The Small-Mart Revolution Hits D.C.

The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition
By Michael H. Shuman -- Appearance at the Washington book store institution Politics & Prose.

Appearing in the first of a 30 city book tour that will feature events organized by local businesses, author Michael Shuman argues in a new book that despite the endless media coverage of multinational conglomerates, local businesses give more to charity, adapt more easily to rising labor and environmental standards, and produce more wealth for a community. They also spend more locally, thereby increasing community income and creating wealth and jobs.

A 2002 study by the consultancy Civic Economics in Austin, TX found that every $100 in consumer spending at a local merchant vs. a chain retailer yielded three times the local economic impact for three reasons:

1. Local merchants spent a much larger portion of revenue on local labor;
2. Local merchants kept their modest profits in the local economy, bought services locally, and created stability by not moving;
3. Local merchants provided strong support for local producers, created a greater local economic impact/multiplier effect, attracted innovation, and even tourists – who saw something besides chains from the mall at home.

Michael said a strong local economy results in higher social well-being and political participation. By contrast, he pointed to the sheer lack of investment occurring in local economies by state pension funds and individuals, as opposed to the $100s of millions of subsidies doled out to large businesses.

On the positive side, the high price of oil was held as a boon to local businesses, which can compete more effectively with products from China, for example, as a result of higher transportation costs, while also serving as an incentive for more walkable, “Smart Growth,” communities.

Pointedly, Michael said that a localized, small business led economy was not anti-globalization. He cited the example of Tru-Value hardware stores as a demonstration of a network of producers succeeding in generating economies of scale while being rooted locally. He is currently working with a local chamber of commerce to sell through eBay and take advantage of large markets, rather than try and do away with them.

Michael claimed a position in between left and right. Criticism of Maine subsidizing non-local banking and manufacturing businesses by 40% was cited as an example of economic sense, rather than politics.

Michael touted the virtues of local business networks rooted in communities, including a four year old umbrella of such networks called the Business Alliance for Local Living Economies (BALLE). Four years ago I participated in the first BALLE conference with Michael and some 35 others after co-founding and chairing an affiliate in New York City. Today, BALLE has grown to 60 affiliates representing 10,000 businesses.

If Michael had one recurring theme, it was the challenge of the inevitability of local economic decline, or death by chains. As the floods of Hurricane Katrina resulted in the declared obituary of New Orleans as a viable community and the subsequent fight to keep the Crescent City’s mojo intact, so goes the effort to keep the essence of local history, culture, family and sense of place that attracts.