Wednesday, August 14, 2013

Localism: Remedy for Disunity and Recession

I came across the June 2013 issue of The American Conservative features a brief, yet insightful editorial, “Localism’s Green Shoots,” pointing to trends occurring spontaneously across America. Political scientists call this phenomenon localism.  The introductory paragraph acknowledges America’s high unemployment numbers, the wars in Afghanistan and Syria, and civil society’s struggle against the Surveillance State following the revelations by NSA whistleblower Edward Snowden.

The editorial’s main body discusses the impact of those issues here at home: the economy is still in deep recession; more government spending, both at home and abroad, exacerbates the economic situation by inflating the money supply to fund government programs, consequently lowering people’s purchasing power and making it more difficult to save and invest; the War on Terror and unconstitutional surveillance cause the political situation to crumble as more Americans are convinced “government of the people, by the people, and for the people” has perished from the earth.

The editors point to several interesting nationwide trends, first of which is the expansion of farmers’ markets, accompanied by the growth of the “food rights” movement and public opposition to genetically modified foods (GMOs).  I have to agree with those choosing to purchase locally-grown non-GMO foods from farmers’ markets.  Part of this is because I dislike the idea of GMO producers receiving government subsidies[1] to grow food containing hormones and other chemicals harmful through human consumption.  When these companies receive taxpayer money to produce more, larger, unhealthy foods, they’re given an unfair advantage over other producers, especially small and independent farmers.  It remains unseen (in Bastiat’s terminology) that the government chooses winners and creates losers through marketplace interference.

Before I learned about GMO foods, I used to regularly partake in that chemically-altered variety of fruits, vegetables, and processed foods, but now I generally try to avoid GMOs.  My mother has several blooming fruit trees and a comparison of the natural, unadulterated fruits with much larger GMO fruits just plain creeped me out!  The fact that farmers’ markets thrive isn’t due to government intervention in agribusiness, but rather in spite of it.  This trend represents a protest against interventionist policies, not least against those intruding on farming and food production.

Another trend the magazine editors identified is the increased patronization of local, primarily non-corporate small businesses.  I don’t know exactly which of the thousands of consumer industry corporations received Stimulus or TARP funding from the federal government.  What I do know is that, whenever possible, I’ve participated in voting for local farmers and small businesses with my dollars.  In no way is this a revolt against the free market or against mass production of cheaper, more widely available goods and services; instead,  it’s a tiny market signal that yet another consumer has chosen locally produced, higher quality goods and more personable service than one would typically find in a mega-store chain.  It shows a fluctuation of preferences in an arena in which the consumer is theoretically sovereign.

There are cases where locally sold or produced goods are slightly more expensive than those mass produced by large entities.  These cases add credibility to Ludwig von Mises’ subjective theory of value,[2] stating that the value of goods or services is determined not by the amount of labor or production cost, but by the independent value judgment placed on it by individuals.  In my case, the subjective theory explains why I’d prefer to spend 5% or 10% more at the community hardware store than at one of the large department stores.  I find better, speedier service from workers at the community hardware store, and some of those workers are people I know personally.

Another of Mises’ theories that surfaces around localism is that of the necessity of saving money.  He writes in The Anti-Capitalist Mentality,[3] “Capital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving.” If I’m to spend a little more at preferred small businesses, I need to save more by spending less money on other things.  I make subjective value judgments and then purchase whatever goods or services I think I need.

Some market theorists would argue that this brand of localism is a revolt against laissez-faire markets, but the truth is quite the contrary.  Through buying from smaller businesses, I’m feeding their growth with the intended outcome that they’ll one day compete evenly with large chains and influence the battle to mass produce goods and services that are cheaper and better.

The editors also made several allusions to a rebirth of scholarship in conservative ideas at the grass roots level.  These references point not to the big-government conservatism—neoconservatism—that characterized the latest Bush presidency; they refer instead to the paleoconservatism of a bygone era, in which self-styled conservatives—largely libertarian in their ideology—opposed undeclared wars, government intervention in markets, and the federal government overstepping the legal limits to its powers specifically illustrated in the Constitution.  Murray Rothbard elaborates on this topic at length in The Betrayal of the American Right.

The reborn paleoconservative/libertarian ideologies serve as a series of signals in the “marketplace of ideas” (as phrased by John Stuart Mill) that the preferences of “consumers” are shifting in favor of a freer market economy and less government presence in the whole economy and civil society.  Furthermore, localism is giving communities a deeply personal, interactive lesson in economics as human action: people helping people improve society.

[1] “Subsidies, GMOs, Obesity.” Rural Migration News, Vol. 10, No. 3. UC Davis. July 2004. <>
[2] The subjective theory of value is a major theme in Mises’ book Human Action, and adds weight to the thesis that economics isn’t about numbers, theorems, or formulas, but about individual people making choices on spending or acquiring resources.
[3] Von Mises, Ludwig.  The Anti-Capitalistic Mentality, p. 84 via The Quotable Mises, p. 215.

No comments:

Post a Comment