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Buying Locally may not Benefit the Economy in the Long Run

by Archives January 13, 2009

When it comes to buying goods, the almighty buck is on everyone’s mind. Businesses want to remain competitive and thus lower their prices as much as possible. Meanwhile, people want to save money by spending the very least.
In a market economy, these sellers and buyers, known as supply and demand, determine the price of goods through economic equilibrium. Basically, this is the lowest price at which suppliers are willing to sell and the highest consumers are willing to pay. For supply to satisfy demand, an increase in production is necessary. All of this occurs so we can buy an Element 1080p Upconverting DVD Player for $27 this week instead of for $28 last week at Wal-Mart.
This all has to do with globalization, i.e. the unification of the planet into one functioning society, creating a homogeneous world.
But is that the real definition of globalization? Is it really that bad?
According to William Watson, chairman of the economics department at Mcgill University, not really. For him, globalization is a means for everyone to have the world at his or her fingertips.
“I want to take advantage of the whole world, I want to think globally,” said Watson. “We’re not good at producing many, many things. I’m not going to restrict myself to a local economy. For example, what if I don’t want to constrict myself to a certain wine? What if you like Californian wine?”
Making specialty goods and services from all over the world readily available seems to be an incentive to opt for globalization. So what if, instead of Californian wine, you were interested in designer clothes?
For Marc Jetté, this is the case. He is the owner of “Cul-De-Sac,” a designer clothing shop on St-Laurent Street that promotes Quebec-made products and the recycling of clothes. For him, investing locally is not even a question. “That’s all we [Cul-De-Sac] want, we only want to produce here…

“It’s for the economy. If you buy Quebec-made products, the money stays here,” Jetté said.
For Jetté, the local economy is his most valued customer. “It’s the biggest part of my market.”
For Watson however, this local economy is what levels the playing field. “They have real advantages. They know the market better and they have the sympathy,” Watson said. “The balance will occur.”
For Jetté this balance has already occurred. “On our tags, it’s written if it’s us who made it, if it’s a creation, recycled or if it’s brand new. The brand new clothes we create here are samples and the majority are made here. The manufacturers make models here, but then the rest are made in China,” Jetté said.
And so when trying to remain local, even Cul-De-Sac has to give a little. And if it’s not the clothes on our backs, then it’s the food we eat. Even the most local of Quebec food businesses, Biscuits Leclerc, has also had to go abroad.
In its April 2007 issue, Protégez-Vous, a consumer awareness magazine, created a special “Made in Quebec” segment which aired on TQS’s morning show, Caféine.
On the show, Protégez-Vous writer Danny Raymond explained how Biscuits Leclerc now produces its cookies in the United States. Raymond said Leclerc, like many Quebec factories, wanted to remain competitive and so kept part of its governing and conception boards in Quebec, but produced its goods elsewhere to cut costs.
Biscuits Leclerc couldn’t be reached by press time.
What does this show to up-and-coming local businesses who want to remain local? Hang tough? More like don’t even try. At the heart of the dilemma is big business that wants to maximize profits while small companies want to make enough to live. And in the middle, customers who don’t want to spend.

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