Buying Local vs. Buying Cheap

Assumptions are dangerous propositions. Few cultural phenomena worldwide have an absolute value of black or white, yes or no. Societal acts deemed as right or wrong may vary greatly among cultures based on mores and a whole host of other factors.When we consider the implications of buying locally produced goods versus buying cheaper ones from across state lines or seas, we need a decision palette with many shades of gray, even some color. At stake are the environment, jobs, identities, and economies. Within those circles hinge the wellbeing of towns, cities, states, countries. And at the very hearts of those are people.In trying to decide upon an action that we feel is right in the global economy, we must ask ourselves questions that cut to the core. What are the benefits of buying locally produced goods versus buying goods that are produced more cheaply elsewhere? What criteria might we use to decide when it's best to buy local versus cheap, when the product has little or no discernable quality difference? And what if a discernable difference in quality does exist?The Big Picture"There's usually not a trade-off between what's right for the world and what's right for your pocketbook," says John Ryan, author of Seven Wonders: Everyday Things for a Healthier Planet, and research director of the Northwest Environment Watch. "Buying used goods, borrowing things from a friend, or just consuming less in general, are all cheaper than buying new products from the global economy."It's useful to work within a framework of common definitions because it gives us a specific context from which to consider options. Paul Vitale, a courtesy professor in the Department of Planning, Public Policy, and Management at the University of Oregon, offers such a framework. There are a couple of ways to consider the prospect of thinking globally and acting locally, he says. "I want developed countries (DCs) to buy from less developed countries (LDCs) so that we can stimulate LDC local economies and help people move out of poverty. However, within the U.S., I'm concerned about corporate giants taking out local businesses -- such as Wal-Mart knocking out the local butcher, candlestick maker, etc."Vitale offers two visions that extend this line of thinking. As a retired foreign service officer and former Peace Corps volunteer and staffer, his perspective embodies an interesting mix. Each vision has an inherent undertone of how we view ourselves. Do we don the suit that identifies us as citizens of our local communities or the one that reflects images of us as citizens of the world?On the one hand is Vitale's contention that as a DC we must buy production from the LDCs if we're to play a role in strengthening their economies. In his other vision of promoting local economies within the States, he leans toward saying don't buy from Wal-Mart and run the risk of putting the little person out of business, or don't purchase the BMW imported from Germany. "We need in our 'economic' models more consideration of the real costs of buying that BMW. It's not only costing the U.S. economy $50,000-plus, but there's the loss of jobs in the U.S. I don't think these ideas are mutually exclusive. Economists need to do better in their analysis of the impact of buying outside of the U.S."Ready to pull out that palette of varying hues, shades, and colors? Good. We're going to need it. While our next guest shares some similar ground with Vitale, his perspective may require some of us to paint polka dots among the black and white values.John Tschirhart is a professor of Environmental Economics in the Department of Economics and Finance at the University of Wyoming. "If someone says it would be better for our economy to buy locally, don't buy it," he says. "What is it that we're trying to do with an economy -- make ourselves as happy as possible given our limited resources. If buying locally means we buy goods that use up more resources than would be used up somewhere overseas, we're not doing anyone any good."Tschirhart asserts that some interesting implications exist in the trade-off between a good standard of living and the environment. Pretend that a dictator shows up in your town tomorrow. As an omnipotent ruler, he single-handedly causes the prices of everything to double overnight. The results? For starters, our plush standard of living would drop off significantly. But what about the environment? Chances are fewer items would be sold, hence fewer natural resources would be used, so the environment might actually do better. But in many other ways, we'd all be worse off, perhaps to an extreme extent. If we didn't have electricity available at night, Tschirhart continues, we couldn't conduct Sierra Club meetings. But, if our standard of living dropped severely, we may stop giving a hoot about the environment. This, Tschirhart contends, is probably the case in many LDCs.Okay. So the guy has a point. And a pretty good one. What else is up his sleeve?"Generally, trade is a good thing. If it weren't, we wouldn't be finding evidence of the earliest humans, hundreds of thousands of years ago, engaging in trade," he says. "If you can brew beer better than me, and I can grow peanuts better than you, it behooves us not to brew our own beer and grow our own peanuts, but rather for you to brew and me to grow and then trade. Pushing 'local' too hard denies this comradeship advantage."To illustrate his point, Tschirhart proposes another extreme but poignant example. This time, suppose your local business- incubator program chose to support an entrepreneur who wants to grow bananas in, say, Chicago. If significant cash was bankrolled for the appropriate greenhouse and care, it would be feasible to grow them in such an unlikely place. And if the sponsoring organization lent sufficient funds, it could enable the entrepreneur to price those bananas as cheaply as ones from Central America.Putting on our world citizen suit, the world would not be a better place if we bought bananas from Chicago because the Windy City is not a good place to grow them. Why not? Because significantly more natural and man-made resources would have to be used to obtain a Chicago variety versus a Central American one. Tschirhart says that the same idea holds true for buying local products: if no real production advantage exists for the locals, it's logical to question if spending more on locally-produced items helps resource conservation."Having said all of this, one could argue, 'So what, let's only buy locally made goods even if they're far more expensive.' If the country did this uniformly, then overall many fewer goods would be produced. Given American consumption levels, many of us could cut back on consuming for sure, but who would bear the greatest burden? Not the haves, but the have-nots would suffer the most as they would have to cut back from meager existences to...?"These are interesting and thought-provoking points indeed. And there's nothing plain white or plain black about them. Whether we agree with Tschirhart's views or not, they serve to give us pause when we're tempted to paint the issues with a broad brush.An important purchasing consideration for those of us who consider ourselves environmentalists is whether goods from overseas are made in nations that have weak environmental regulations. If so, then our first inclination may be to buy the U.S. product because of better environmental protections that were in effect in the production of that product. But is it that black and white? I used to think so. Now I re-think it and, while I may still opt to choose that "made in the U.S.A." item, I've added another grayscale layer of consideration."There is a long-term consequence of not buying overseas [products] and having those economies not do as well," says Tschirhart. "And then the day when they are affluent enough to worry about the environment is postponed." Let's look at the Tschirhart theory behind this rationale.Take, for example, Wal-Mart versus Bob's Local Shop, he says. If products are cheaper at Wal-Mart, it's for many reasons. Maybe one of these is that Wal-Mart goods are mass-produced. If so, these products are subject to economies of scale in production. If they're shipped in large numbers, economies of scale in shipping also apply. "Economies of scale are good for us to take advantage of," says Tschirhart. "It means that goods are cheaper to buy, yes, but the reason they're cheaper to buy is because they're cheaper to produce and deliver. This is good for society, because cheaper to produce means that fewer resources were used in their production -- resources such as our labor, equipment, and what we environmentalists worry about the most, natural resources...air, water, coal, oil, minerals, etc."Another key reason why overseas goods may be cheaper at Wal-Mart is that they're made in countries where there's a comparative advantage in the goods. Tschirhart acknowledges that one reason for an advantage is the cheap labor in many LDCs. While he in no way advocates sweatshops, Professor Tschirhart believes that some of those overseas workers may prefer to have some type of job to no job. "That these countries are producing and trading at all may mean that someday they will eventually raise their living standards and then, and probably only then, will they be in a position to worry about their environments."What other considerations should we keep in mind when deciding between a local product and a foreign good when there's no discernable quality difference to the consumer between the two? If we have a choice between California rice and Vietnamese rice, for example, which should we pick? Even for Tschirhart, the "right" answer is a little fuzzy in the scenario he offers. On the one hand, he explains, you have California rice that's cheap because of deep subsidies, primarily in water, to California farmers. When the customer looks at the California price, it appears cheap. What's not as obvious is that the actual cost of the California rice to the physical environment is significant and not included in marketplace considerations because of the subsidies. In actuality, the Vietnam rice may be less environmentally costly because that country offers much better naturally occurring growing conditions, and its environment may not need to be altered to the extent that it does in California.Bottom LineIt should come as no surprise to any of us that no hard and fast rule exists when it comes to buying local versus buying cheap. Our decisions will vary based on our biases, how we filter the information we learn about the pros and cons, and ultimately what individual rationale we choose to put ahead of other implications.Ron LaCoss, an environmental science teacher at Landon School in Bethesda, Maryland, is a strong supporter of buying locally if it's not too far away from where you live. "Buying local goods cuts down on the shipping distance. Most goods in the U.S. are hauled by truck. Trucks going long distances use more fuel so they pollute more, cause more traffic, and do more damage to roads. I read that the average good travels some 1,200 miles from source to buyer!" He's all for locally grown produce, which he finds to be fresher, often better tasting, and requiring less use of preservatives, additives, etc. In buying locally, LaCoss says, "You are supporting local workers, farmers, artisans, etc., who need job security and who abide by our environmental laws."Valid points? Absolutely. He also leaves us with a pearl. "No matter what you buy, it's hard to know where it was made. Maybe the best question to ask is 'Do I really need to buy this at all?' Put wants and needs into perspective before buying anything, and you can avoid the question of local versus global all together." LaCoss acknowledges that this is not always possible, but it's worth a try.Ryan shares a similar philosophy. "You don't need an eco-label to know that the best kind of gasoline, or beef, or electricity to buy...is less of it."The issue of local versus cheap has to be addressed on a case-by-case basis. How we define local, again, depends on the citizen-suit we choose, the product under consideration, and how open we're willing to be in defining the term.Central American bananas may represent an appropriate "local" source of bananas for Chicago because they may be the closest area of the globe that is conducive to growing this fruit efficiently. They may also represent the best "local" option given all the elements of the process, including delivery, that must be taken into account in getting that banana to our grocery store.In other instances, the physically local option is going to come ahead as the better choice. Organic grapes from California may far outweigh those from Chile in environmental impact alone, given that U.S. environmental regulations are more protective of the environment. Yet, income to Chile's grape growers will help put them in the position to exercise more concern about the environment."The secretly powerful player here is you and me," says Ryan. "Consumer demand fuels the global economy. And consumers' tremendous powers can be used to reshape it." That's why our choices need to be well informed. That's why we need to have our palette of color values handy and discard the assumption that we can decide as if it were a black or white matter. It's why we need to be open-minded when considering every purchasing choice.Globalization, in some people's views, is a bad thing. From where I sit, it's just a matter of perspective.

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