Impoverish Yourself -- Buy Local!

May 1, 2008

In case there were any lingering doubts about Connecticut political elites’ economic illiteracy, a recent press conference attended by State Senate President Pro Tempore Donald Williams and Rob Simmons, the state’s “business advocate,” should silence skeptics for good.

The Democrat and Republican were in New London to help the Chamber of Commerce of Eastern Connecticut launch its new initiative “Buy Local. Shop Chamber.”

“When we buy local,” Williams lectured, “we are supporting local businesses, but we are also supporting our communities and families. And it’s what makes our state work.”

There’s no sound research to support the claim that limiting your purchases as much as possible to local vendors enriches “communities and families.” In fact, basic economic theory suggests it’s pure nonsense.

Economic efficiency -- and the resulting wealth it produces -- rests in large part on division of labor and specialization. Buying local merely for the sake of feeling good about oneself (an emotional condition leftists excel at) usually means paying more for goods and services. And when you pay more for things, the money you waste is no longer available to spend in other ways, which often include buying locally.

In 2006, Kelly Cobb, a professor at Drexel University, learned just how wasteful and costly it is to really buy local when she and some students set out to make a man’s suit using only materials obtainable within 100 miles of her home. Five hundred hours of labor by 20 different workers later, the result, according to Wired reporter Paul Adams, “wears its rustic origins on its sleeve.” (Translation: It looks like something a medieval peasant would wear.)

Autarky is a prescription for impoverishment. Just ask North Korea, the most “self-sufficient” place on the planet. India’s “autarkic period prior to the initial and nascent opening to globalization in 1975 was ridden with grave economic crises,” observes professor Baldev Raj Nayar of McGill University. And it’s a darn good thing so many foreigners don’t follow the “buy local” rule for aircraft engines, air conditioners, and power-plant turbines, or Connecticut’s export-dependent economy would suffer. (The U.S.-China Business Council reports that the Nutmeg State’s exports to China hit $565 million in 2007, up 53 percent from 2006.)

Don Boudreaux, an economist at George Mason University, thinks there’s something “highly unprogressive” about the creepy tribalism of buying local. It’s a throwback, he says, to the “antediluvian” notion that “our little group, our face-to-face community … these are the people who matter and those strangers out there are barbarians.”

Naked self-interest is another unattractive feature of buy-local mania. Howard Stillman -- husband of another Connecticut pol, State Senator Andrea Stillman -- was also on hand at the New London press conference, to shake his fist at the nefarious Internet and “big box” retailers that compete against his office-supply store. Buying local “evens the odds,” he huffed.

In fact, were it not for retail giants and online sellers, the state slow-but-steady economic decline would surely accelerate.

For decades, Connecticut politicians have done nearly everything possible to drive up costs for entrepreneurs. They’ve raised taxes, piled regulation on regulation, imposed zany land-use controls, mandated higher healthcare costs, and thwarted nearly every attempt to control energy costs.

Study after study confirms that the Nutmeg State is one of the least attractive places in the nation to run a for-profit enterprise. The Forbes/Pacific Research Institute “Index of Economic Freedom,” which measures “13 fiscal, 15 regulatory, eight welfare spending, three government size, and eight judicial variables,” ranks Connecticut as one of the least economically free states. (Only California and New York were more hostile to entrepreneurship and wealth-creation.) The burden of Big Government is expensive -- the Milken Institute’s Cost-of-Doing Business Index ranks Connecticut as one of the least affordable states. (In the continental U.S., only Massachusetts and New York have higher business costs.)

Killer costs are reflected in the price of the goods and services peddled by Connecticut’s business people. So it’s no surprise that Nutmeg State residents look for cheaper alternatives. Costco, Home Depot, Amazon and other vendors who can avoid at least some of Connecticut’s government-imposed costs enable Nutmeg State consumers obtain products more cheaply, thus boosting their purchasing power.

What Boudreaux calls the “Rousseauian romantic nonsense” of buy-local campaigns surely plays well in Connecticut. The career pols and bureaucrats -- as well as the earthy-crunchy types and welfare-seeking businesses who keep them in power -- lap it up. But real solutions to Connecticut’s severe economic problems lie elsewhere. Here’s a campaign worth launching: “Cut Taxes. Shrink Government.”

D. Dowd Muska is a writer, commentator and public-policy researcher. He can be reached at muskacolumn@cox.net.

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