New Opportunities for Local Economies

In his 2002 talk for the Community Land Trust in the Southern Berkshires Michael Shuman stated that this century will “determine who wins the fundamental struggle between cheap goods and place, between the protection of private bottom lines and the protection of families, communities, and the environment.” Concerns over global distribution, rising energy costs, and the legitimacy of subsidies to global firms coupled with a growing environmental consciousness, a proliferating localist movement, and a growing interest in workplace quality have pushed people to consider options beyond the global economy. There are growing signs that local ownership and import substitution are going to become the dominant trend.

Local business owners inherently have different priorities than distant owners. Absentee owners can only determine the success of a business by focusing on the bottom line. Those who are not part of a community will not see how their decisions affect community life, education, the environment and public health. Shuman says that, “the more of your economy that is locally owned, the more plausibly you can then raise labor and environmental standards with confidence that businesses will adapt rather than flee.” Local owners are part of the community and thus are affected by good or bad decisions in the same way as every other resident. Their individual stakes in the well-being of the community broadens the bottom line to include more than just profit.

Import replacement is the other key factor that Shuman identifies as vital to a self-reliant local economy. Replacing imports with products made locally decreases a regions vulnerability to outside forces, increases the economic multiplier as money circulates through the community, and creates revenue for the public sector through tax payments. A good community economic development policy identifies where the most money is escaping and develops businesses that fill these gaps. Once the gaps are filled, the money that was leaving the area becomes a means for further developing the local businesses.

Shuman believes that making the move from global to local business means dispelling the misconception of “bigger is better.” Local production for local consumption decreases the need for advertising, transportation, and the middlemen involved in bringing global goods to market. As energy costs continue to rise local producers will gain “a competitive advantage over global producers who are shipping goods from places as far away as China.” Small businesses are offering “more exciting, innovative, interesting, and caring workplaces.” “Because scale issues are shifting so dramatically in so many different areas of the economy and new horizons for local business are opening up so quickly, our problem is not that [local ownership and import substitution are not] competitive but that we don’t know how to mobilize our skills, capital, and ingenuity fast enough to take advantage of [the] increasing opportunities.”

Communities moving into a local economy will require a range of activities from the critical analysis of subsidies and monetary “leakages” to the financing of new businesses. These communities will disavow cheap goods and the next sale at the shopping mall to become “advocates for the well-being of families, communities, and ecosystems.” Ultimately self-reliance will “systematically resolve . . .material conflicts over oil, water, land, resources, and poverty. . . mak[ing] a very important contribution to world peace.”

Michael Shuman, will join Charles Turner and Majora Carter as speakers for the Annual E. F. Schumacher Lectures on October 27, 2007, at the Mahaiwe Performing Arts Center in Great Barrington, Massachusetts. Tickets are 20 BerkShares or 20 dollars and 15 BerkShares/15 dollars for members/students/seniors.

Michael Shuman’s 2002 lecture to the Community Land Trust in the Southern Berkshires, “Going Local: New Opportunities for Community Economies,” edited by Hildegarde Hannum, is now available in pamphlet form from the Schumacher Center. Cost is five dollars each. Pay with BerkShares, cash, check, or credit card.