Shopping Superstitions

A customer holds an iced drink at a Starbucks coffee shop in Pasadena, Calif., July 25, 2013. (Mario Anzuoni / Reuters)

This holiday season, ignore the “buy small / buy local” nonsense.

Ithis is the most governing time of the year, when Americans are about to open their wallets to buy Christmas presents, illiterate fools lecture on where and how to spend their money. The usual requirements: buy local or buy from small businesses.

This is pure nonsense and you should feel free to ignore it.

People who “buy locally” insist that if you choose, say, your local coffee shop over Starbucks, then the money you spend there will somehow stay in the community, hang around and hang around. provide additional economic benefits. But that’s not the way money works: most companies spend most of what they get and then put the rest in the bank, where it becomes global capital.

And local businesses usually don’t spend their money locally – they can not. I love my local coffee and I’m pretty sure he doesn’t buy his coffee locally, as I don’t live in Colombia, Brazil or Vietnam, and he doesn’t buy his take-out cups from a local manufacturer. , because it is not in the shadow of a stationery, etc. His lease is probably held by an entity outside the city, along with his loans. His espresso machine probably came from Italy or Germany, maybe Hong Kong.

For many businesses, the biggest expense is personnel. These local cafe workers aren’t more likely to spend their income locally than anyone else, as they’ll want things like shoes and meat and Netflix rentals that aren’t made locally – but, as long as they spend that income locally, they are about as likely to do so as a Starbucks employee. By the way, you probably have more Starbucks and Amazon shareholders in your neighborhood than you have independent coffee shop owners or small local stores. Shareholders are also your neighbors.

But even if money worked as the boobs say, money is not wealth – it is a system of record that allows easy exchange and helps us store value. What makes our communities, our country and our species more prosperous is not trying to close money locally through unsolicited counseling campaigns, but the division of labor and specialization, which allows us to produce more with fewer resources. Sometimes it favors big companies, although many big companies are more like a big network of small companies: there aren’t a lot of mom and pop automakers, but General Motors doesn’t make most of the components. that fit into a Corvette – small businesses do. There is room in the market for my local coffee and Starbucks for the same reason that there is room in the market for Burger King and French Laundry.

(I think the world would have been less angry with California Gov. Gavin Newsom if he had dined with lobbyists at Burger King. But with a yuppie punk name like Gavin Newsom – well, do like you, Governor. )

The people of Portland love their coffee. But Portland isn’t somehow at a disadvantage because the Portlanders drink coffee grown in Lam Dong or Harar. Portland has other issues, mainly the fact that it’s crowded to the gills with the kind of people who choose to live in Portland. New York City has many famous steakhouses. There is not a single breeding of cattle. And if you’ve lived near a feedlot, you could be forgiven for suspecting that New Yorkers are getting the most out of this deal. A lot of breeders would disagree – everyone likes what they like.

There is competition in the market, but its main feature is cooperation: through the market, we solve social problems together on a voluntary and collaborative basis. One of the consequences of this is that Texas ranchers care about the prosperity of Manhattan steakhouse customers, and vice versa. The people who want you to believe the opposite are the same who want you to ditch Bordeaux for wine made in Missouri, Oregon, or Illinois – that is, people who shouldn’t be looked at. trust.

The relationship between small and large businesses is complicated. Some small businesses have competitors from large businesses that make life difficult for them. But a large portion of small businesses has their main customer. . . a larger business. This is true for companies from machine shops that manufacture components for complex manufactured products to service providers such as diesel mechanics and landscapers. There are thousands of extremely profitable businesses across the country that you have never heard of because they have nothing on the Walmart shelf with the company name on it. But you use their products every day.

Small businesses rely on big businesses in other ways, too: online marketplaces like Amazon and Etsy help small entrepreneurs connect with customers around the world, and global companies like FedEx provide them with important logistics and shipping services. I was looking for a book out of print some time ago, went to Amazon, found a copy in a local bookstore in India – everywhere is local to somewhere – and, in just a few days, I got my book , a bookseller in India had my money, Jeff Bezos (psl) had taken a cut to make the connection, and everyone was happy. Not quite magical, but as good as.

I love my local cafe and other local businesses in my neighborhood. I hope they do so well that the people who own them all buy Italian cars.