When author Michael Shuman first started talking about growing local economies back in 1998, not many people were prepared to listen. "I gave an invited talk at the University of Kentucky," he remembers. "Two people showed up and one left early."
Today things are a little bit different. Last year Shuman published his eighth book, "Local Dollars, Local Sense: How to Shift Your Money from Wall Street to Main Street and Achieve Real Prosperity." He is the director of research and economic development for the Business Alliance for Local Living Economies (BALLE), the director of research for Cutting Edge Capital, both of which deal with community-based economics, and a fellow at the Post Carbon Institute. On top of that he travels around the country, giving at least 50 invited talks and presentations about strengthening local economies every year.
Shuman's messages resonate in the world where wealth has consolidated into a few "too big to fail" banks, Wall Street firms, and the top 1 percent of the population. "Local business is critical to generating wealth," he says. More than just the "buy local" movement, Shuman also advocates local investment, local self-reliance, local ownership and local control — all matched with cutting-edge practices that support both labor and the environment.
"My professional work has all been trying to figure out how ordinary people can involve themselves," Shuman says. The first 15 years of his professional life were devoted to getting people involved in municipal policy and citizen diplomacy. "We built a network of several thousand mayors and city council members to get them involved in international affairs."
In the process of this work he became acquainted with several cities that were attempting to create sustainable communities. "They had great criteria and great principles," Shuman says, but he found that they were having trouble putting those ideals into practice. "I realized that what I needed to figure out was a better form of economic development."
That led to his first of three books about local economies, 1998's "Going Local: Creating Self-Reliant Communities in the Global Age." It was followed in 2006 by "The Small Mart Revolution: How Local Businesses Are Beating the Global Competition."
His work over the past 15 years has led him to understand that "buying local" is not just the right thing to do; it is also good business. "I part company with a lot of people who say that local businesses are less efficient or that their goods cost more," Shuman says. "In fact I think that local goods and services are extremely competitive and becoming more so."
In addition to economics, Shuman believes that strong local communities are also greener. "I would argue that you cannot achieve sustainability without stronger local economies, and you cannot achieve strong local economies without sustainability." Here he shares the message with the buy local movement. "Local businesses produce goods locally, but they also tend to sell their goods locally." This not only requires less transportation and less energy; it also helps communities become self-reliant so they do not depend on far-away businesses for all of their goods and services.
Another factor, Shuman says, is that local control creates an incentive to keep things operating in an environmentally safe manner. "I think one of the great drivers of environmental failure is the ability of global companies to move around from jurisdiction to jurisdiction looking for the weakest labor and the lowest environmental standards." He says strong local communities don't need to rely on outside businesses, so they can keep their local labor and environmental standards high. "That is the critical difference between a local economy and a globally dependent economy," he says.
Strong local communities also have a great deal of similarity to the natural world — an economic biodiversity if you will. "Thinking about what makes for successful, prosperous ecosystems leads to insights onto what leads to successful, prosperous economies," he says. "You have the local business level but you also have redundancies and lots of connections and attentiveness between different places and parts of the system." That way a community can survive if a company fails or pulls up its roots, as has happened to so many American factory towns.
Shuman says he is currently focused on spreading the ideas from "Local Dollars, Local Sense" and looking at what he calls the "nitty-gritty of localizing our investments." One of the big points of his book is that the U.S. currently has about $30 trillion in long-term investments such as stocks, mutual funds and insurance funds, but virtually all of it is with Wall Street companies. "Almost none of that goes to local business, even though local business constitute about half of our economy. So if we were to get our capital markets working efficiently, roughly speaking half of that money, $15 trillion, should be moving from Wall Street to Main Street."
He says that transition is much easier following last year's Jumpstart Our Business Startups (JOBS) Act. "It's not going to happen instantly, but the JOBS Act means that one more pathway for local investment is now open and legal. The whole universe is fundamentally changing right now."
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