Buy local: at what cost?
Saturday morning at the Springridge farm in Milton.
While my daughter rides a horse, my girlfriend buys a fruit pie at the door.
It’s done. The Descôteaux family has bought “local.” Will I keep going down this path? Buy a saw at the village hardware store instead of Canadian Tire? No.
Buying local can sometimes help the environment. But its virtues stop here. Fresh food? Yes. Locally-made clothes, a bicycle made in Canada? Why not, as long as these products are competitive with regard to price and quality. But paying more to “encourage the local economy?” No thanks.
By spending more (too much) money on one item, you have less money left to spend at other local retailers. But, primarily, the very reason we are rich is that we trade. Chinese, German, Ontarian, or Québécois producers specialize in those areas where they excel. By exchanging our talents and resources, we gain access to a greater variety of cheaper, higher quality products. The more human beings who bring their talents and creativity to the table, the more society prospers. Buying locally reduces the number of participants. It deprives us of talent and stifles creativity.
A thought experiment: Imagine that the residents of your city only bought locally for 10 years. Now imagine stepping through the door of your favourite store. What do you see on the shelves? Very little. Not surprising: In a “local” economy, we have to produce everything for ourselves. As our talents are limited, you can kiss goodbye to iPods, Harry Potter books or Spanish wines.
And where do we draw the line? If buying Ontario products is good for Ontario, then restricting our purchases to Toronto products should be even better for Toronto. If I live in Willowdale, do I need to make sure my money “stays” in Willowdale? If the residents of Newtonbrook West start buying local, must they stop shopping in Newtonbrook East?
It’s serious. When Barack Obama imposes his “Buy American” clause for road construction, he is telling American businesses: Buy local. And hundreds of Canadians lose their jobs.
A growing number of pundits and politicians want to convince us — if not force us — to buy local. Wrong.
An economy grows — and its members grow richer — when new, less expensive ways of producing goods are discovered, not when people pay more than they have to. Saying no to the talents of others is a sure way of making us all poorer.
David Descôteaux est chercheur associé à l’Institut économique de Montréal.