in most of America.

The guy who says that we should "Have faith that free men and women will respond to the invisible Hand" is smoking something potent. Note that he capitalizes Hand as though it were the name of a Diety - it is. Far too many people have made the "free market" and pursuit of the almighty dollar their God and serve that master with far more fealty than the God they claim to worship.

y-intercept said...

I've always contended that there needs to be a healthy mix of local, national and international markets. There are a large number of artificial forces (regulations and monopolized industries) that create an imbalance against local firms. I applaud efforts to counter such forces.

BTW, one of the reasons that making a suit in Pa is so expensive is because the United States lost a great deal of its manufacturing skills. The design skills seem to follow the production skills.

Local communities are wise to actively promote local businesses. You are right, however, that groups that try to brow beat or otherwise coerce people into buying locally do the world a disservice. A healthy community has a mix of things. They will have some industries where they are a leader, and they will have businesses from outside the community providing products and services.

When you look at the way things work, the robust local community is often the soil from which larger firms sprout. Healthy communities generally have a balance of things.

Tom Grover said...

Scott,

Great post. This reminds me of the controversy in Cache Valley in 2005 when Wal-Mart announced that they would open a second store here.

Many in the valley were in an uproar over the damage this would do to the local economy. Ultimately, their position was inconsistent. Would they like each community in American to produce their own excercise equipment or is it better for everyone that economies of scale are provided for by Icon while employing thousands of Cache Valley citizens? Would it be better for each community in America to produce their own cheese or is it better to have Cache Valley Cheese and Gosners produce cheese with economies of scale and employ thousands of CV residents?

You can't have it both ways. Economies of scale and specialization produce aggregate benefits that can't be denied.

Tyler Farrer said...

Great post! It gave me an idea to attempt the pencil feat that Read proposes. I created a blog for that purpose, and I'm soliciting help from those who can educate me in its execution.

So, if you know anyone in the "pencil" business, please send them my way.

:)

http://onepencil.blogspot.com/

sushil yadav said...

Reach Upward,

The issue is not Buying Local or Buying products made thousands of miles away. The issue is "Buying" itself. Why Buy so much? We need just a few things to live and we are making, buying and selling thousands of Consumer Goods.

In this context I want to post a part from my article which examines the impact of Speed, Overstimulation, Consumerism and Industrialization on our minds and environment. Please read.

The link between Mind and Social / Environmental-Issues.

The fast-paced, consumerist lifestyle of Industrial Society is causing exponential rise in psychological problems besides destroying the environment. All issues are interlinked. Our Minds cannot be peaceful when attention-spans are down to nanoseconds, microseconds and milliseconds. Our Minds cannot be peaceful if we destroy Nature.

Industrial Society Destroys Mind and Environment.

Subject : In a fast society slow emotions become extinct.
Subject : A thinking mind cannot feel.
Subject : Scientific/ Industrial/ Financial thinking destroys the planet.


Emotion is what we experience during gaps in our thinking.

If there are no gaps there is no emotion.

Today people are thinking all the time and are mistaking thought (words/ language) for emotion.

When society switches-over from physical work (agriculture) to mental work (scientific/ industrial/ financial/ fast visuals/ fast words ) the speed of thinking keeps on accelerating and the gaps between thinking go on decreasing.

There comes a time when there are almost no gaps.

People become incapable of experiencing/ tolerating gaps.

Emotion ends.

Man becomes machine.


A society that speeds up mentally experiences every mental slowing-down as Depression / Anxiety.

A ( travelling )society that speeds up physically experiences every physical slowing-down as Depression / Anxiety.

A society that entertains itself daily experiences every non-entertaining moment as Depression / Anxiety.


Fast visuals/ words make slow emotions extinct.

Scientific/ Industrial/ Financial thinking destroys emotional circuits.

A fast (large) society cannot feel pain / remorse / empathy.

A fast (large) society will always be cruel to Animals/ Trees/ Air/ Water/ Land and to Itself.


To read the complete article please follow any of these links :



FreeInfoSociety

ePhilosopher

sushil_yadav

Reach Upward said...

I agree with DL that we ought to buy local when it makes sense; that we ought to make informed buying decisions. That seems to go along with TOG's ideas as well. Kevin's notes on a healthy mix are helpful as are Tom's comments about the Cache Valley experience.

Tyler, I'm intrigued that you would undertake the pencil assignment. I know nothing about making a pencil, but I will be interested to see how the project turns out.

I agree with Sushil Yadav that we have too much wasteful consumerism. I said that I was not defending that kind of lifestyle. My personal philosophy is that everything we own in effect owns a piece of us. Everything we acquire has costs over its lifetime of our thought, emotion and time, as well as temporal resources. And you have to find someplace to put it all. All cost factors should be considered in the cost-benefit analysis when making acquisition decisions.

But there is a balance to be struck in all of this. Sure, we all only need a few things to survive, but life is more than about mere survival. I'm not sure I completely buy the argument that humans are ill suited to the modern lifestyle and are better suited to being cavemen. I've seen some research to back up this proposition, but most of it is full of subjective holes and/or has been undertaken with no satisfactory control group.

How do we know that people are more prone to mental illness today than when times were simpler? There were precious few trained psychologists back in those days, and most of what passed for psychology was infused with mystical hocus pocus.

I've done the simple life re-enactment thing, including living in a tent for several months at a shot in remote locations. It is different and engenders different perspectives. But it takes a lot of work. It might open one up more to the emotional side if done as a weeklong vacation. But after a couple of months, I don't see that it is any more emotionally or mentally satisfying than a modern lifestyle.

I know how to do the survival thing. I've done it. Not infrequently. But I find living inside my house with its flushable toilets, warm showers, musical instruments, computers, refrigerator, and microwave to offer an overall better life.

Tyler Farrer said...

In a sense, investing money in the bank is spending it. It doesn't get buried under a rock. The investors take the money and spend it where they will--or can. It's then returned with an increase so its a win-win. It's a great way to grow the economy.

I realize the irony of a person like myself taking on the task of building a pencil. I'm a far cry from the "save-the-planet" crowd that usually try this sort of thing. I think it can be done, but at a great cost. I want to try it so we have some documentary evidence of what is required, and because I want to test the effectivness of the new media at spreading knowledge.

I wouldn't have tried this had I been alive in the 50's.

Frank Staheli said...

I used to subscribe to the journal of FEE. I need to renew. That's why I like Thomas Sowell and Walter Williams so much--because they explain just how simple it is, in simple terms.

I'd wear the $5,000 suit for halloween, but not if I have to rent it!

I wonder (but have no proof, although it stands to reason, because society often emulates government) whether we as citizens (parents, schools, churches, businesses, etc.) overreact in much the same way government does. As soon as something goes wrong one time, we have a tendency to ban that thing.