Sigh. The people who insist that trade is better when local drive me loco. Why do people feel compelled to reinvent economics, badly? Trade is good; more trade is better. You get ahead by specializing; by doing what you're best at, and trading for the rest.
Where does "local" come into that? How does your distance to me turn your product into something intrinsically better than somebody who has a product which I like more? Sure, shipping has a cost, but that (obviously) already biases trade in favor of the local. Why is it necessary to further bias trade in favor of people around you? Because they'll trade with you? But that presumes the answer that local trade is better than remote trade.
A bias in favor of the local is similar to a bias in favor of purple. If you want to buy mostly purple-colored products, fine, go ahead. Feel free. I won't stop you. But don't try to claim that purple products will make me a better person, make my community better, cure aids, and create world peace. They just won't. There's nothing magic about the color purple. Nor is there about local trade. It's just an irrational preference that requires sacrifice on your part, not a favorable attribute.
To see this, split your community in half. Half is on one side of the river, half on the other, and the bridge now needs to be rebuilt. The "Easties" are not local to you "Westies" anymore. They're now on the other side of the river, and to get there you have to drive a distance twenty times the distance across the bridge. Should you not trade with them because they're not local? Are you making your side of the river any better simply because you refuse to trade with the people on the other side of the river? What's wrong with them? Why do you hate them so much that you won't trade with them now that they're less local to you?
Can you see from this example that the difference between local and remote trade is simply a matter of opinion? That the only difference between local and remote trade is the cost of shipping? That there is a cost to drawing an arbitrary line and not trading with anyone remote? And that the cost of shipping is a reason to prefer local, but that is built into the price and will get weighed against all your other preferences, for size, weight, quality, quantity and, yes, purpleness.
posted at: 04:18 | path: /economics | permanent link to this entry