Wednesday, July 16, 2014

The Small Mart Revolution

The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition
© 2007 Michael Shuman
285 pages



Independence has long ceased to be the American credo, supplanted by another: efficiency. Throughout the 20th century, small businesses supporting towns and families were devoured by larger firms, big businesses who gave little back to the communities they colonized other than an infrastructure burden and a handful of jobs. But Michael Shuman holds that it ain't over yet, and in The Small-Mart Revolution this entrepreneur argues that the titans have achilles' heels and citizens still have a choice.  A combination of economic study and political jeremiad, Revolution is concise and feisty.

Shuman establishes a dichotomy early on; this is a story of TINA versus LOIS.  TINA is the there-is-no-alternative mentality, the approach the United States has taken on in the modern age; it is the path of chasing and relying on big businesses for jobs, of sublimating the local economy to the globe. LOIS is the alternative, the locally-owned, import-substituting approach. Shuman begins with arguments for LOIS against TINA;  not only do big firms invariably disappoint those who hunt them,  accepting tax breaks and infrastructure put in on their behalf, only to skip town when another city offers an even better deal -- but the money they produce is lost to the host community. A Wal-Mart store forwards its take to Bentonville, Arkansas;  it doesn't invest it in local banks, and most of the wealth is spent elsewhere. Money spent at a local firm, however, owed and staffed by locals, is subject to a multiplier effect.  There are other considerations, like the folly of depending on fragile systems for vital resources. Why should a town rely on food shipped in from California when its own fields can produce enough to support the population?  Shuman is not blind to David Ricardo's theory of comparative advantage -- that given communities and places are better at doing some things than others, so towns that have fields and mineral deposits might be better off plopping down a mineral-using factory on those fields and having the food shipped in from a place that only has food to specialize in. This makes perfect sense when thinking about people who want oranges in Michigan; the cost of growing them in greenhouses would be prohibitively expensive when they can buy from Florida and California.  But why should people in Alabama buy pork from the Carolinas when only a generation ago, farms that incorporated livestock and agriculture were the norm?  There are factors other than cost to consider, writes Shuman;  shipping food from one side of the continent to the other is a waste of resources and an abusive of the environment, but the chief fact remains that we can't rely on the world's perpetual stability. Sooner or later a  wrench is going to be thrown into the global economy; it may be a financial crisis or peak oil,  but disruptions are inevitable. Centralization can be efficient up to a point,  but decentralization is the option for health and safety.  Reinvigorating local economies will not only restore vitality to our communities, but is prudent for national security as well.

All that is easy enough to say, but how is it to be done? Sure, a city in Alabama can buy local food --but local shoes? Local computers?   For Shuman, the purely-local economy is a hopeless ideal;  he doesn't wholly condemn big businesses, either,  but regards dependence on them as folly. If lessons can be taken from their business practices, so much the better, but his mission is to restore vitality to local communities, an impossible task without restoring the local economy. After making his initial case, Shuman offers advice on how citizens, small businesses, public officials, national leaders, and even globally-minded persons can rely on and expand local economies.. Chapters are committed to each, and end with a list of actions each kind of activist can pursue.  Individual steps are obvious; visit farmers markets, use local hardware stores, invest money in credit unions -- but business owners can ally together in cooperatives to gain some of the advantages of the Goliaths without compromising themselves or their places. Shuman also explores territory outside the usual advice by urging people to invest locally,  something not easy given legal structures that favor the New York exchange.  Dismantling the obstacles to helping big business flourish, from zoning laws to financial support for corporations that are wealthy enough to pay for their own parking lots, is also key.

This is in short quite an interesting book, of considerable interest to those concerned about the wellbeing of their communities, especially their economies.  While no community will ever stop participating in the global economy so long there is wind to fill the sails of ships,  providing more needs locally is a surer course to  curbing high unemployment and staying adaptable than TINA. Prudence is demanded, but Shuman offers ways we can restore communities without falling too much afoul of economic reality.

Related:
Strong Towns, Chuck Marohn. His blog has commented on growing local jobs rather than
Human Scale, Kirkpatrick Sale
The work of Wendell Berry, especially Home Economics
Suburban Nation,  Andres Duany et. al
Eaarth, Bill McKibben

2 comments:

  1. There are limits to an economy that depends on local sourcing. I grew up in a small town that has flourished in the decades since I left by taking advantage of the global economy.
    It is fine to rely on local farmers for seasonal foodstock, but there are many products, considered essential in the twenty-first century, that depend upon a vibrant global economy and, yes, multi-national corporations.
    For example, how would you manage your blog without the fruits of technology that is provided by global companies?

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  2. This is quite true, and some nations would be without hope were they not plugged into the global economy -- like the Netherlands and Japan, who built their wealth on trade and trade alone. But when so many towns have boarded-up or abandoned areas in their downtown areas, and a multitude of box stores outside that area proper, the primacy of local businesses seems clear. Government policies (at all levels) caused that wealth to be spilled out. If the opportunities for selling groceries, hardware, cloth, books, and everything else provided by generic big boxes were being captured by stores in the city center, the city as a whole would be much better off. That scheme is much better for cities, as small businesses generate more value per acre than the boxes. A city with its own industry creates feeder industries, but the big boxes don't deliver an opportunities for feeding other businesses like that. (Jane Jacobs' "The Economy of Cities" documents this wonderfully.)

    An example of the value per acre is here:
    http://www.strongtowns.org/journal/2012/1/2/the-cost-of-auto-orientation.html#.U8cAfvldV8E

    As you can tell, a large part of my interest in buying "local" is urban revitalization, in addition to disaster preparedness. That's why I like the author's advocacy of "Local First" campaigns -- not "local only".

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