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ECONOMY: The Competitiveness of Local Living Economies

ECONOMY: The Competitiveness of Local Living Economies

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Published by permaMedia
ECONOMY: The Competitiveness of Local Living Economies
ECONOMY: The Competitiveness of Local Living Economies

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Published by: permaMedia on Nov 11, 2010
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The Post Carbon Reader Series: Economy
The Competitiveness ofLocal Living Economies
By Michael H. Shuman, JD
About the Author
Michael Shuman is director of research and public policy at theBusiness Alliance for Local Living  Economies(BALLE). He holds an AB with distinctionin economics and international relations from StanfordUniversity and a JD from Stanford Law School. He hasauthored, co-authored, or edited seven books, includ-ing 
Te Small Mart Revolution: How Local Businesses Are Beating the Global Competition
(2006) and
Going  Local: Creating Self-Reliant Communities in the Global  Age
(1998). Shuman is a Fellow of Post Carbon Institute.Post Carbon Institute© 2010613 4th Street, Suite 208Santa Rosa, California 95404 USAThis publication is an excerpted chapter from
he Post Carbon Reader: Managing the 21st Century’sSustainability Crises
, Richard Heinberg and DanielLerch, eds. (Healdsburg, CA: Watershed Media, 2010).For other book excerpts, permission to reprint, and purchasing visithttp://www.postcarbonreader.com.
Economic localization (“localization” in the rest of this chapter) offers the key to solving a growing num-ber of global problems, including peak oil, climatedisruption, and financial meltdowns. Yet the percep-tion remains that this solution is very costly, becauselocal goods and services supposedly are more expensivethan their global alternatives. American consumers areconvinced that “big-box” stores and bigger businessesmean lower prices—”always,” in the Wal-Mart vernac-ular. And not a few localization activists concur, argu-ing that consumers should nevertheless be prepared to pay more to responsibly avert the calamities of a car-bon-dependent world.In fact, local goods and services are already compet-ing remarkably well in the marketplace—and theyare likely to do better in the near future. This chap-ter lays out why cost effectiveness actually is a reasonto
localization and argues that the only thing standing in the way of localization flourishing is, oddly, policy-makers committed to propping up increasinglynoncompetitive global corporations.
A Local Living Economy
Ever since 2001, when the Business Alliance for LocalLiving Economies (BALLE) was founded, the term“local living economy” has become shorthand for a pragmatic approach to localization. Two principles lieat its core:1. The wealthiest communities are those with thehighest percentage of jobs in businesses that arelocally owned. A growing body of evidence sug-gests that local ownership in businesses pumps upthe multiplier effect of every local dollar spent, which increases local income, wealth, jobs, taxes,charitable contributions, economic development,tourism, and entrepreneurship.2. The wealthiest communities are those that maxi-mize local self-reliance. This doesn’t mean thatthey cut themselves off from global trade. But theyrely on trade only for the diminishing universe of goods and services that they cannot competitively provide for themselves.Both principles would be very difficult to vindicate, if not impossible, were global businesses ultimately morecompetitive than local ones. If the scale of business hasto be large for them to compete, then it would be dif-ficult for communities to embrace locally owned firms,because larger-scale businesses require global poolsof owners. Nor could communities possibly achievegreater self-reliance, because larger-scale businessesimply greater reliance on trade. Fortunately, there’s powerful evidence that local businesses in the United
The only thing standing inthe way of localization ispolicy-makers committed topropping up noncompetitiveglobal corporations.

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