Why we can't just shop our way to a better, more local economy
This recent TEDx talk by Stacy Mitchell, senior researcher at the Institute for Local Self-Reliance, was an influential discussion and one that I think is worth sharing as part of Washtenaw County’s “Think Local First” movement.
Here is my paraphrasing of her discussion, showing the key points Mitchell makes:
In 1773 citizens engaged in an act of corporate sabotage during the Boston Tea Party. Parliament passed the Tea Act, giving the British East India company an exemption to sell tea without paying tax. The purpose was to undercut local tea merchants and take their business, so the community revolted.
What ignited the Boston Tea Party was not so much a tax, but a corporate tax loophole.
Over the last 20 years, a handful of businesses have taken control of large swaths of the economy in much the same way. Walmart was a small player just 15 years ago, now it takes $1 of every $4 spent on food. And the future of retail looks even more concentrated: One third of everything we buy online is purchased from a single company.
Many people are beginning to question the wisdom of this and are changing the way they shop. But a purely consumer-based response is not likely to get us where we need to go because it doesn’t fully recognize how it got us where we are today.
For a long time the story that drove big business is “Bigger is Better.” It’s more efficient, more productive, and it out-performs. But this idea suffered a serious blow when we learned big banks are neither safer nor even more efficient than smaller ones. According to economists, banks reach their peak of efficiency when they are the size of a small institution. Beyond that they become top heavy with bureaucracy, explaining why you pay more fees than when you bank at a small bank or credit union.
And it's not just banking. In sector after sector you begin to see that consolidation is not serving our interests very well. Small farms produce nearly twice as much food per acre as big farms, with far less environmental impact. And the bargain that big box retail once seemed turns out to cost us far more than just lost income. This model has almost single-handedly diminished the middle class. Manufacturing and small businesses have shrunk. In exchange, the jobs supplied are so low-paying that many employees rely on food stamps.
So if they aren’t out-performing, how is it that these giant companies have become so dominant? The answer is much like the British East India Company: They have used their market power and policies to influence and rig the game.
There is nothing inevitable about the current structure of our economy as it is not the product of natural evolution. It’s the logical outcome of a set of policies.
This is one of those moments where you can affect change. We could begin by campaigning for turning the farm bill on its head and, instead of giving the most money to big farmers, divert it to local farmers feeding their neighbors. Or we could close all of those loopholes that give big businesses an advantage when paying their taxes. Or maybe we re-examine antitrust laws that have been on hiatus for 30 years and ask whether it's in our best interest to have one company control one third of e-commerce?
Some of the answers are right here, and largely there is citizen support for them. The issue that we have to grapple with is seeing our trips to the farmers market and the local bookstore not as the answer, but as a first step. Now is the time to turn this into a political movement.
Ingrid Ault is director of Think Local First in Washtenaw County.