Pro-Market Localism

Localism has developed into many different streams which can be roughly grouped into localists who support capitalism and those who want to overcome it. Pro-market localists suggest that market regulation can create ethical local capitalism. Some build small businesses, while others promote non-profits and cooperatives. Locally-owned businesses are supposed to keep money in the local communities and, since they’re small, treat workers and the environment better.

Pro-market localists say that if the economy is just a collection of use-values, then we can make capitalism better by producing fewer, high-quality goods. Markets are good things and they can be regulated, providing they are operated according to principles of social justice. The answer is to make the economy less efficient.

They also claim the small scale of local business makes it more ethical. Big business separates owners from those who work and consume; bring them together, the localists say, and business will be more personal. In these circumstances, labor exploitation no longer matters: “even autocratic control is no serious problem in a small-scale enterprise which, led by a working proprietor, has almost a family character.” As long as the business is small, “private ownership is natural, fruitful, and just.” Capitalism is fair as long as it’s done correctly. Profit can be made optional by caring about the proper, local size.

This points to a key confusion at the heart of localism: it conflates the size of ownership with the size of production. The two are very different: while larger production needs concentrations of machinery and labor power, larger ownership doesn’t. Confusing facilities with ownership allows localists to echo Adam Smith’s promotion of small, equal capitals. Opposed to a capitalism controlled by monopolies, Smith believed that markets could be self-regulating and competitive if producers and consumers were kept small. Smith had the benefit of describing his own historical period: during the 18th century, small companies battled it out to control local markets. Not today: small business is less important to directing economic activity.

Idealizing small business is simply a form of nostalgia for earlier forms of capitalism, which weren’t necessarily any better. Small, family-owned businesses also pay poor wages, price-gouge customers, and destroy the environment. As of 2010, U.S. small business owners were 83% white, married, older men. That figure shrank only 4% from 2000. This means that the small business culture localists defend is also fairly exclusive.

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Greg Sharzer, No Local: Why Small-Scale Alternatives Won’t Change The World (Winchester, UK: Zero Books, 2012), 20-23, 29.

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