By Jacob C. Maichel
In the 1800s time was very loose to say the least. People could not move faster than the speed of horses so schedules were pretty tentative, which wasn’t a big deal in their relatively slow moving lives. As the United States began to industrialize and develop factories, steamboats, mail, etc time needed to be more uniform inside of towns. Each town decided on its own official town time creating thousands of unique time zones across the United States. Michigan, for example, had 38 different times alone!
With the invention of the railroad everything changed as the country opened up. A trip from New York to Chicago that had taken a month by horse could now be completely in two days on a train. Variations in times was not only a scheduling nightmare but ultimately a safety hazard as trains sometimes hit each other due to timing confusions. The railroad’s solution was to make each train its own traveling “time zone”, so that no matter where it went it was based on the time where the line was based out of.
During this period William F. Allen was the secretary general of the time convention and had no shortage of people reaching out to him pleading to change the outdated time system. By the 1870s trains were common across the country as the United States shifted from a collection of towns to one uniform country. In the 1980s the scientific community struggled with meteorologists not being able to collaborate on anything, such as times of shooting star sightings. Allen decided to take on the task of standardizing time as we know it by splitting the country into zones.
Allen begins by going to the Boston Railroads with the idea. They promptly deny him stating they only set time via the Harvard observatory. Rather than admit defeat Allen simply convinces the Harvard observatory to adopt his plan and soon after the city of Boston follows. Allen next approaches the city of New York arguing time may become known as Boston Time if they reject him, which was all the convincing needed to get New York to agree.
As more cities began to adopt the plan there was push back. One preacher was so against it he was quoted saying “we follow God’s time not railroad time” and then smashed his watch on the pulpit. Another notable objection came from the attorney general who stated that government buildings go off of D.C. time. However, enough States adopted Allen’s plan that his objection was ignored. The plan continued and Allen’s team mapped out 4 different time zones that we are familiar with today.
At 12 noon on November 18, 1883 all time is set to become standardized. They used telegraph lines to notify balls across the country of the exact moment to drop and start counting time. These dropping balls eventually give way to the traditional ball dropping in New York every new year. Though there was still some disagreements in 1918 standardized time was officially adopted by the U.S. Federal Government, and in 1966 they abolished all local times.
References
Helm, Sally, Host. Episode 918 “The Day Of Two Noons”. Planet Money, NPR, 7 June, 2019. https://www.npr.org/2019/06/07/730727038/episode-918-the-day-of-two-noons
Jacob C. Maichel is a Graduate Assistant at the Gwartney Institute and an MBA student at Ottawa University
Showing posts with label local. Show all posts
Showing posts with label local. Show all posts
Monday, July 22, 2019
Thursday, May 30, 2019
China Tariff Battle Impacts Ottawa Kansas
by Levi A. Russell
This originally appeared as a column at the Ottawa Herald
When we read about the many aspects of the current trade war with China, it’s difficult to see how big international policy decisions affect us here in Ottawa. This week I’d like to discuss recent events in the trade war with China and how they might affect us. To do that, let’s take a big picture look at the trade war. Though there are many weapons in a trade war, tariffs are the primary weapon of choice for the Trump administration in its war with China. A tariff is a tax on an import, but as we will see, it’s a complicated tax.
Earlier this month, the U.S. Trade Representative imposed a 25% tariff on $200 billion worth of Chinese goods imported to the U.S. The 25% tariff is paid explicitly by importers of Chinese goods, but other parties are implicitly affected by the tax. In economics, we say that the incidence of the tax falls on the aforementioned importers, Chinese exporters, and U.S. consumers. The importer passes on some or all of the tariff in the form of higher prices for U.S. consumers. This higher price pushes down the quantity that consumers want to buy, resulting in lower revenue for Chinese exporters.
The tariffs will be applied to over 5,000 different products; some are consumer goods (i.e. goods we buy and consume directly) and others are intermediate goods, which are used by U.S. manufacturers to make other products. Some examples of goods that will be taxed under this tariff are grain, candies, pasta, beverages, minerals, ores, slag, ash, mineral oils, inorganic chemicals used in manufacturing, fertilizers, soaps, plastics, rubber, wood, fabric, stone, ceramics, flax, cotton, wool, aluminum, furniture, clocks, ships and boats, electronics, and many other goods. We can expect that the prices of many of the consumer goods listed here will increase here in the U.S. and the prices of other goods made from the intermediate goods will also rise to some extent (though not likely a full 25%).
A few days after the U.S. Trade Representative announced the 25% tariff, China retaliated with a promise to increase tariffs on $60 billion worth of goods exported to China. These tariffs will directly impact importers in China, but will also affect industries in the U.S. that export to China, as well as Chinese consumers. The broad categories of goods that will fall under these higher tariffs are food products, building materials, furniture, bedding, footwear, clocks, light fixtures, musical instruments, parts for locomotives, boats and yachts, electronics, and chemicals.
Here in Ottawa, the U.S. tariffs will likely have a bigger impact than the Chinese tariffs. Like the rest of the country, we will likely see a rise in the prices of many consumer goods. Some of the manufacturing and construction businesses in Ottawa will likely see an increase in their costs, especially if they buy raw materials or intermediate products directly from China. They will either have to pay higher prices for these inputs or find other sources either in the U.S. or another country.
Even though I am an economist, I will not try to tell you all of this is bad. The expected reductions in employment and GDP in the U.S. are mild, though they will likely be felt to a greater degree in specific areas of the country. These economic costs might be worth it if they result in policy changes that are favorable to U.S. interests. For all its improvements in the past few decades since it slaughtered tens of millions of its own people, China is still a Communist country. They still send Christians and Muslims to “re-education camps,” micromanage their citizens’ lives with an authoritarian social credit system, and support North Korea, which actively tortures its own people. China has repeatedly stolen our intellectual property and is increasing its spying efforts in the U.S.
The use of the term “trade war” is apt. The tariff battles may impact the economy in the short run, but winning the war is the goal. It’s up to us and our elected officials to determine whether the economic costs are worth the strategic and security-related benefits.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
This originally appeared as a column at the Ottawa Herald
When we read about the many aspects of the current trade war with China, it’s difficult to see how big international policy decisions affect us here in Ottawa. This week I’d like to discuss recent events in the trade war with China and how they might affect us. To do that, let’s take a big picture look at the trade war. Though there are many weapons in a trade war, tariffs are the primary weapon of choice for the Trump administration in its war with China. A tariff is a tax on an import, but as we will see, it’s a complicated tax.
Earlier this month, the U.S. Trade Representative imposed a 25% tariff on $200 billion worth of Chinese goods imported to the U.S. The 25% tariff is paid explicitly by importers of Chinese goods, but other parties are implicitly affected by the tax. In economics, we say that the incidence of the tax falls on the aforementioned importers, Chinese exporters, and U.S. consumers. The importer passes on some or all of the tariff in the form of higher prices for U.S. consumers. This higher price pushes down the quantity that consumers want to buy, resulting in lower revenue for Chinese exporters.
The tariffs will be applied to over 5,000 different products; some are consumer goods (i.e. goods we buy and consume directly) and others are intermediate goods, which are used by U.S. manufacturers to make other products. Some examples of goods that will be taxed under this tariff are grain, candies, pasta, beverages, minerals, ores, slag, ash, mineral oils, inorganic chemicals used in manufacturing, fertilizers, soaps, plastics, rubber, wood, fabric, stone, ceramics, flax, cotton, wool, aluminum, furniture, clocks, ships and boats, electronics, and many other goods. We can expect that the prices of many of the consumer goods listed here will increase here in the U.S. and the prices of other goods made from the intermediate goods will also rise to some extent (though not likely a full 25%).
A few days after the U.S. Trade Representative announced the 25% tariff, China retaliated with a promise to increase tariffs on $60 billion worth of goods exported to China. These tariffs will directly impact importers in China, but will also affect industries in the U.S. that export to China, as well as Chinese consumers. The broad categories of goods that will fall under these higher tariffs are food products, building materials, furniture, bedding, footwear, clocks, light fixtures, musical instruments, parts for locomotives, boats and yachts, electronics, and chemicals.
Here in Ottawa, the U.S. tariffs will likely have a bigger impact than the Chinese tariffs. Like the rest of the country, we will likely see a rise in the prices of many consumer goods. Some of the manufacturing and construction businesses in Ottawa will likely see an increase in their costs, especially if they buy raw materials or intermediate products directly from China. They will either have to pay higher prices for these inputs or find other sources either in the U.S. or another country.
Even though I am an economist, I will not try to tell you all of this is bad. The expected reductions in employment and GDP in the U.S. are mild, though they will likely be felt to a greater degree in specific areas of the country. These economic costs might be worth it if they result in policy changes that are favorable to U.S. interests. For all its improvements in the past few decades since it slaughtered tens of millions of its own people, China is still a Communist country. They still send Christians and Muslims to “re-education camps,” micromanage their citizens’ lives with an authoritarian social credit system, and support North Korea, which actively tortures its own people. China has repeatedly stolen our intellectual property and is increasing its spying efforts in the U.S.
The use of the term “trade war” is apt. The tariff battles may impact the economy in the short run, but winning the war is the goal. It’s up to us and our elected officials to determine whether the economic costs are worth the strategic and security-related benefits.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
Thursday, April 11, 2019
Are We Morally Permitted to Eat Animals?
by Jacob C. Maichel
The Gwartney Institute just held its most recent “Ottawa Minds and Unwined” and it was the first one I have been able to attend. The speaker for this event was a philosophy professor, Dr. Justin Clarke, and the title of his presentation was “Are we morally permitted to eat animals?” I was excited to hear Dr. Clarke’s take on an interesting topic and it offered a unique and refreshing perspective. I wrote this post based on the speech because I thought it was fantastic!
The speech began by laying a foundation describing assertions from Australian philosopher Peter Singer’s famous 1975 book Animal Liberation: A New Ethics for our Treatment of Animals. This work has become the basis of the modern animal liberation movement’s understanding of humanity's relationship with animals. Once Singer established animals are capable of suffering he takes a very utilitarian approach to minimize said suffering in animals and humans alike. Dr. Clarke outlined 4 premises and 2 conclusions:
Premise 1: All suffering is equal (morally)
Premise 2: Animal experimentation causes unnecessary suffering.
Conclusion 1:Animal experimentation should stop unless we would do the same experiments on humans.
Premise 3: Animal consumption causes unnecessary suffering.
Premise 4: We are morally required to feed ourselves in a way to minimize suffering.
Conclusion 2: We should be vegetarian or vegan.
Once these were explained, Dr. Clarke then began to give evidence to support premise 2 and 3 in particular. For premise 2, he pointed to a number of past and recent experiments that were extremely damaging to animals. Support for premise 3 comes from the atrocities that occur in so-called factory farming, suggesting we should eat in a way that minimizes animal suffering. The needless suffering inherent in meat diets suggests a moral hierarchy of diets:
Least suffering: Vegetarian/Vegan
Omnivore
Most suffering is carnivore
Dr. Clarke then dives farther in giving a in depth ranking of suffering caused by diet which goes;
Most preferable: Vegan
Vegetarian
Pescertarian (fish only)
Principled Omnivore (looks into how the animals are raised, i.e. eats free range)
Plebian Omnivore (does not care where meat comes from)
Least preferable: Carnivore
Veganism surely causes less suffering to animals than a monster carnivorous diet, right? According to Dr. Clarke, that is incorrect! His list would actually go
Most preferable: Principled Omnivore
Vegan
Vegetarian
Pescatarian
Plebian Omnivore
Least Preferable: Carnivore
How can this be true? Dr. Clarke’s point was that we treat vegan and vegetarian diets as if they do not cause suffering, which is false. Evidence of this is shown by analyzing the per 100kg usable protein in pastured cattle production vs grain production. For cattle there are 2.2 deaths per 100kg, compared to 55 deaths for the same amount of protein in grain! Dr. Clarke pointed out the gruesome end these animals suffer in the grain production process.
The victims of grain production are mice which are often discounted by many people but these animals sing to their young and have at least the same capacity for suffering as chickens. Therefore, if it is true that all suffering is equal, principled omnivores cause the least amount of suffering (ahead of vegans!). Does that mean everyone should become a principled omnivore according to Dr. Clarke? No! This is because premise four is not true according to him.
Dr. Clarke himself makes four well drawn conclusions in his fantastic presentation. First is that suffering surely counts, but not equally. Next there are better and worse ways to eat. Third is that we are not morally all required to eat the best way but should be conscious of eating in better ways. Lastly, if all this is correct Dr. Clarke says we can “put down our pitchforks," although for some it may be more difficult than others.
Dr. Clarke’s speech is part of a recurring Gwartney Institute event held at UnWined at Studio 111 which brings in a new speaker the first Thursday every month. The presentations are about 20 minutes in length with questions and optional conversation after. Please join us next time when Professor Jaime Fuentes will be speaking about Bitcoin!
Jacob C. Maichel is a Graduate Assistant at the Gwartney Institute and an MBA student at Ottawa University
The Gwartney Institute just held its most recent “Ottawa Minds and Unwined” and it was the first one I have been able to attend. The speaker for this event was a philosophy professor, Dr. Justin Clarke, and the title of his presentation was “Are we morally permitted to eat animals?” I was excited to hear Dr. Clarke’s take on an interesting topic and it offered a unique and refreshing perspective. I wrote this post based on the speech because I thought it was fantastic!
The speech began by laying a foundation describing assertions from Australian philosopher Peter Singer’s famous 1975 book Animal Liberation: A New Ethics for our Treatment of Animals. This work has become the basis of the modern animal liberation movement’s understanding of humanity's relationship with animals. Once Singer established animals are capable of suffering he takes a very utilitarian approach to minimize said suffering in animals and humans alike. Dr. Clarke outlined 4 premises and 2 conclusions:
Premise 1: All suffering is equal (morally)
Premise 2: Animal experimentation causes unnecessary suffering.
Conclusion 1:Animal experimentation should stop unless we would do the same experiments on humans.
Premise 3: Animal consumption causes unnecessary suffering.
Premise 4: We are morally required to feed ourselves in a way to minimize suffering.
Conclusion 2: We should be vegetarian or vegan.
Once these were explained, Dr. Clarke then began to give evidence to support premise 2 and 3 in particular. For premise 2, he pointed to a number of past and recent experiments that were extremely damaging to animals. Support for premise 3 comes from the atrocities that occur in so-called factory farming, suggesting we should eat in a way that minimizes animal suffering. The needless suffering inherent in meat diets suggests a moral hierarchy of diets:
Least suffering: Vegetarian/Vegan
Omnivore
Most suffering is carnivore
Dr. Clarke then dives farther in giving a in depth ranking of suffering caused by diet which goes;
Most preferable: Vegan
Vegetarian
Pescertarian (fish only)
Principled Omnivore (looks into how the animals are raised, i.e. eats free range)
Plebian Omnivore (does not care where meat comes from)
Least preferable: Carnivore
Veganism surely causes less suffering to animals than a monster carnivorous diet, right? According to Dr. Clarke, that is incorrect! His list would actually go
Most preferable: Principled Omnivore
Vegan
Vegetarian
Pescatarian
Plebian Omnivore
Least Preferable: Carnivore
How can this be true? Dr. Clarke’s point was that we treat vegan and vegetarian diets as if they do not cause suffering, which is false. Evidence of this is shown by analyzing the per 100kg usable protein in pastured cattle production vs grain production. For cattle there are 2.2 deaths per 100kg, compared to 55 deaths for the same amount of protein in grain! Dr. Clarke pointed out the gruesome end these animals suffer in the grain production process.
The victims of grain production are mice which are often discounted by many people but these animals sing to their young and have at least the same capacity for suffering as chickens. Therefore, if it is true that all suffering is equal, principled omnivores cause the least amount of suffering (ahead of vegans!). Does that mean everyone should become a principled omnivore according to Dr. Clarke? No! This is because premise four is not true according to him.
Dr. Clarke himself makes four well drawn conclusions in his fantastic presentation. First is that suffering surely counts, but not equally. Next there are better and worse ways to eat. Third is that we are not morally all required to eat the best way but should be conscious of eating in better ways. Lastly, if all this is correct Dr. Clarke says we can “put down our pitchforks," although for some it may be more difficult than others.
Dr. Clarke’s speech is part of a recurring Gwartney Institute event held at UnWined at Studio 111 which brings in a new speaker the first Thursday every month. The presentations are about 20 minutes in length with questions and optional conversation after. Please join us next time when Professor Jaime Fuentes will be speaking about Bitcoin!
Jacob C. Maichel is a Graduate Assistant at the Gwartney Institute and an MBA student at Ottawa University
Thursday, April 4, 2019
The Importance of Trade to Local Economies
by Levi A. Russell
This post originally appeared in the Ottawa Herald.
In my last column, I made what I think was the best case for “buy local” and economics professor can make. Supporting your local community is a very important part of being a good citizen and a smart risk manager, but are there exceptions? Are there cases in which it might be sensible to support trade from other places? I think there are, and I’ll explain two cases in this column.
The first case is relatively straightforward: you can’t grow coconuts in Kansas. Unless you have a sophisticated network of firms operating in concert under multiple nations’ laws to bring about international trade (or a very strong barn swallow that recently flew south for the winter), you can’t buy coconuts here in Ottawa. The network that brings our soybeans to Japan and their cars back here is responsible for giving us a wide range of products we would not enjoy otherwise.
The second case takes a bit more thought. The production of many goods we enjoy couldn’t happen without investment in large-scale operations that may supply goods for consumers or other businesses over a large area. A simple example will help us get started.
Suppose you want to have pizza for supper. You might have all the ingredients you need at home and likely have an oven that will bake the crust nice and crispy. While this might work well for you, it might be nice if you could get someone else to make the pizza for you. Maybe you’re short on time or didn’t want to pay a lot of money for high-quality cheese at the grocery store. Maybe you’re just not a great pizza chef.
Another option would be to order the pizza from someone else. A pizza restaurant very likely has a large, expensive, specialized oven and a very large refrigerator filled with ingredients. These pieces of equipment allow the restaurant’s employees to efficiently make hundreds of pizzas per day; certainly more than the employees themselves could eat.
This large-scale production is great for all of us who enjoy pizza because it means the owners and employees can specialize in making pizzas and can buy ingredients at a lower cost per pound than the rest of us are able on our weekly trip to the store. The restaurant’s specialization and lower cost means the rest of us can enjoy tasty food on demand.
The comparison between household production and specialized production enabled by investment in fixed assets like commercial pizza ovens helps us understand the second exception to our buy local rule: sometimes the cost of production is too high for local production. Sometimes it’s so high it outweighs the benefits of local commerce I laid out in my last column.
Consider an example from our own backyard, Kalmar Ottawa. Kalmar Ottawa has been in business for over 60 years and has produced over 65,000 “terminal trucks” which are low-speed trucks used to move trailers around at shipping terminals. It is the leading producer of these trucks, which are all manufactured here in Ottawa and sold through dealers around the country.
Given the specialized knowledge and expensive machinery needed to manufacture these trucks, it wouldn’t be sensible to expect a shipping terminal to produce them on their own. It also wouldn’t make sense for there to be dozens of smaller manufacturing facilities all over the country making these trucks. No, we can all benefit when these trucks are made in one larger facility. It minimizes the cost of production and allows all the knowledge needed to be located in one place to maximize efficiency in production.
In addition to the benefits associated with the jobs and other commerce generated by Kalmar Ottawa, we also benefit indirectly from Kalmar Ottawa’s centralized production of their trucks. The coconuts we ship from the tropics get here a little more efficiently and at a little bit lower cost thanks to Kalmar Ottawa’s efficient business model. Whether those coconuts end up in a pina colada or a cream pie, I think we can all appreciate this exception to buying local.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
This post originally appeared in the Ottawa Herald.
In my last column, I made what I think was the best case for “buy local” and economics professor can make. Supporting your local community is a very important part of being a good citizen and a smart risk manager, but are there exceptions? Are there cases in which it might be sensible to support trade from other places? I think there are, and I’ll explain two cases in this column.
The first case is relatively straightforward: you can’t grow coconuts in Kansas. Unless you have a sophisticated network of firms operating in concert under multiple nations’ laws to bring about international trade (or a very strong barn swallow that recently flew south for the winter), you can’t buy coconuts here in Ottawa. The network that brings our soybeans to Japan and their cars back here is responsible for giving us a wide range of products we would not enjoy otherwise.
The second case takes a bit more thought. The production of many goods we enjoy couldn’t happen without investment in large-scale operations that may supply goods for consumers or other businesses over a large area. A simple example will help us get started.
Suppose you want to have pizza for supper. You might have all the ingredients you need at home and likely have an oven that will bake the crust nice and crispy. While this might work well for you, it might be nice if you could get someone else to make the pizza for you. Maybe you’re short on time or didn’t want to pay a lot of money for high-quality cheese at the grocery store. Maybe you’re just not a great pizza chef.
Another option would be to order the pizza from someone else. A pizza restaurant very likely has a large, expensive, specialized oven and a very large refrigerator filled with ingredients. These pieces of equipment allow the restaurant’s employees to efficiently make hundreds of pizzas per day; certainly more than the employees themselves could eat.
This large-scale production is great for all of us who enjoy pizza because it means the owners and employees can specialize in making pizzas and can buy ingredients at a lower cost per pound than the rest of us are able on our weekly trip to the store. The restaurant’s specialization and lower cost means the rest of us can enjoy tasty food on demand.
The comparison between household production and specialized production enabled by investment in fixed assets like commercial pizza ovens helps us understand the second exception to our buy local rule: sometimes the cost of production is too high for local production. Sometimes it’s so high it outweighs the benefits of local commerce I laid out in my last column.
Consider an example from our own backyard, Kalmar Ottawa. Kalmar Ottawa has been in business for over 60 years and has produced over 65,000 “terminal trucks” which are low-speed trucks used to move trailers around at shipping terminals. It is the leading producer of these trucks, which are all manufactured here in Ottawa and sold through dealers around the country.
Given the specialized knowledge and expensive machinery needed to manufacture these trucks, it wouldn’t be sensible to expect a shipping terminal to produce them on their own. It also wouldn’t make sense for there to be dozens of smaller manufacturing facilities all over the country making these trucks. No, we can all benefit when these trucks are made in one larger facility. It minimizes the cost of production and allows all the knowledge needed to be located in one place to maximize efficiency in production.
In addition to the benefits associated with the jobs and other commerce generated by Kalmar Ottawa, we also benefit indirectly from Kalmar Ottawa’s centralized production of their trucks. The coconuts we ship from the tropics get here a little more efficiently and at a little bit lower cost thanks to Kalmar Ottawa’s efficient business model. Whether those coconuts end up in a pina colada or a cream pie, I think we can all appreciate this exception to buying local.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
Thursday, March 28, 2019
Economics of "Buy Local"
by Levi A. Russell
This post originally appeared in the Ottawa Herald.
On March 7th, the Gwartney Institute hosted a debate on the Ottawa University campus. I won’t name my opponent, but the two of us debated the following resolution: “Buy Local” is a Bad Idea. My opponent has no problem with shopping at local stores; our disagreement was about the economic soundness of preferring local stores even when they don’t deliver low prices or superior quality.
In the debate, I defended the following idea: It makes good economic sense to support local businesses if we consider the possible risks associated with not buying local. By “local businesses,” I don’t necessarily mean small sole proprietorships located exclusively within a town. From my view, supporting big box stores and franchises in your community is an integral part of a sensible version of “buy local.” After all, the managers, employees, and franchise owners are also part of your local community!
Here’s why: commerce builds community, and community brings security. We don’t have to look far to see communities that have declined economically to the point that they are struggling to maintain basic services. Hospitals are closing, schools are turning into nursing homes, and home values are dropping in areas that once supported thriving communities. Is there something we can do to prevent this decline?
Certainly there are instances in which the economic factors that contribute to the decline of a town or community within a larger city are inevitable. However, this is not always the case. The presence of entertainment and retail businesses in a locality is as important as organized events to fostering an atmosphere of community. It’s difficult to keep or attract new residents when these businesses leave.
So, shopping at local stores isn’t just something you do to avoid buying gas more frequently. It’s an important part of keeping your community together. Even if you might pay a somewhat higher price or face a slightly narrower selection, support of these businesses is very much in your own interest.
Consider this simple example. If you and a large percentage of the people in your community buy all your jewelry in a different city or online, the local jewelry store may not be able to stay in business. That may be fine, you think, if you were able to get a good deal on the jewelry you purchased. What happens, though, if a piece of your jewelry breaks? Now you either have to go out of your way to get it fixed or mail it off. Simply put, local businesses provide services that cannot be replicated.
Even more importantly, local businesses ensure the continued provision of large-scale services in your community such as hospitals and schools. This support of large-scale services goes beyond paying taxes. When commerce dwindles in a community, people leave. When people leave, medical and educational services must be consolidated because they aren’t financially viable on a small scale. These consequences are as evident in many rural areas as they are in big cities like Detroit.
A crucial part of building and maintaining community is local commerce. If you are financially able, don’t let short-term convenience get in the way of your willingness to contribute to your community’s long-term stability.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
This post originally appeared in the Ottawa Herald.
On March 7th, the Gwartney Institute hosted a debate on the Ottawa University campus. I won’t name my opponent, but the two of us debated the following resolution: “Buy Local” is a Bad Idea. My opponent has no problem with shopping at local stores; our disagreement was about the economic soundness of preferring local stores even when they don’t deliver low prices or superior quality.
In the debate, I defended the following idea: It makes good economic sense to support local businesses if we consider the possible risks associated with not buying local. By “local businesses,” I don’t necessarily mean small sole proprietorships located exclusively within a town. From my view, supporting big box stores and franchises in your community is an integral part of a sensible version of “buy local.” After all, the managers, employees, and franchise owners are also part of your local community!
Here’s why: commerce builds community, and community brings security. We don’t have to look far to see communities that have declined economically to the point that they are struggling to maintain basic services. Hospitals are closing, schools are turning into nursing homes, and home values are dropping in areas that once supported thriving communities. Is there something we can do to prevent this decline?
Certainly there are instances in which the economic factors that contribute to the decline of a town or community within a larger city are inevitable. However, this is not always the case. The presence of entertainment and retail businesses in a locality is as important as organized events to fostering an atmosphere of community. It’s difficult to keep or attract new residents when these businesses leave.
So, shopping at local stores isn’t just something you do to avoid buying gas more frequently. It’s an important part of keeping your community together. Even if you might pay a somewhat higher price or face a slightly narrower selection, support of these businesses is very much in your own interest.
Consider this simple example. If you and a large percentage of the people in your community buy all your jewelry in a different city or online, the local jewelry store may not be able to stay in business. That may be fine, you think, if you were able to get a good deal on the jewelry you purchased. What happens, though, if a piece of your jewelry breaks? Now you either have to go out of your way to get it fixed or mail it off. Simply put, local businesses provide services that cannot be replicated.
Even more importantly, local businesses ensure the continued provision of large-scale services in your community such as hospitals and schools. This support of large-scale services goes beyond paying taxes. When commerce dwindles in a community, people leave. When people leave, medical and educational services must be consolidated because they aren’t financially viable on a small scale. These consequences are as evident in many rural areas as they are in big cities like Detroit.
A crucial part of building and maintaining community is local commerce. If you are financially able, don’t let short-term convenience get in the way of your willingness to contribute to your community’s long-term stability.
Dr. Levi A. Russell is the Gwartney Institute Professor of Economic Education and Research at Ottawa University
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