The Folly of ‘Buy Local’ Campaigns

Grand Junction’s Business Times quotes my dad Linn in an article today exploring a “buy local” campaign.

The article by Mike Moran cites the May 27 Free Press column by my dad and me on the topic and also summarizes our review of Bastiat.

My dad told the paper, “When you start ‘buying locally’ and not buying the best for the lowest cost, the allocation of resources gets distorted.” Specifically, the article goes on to review, spending more for the same product made locally makes the purchaser poorer and deprives other local businesses of the residual.

Moroever, Moran reviews, different “buy local” campaigns begin to compete for business. Certain Grand Junction businesses may benefit from a “buy local” campaign within the city, for example, but other businesses may lose if customers elsewhere also “buy local.” The result is that people in various communities spend a lot of time and energy depriving their neighbors of business. Meanwhile, consumers foolish enough to play along get hammered with higher prices.

Now, sometimes buying locally makes sense. For example, due to the soil, climate, and large river, the Grand Valley grows excellent peaches, grapes, and other fruit. Thus, it can indeed make sense to buy those products locally, especially considering the reduced transportation costs. It also makes sense for Grand Valley producers to export their products elsewhere, such as Denver markets. Yet, somehow, the “buy local” crowd in Junction doesn’t complain when Denver residents purchase those items from across the pass.

Many types of services cannot be provided at a distance. For example, my dad used to manage properties for a living, a job that requires extensive on-site labor. That’s simply not the sort of job a person can hire done by somebody living at a distance. But other sorts of services can be purchased at a distance; for example, one of my friends once worked at a national hotel calling center out of Grand Junction.

An interesting exercise would be to figure out how many businesses in Grand Junction export goods or services to other cities, states, and countries, and how many Grand Junction businesses depend on spending by travelers. Yet the hypocrites preaching “buy local” hardly complain about locals selling their goods or services elsewhere or doing businesses with people from out of town.

The basis of trade is comparative advantage. Different people and different regions should make what they’re good at, and exchange their produce for the goods and services others are relatively good at providing. The only thing the consumer should worry about is finding the best products at the best prices.