Green Is the Color of Money: Growing a Sustainable Local Business Approach

Today I attended the monthly green business networking lunch organized by Sustainable Local Investment Partners of Spokane. The incredibly dynamic and inspiring speaker was Michelle Long, executive director of Sustainable Connections in Bellingham and also of BALLE (Business Alliance for Local Living Economies), a national "network of networks" for sustainable businesses.
She showed a quote from Wendell Berry; I found a longer version of it at the Unstuffed blog. It's from The Art of the Commonplace: The Agrarian Essays of Wendell Berry (here's an Amazon link but what you SHOULD do is go buy it at Auntie's if you're in Spokane or at your own local independent bookstore to support a truly local business).
"One of the primary results--and one of the primary needs--of industrialism is the separation of people and places and products from their histories. To the extent that we participate in the industrial economy, we do not know the histories of our families or of our habitats or of our meals. This is an economy, and in fact a culture, of the one-night stand....
"In this condition, we have many commodities, but little satisfaction, little sense of the sufficiency of anything. The scarcity of satisfaction makes of our many commodities, in fact, and infinite series of commodities, the new commodities invariably promising greater satisfaction than the older ones. And so we can say that the industrial economy's most-marketed commodity is satisfaction, and this commodity, which is repeatedly promised, bought and paid for is never delivered. On the other hand, people who have much satisfaction do not need many commodities.
"The persistent want of satisfaction is directly and complexly related to the dissociation of ourselves and all our goods from our and their histories. If things do not last, are not made to last, they can have no histories, and we who use these things can have no memories. We buy new stuff on the promise of satisfaction because we have forgot the promised satisfaction for which we bought our old stuff...
"The problem of our dissatisfaction with all the things that we use is not correctable within the terms of the economy that produces those things. At present, it is virtually impossible for us to know the economic history or the ecological cost of the products we buy; the origins of the products are typically too distant and too scattered and the processes of trade, manufacture, transportation, and marketing too complicated. There are, moreover, too many good reasons for the industrial suppliers of these products not to want their histories to be known...
"If the industrial economy is not correctable within its own terms, then obviously what is required for correction is a countervailing economic idea..."
What was so exciting about Michelle's presentation: They have demonstrated in Bellingham that encouraging businesses to connect with other local businesses genuinely grows the local economy. 
After having a much higher unemployment rate than the rest of the state, they have had a lower unemployment rate over the past five years. They were recently certified by the EPA as being #1 in the nation--in the nation--for green power. They're working with local government to change permitting processes so a green building isn't a problem that goes to the bottom of the stack to be processed.
National numbers are quite clear: There's more job creation in small businesses than in the giants. In Bellingham they appear to be learning to think first about whether there is a local source for something they're used to importing, whether it's food or anything else.
This idea isn't the least bit anti-business--it's pro-good-business-we-can-live-with-over-the-long-haul.
Here's another take on our economy (and how the financial system is not the same thing as the economy), from someone far more knowledgeable on finance than I--Leslie White, a Wall Street veteran:
"Let's get to the task of facilitating the efficient exchange of goods and services, which, in the process, employs people in productive capacities so they can then afford to buy what they need. It sounds simple, and it is simple.... Every one of us can take a leadership role in some aspect of our local economies. We can buy local food, shop at locally owned stores, enjoy neighborhoods and communities, and engage in financial transactions at the local level."
Nearly 80 people at the lunch thought Spokane is ready for this kind of approach (with a few who aren't sure we'll tackle it). I hope we do.

6 comments :

  1. Barb - Found your blog through Year of Plenty & love it - we have set next to each other in silence at many back-to-school nights, and I never suspected we shared these interests!

    What strikes me as challenging about implementing local economies is one I face on a fairly regular basis: navigating between desire and sticker shock. So I would love to make my food shopping as local as is humanly possible, but I'm literally bowled over by the prices at the Farmer's Market. So we purchase a half or whole beef, which is cheap per pound of hanging weight and then I'm able to not think about the per-pound cost of actual meat, and this year we tried a CSA, paying up front and then bringing home a glorious box of veggies every week. In both instances I'm essentially hiding the costs from myself in the way that the industrial system does for us at the grocery store.

    But how does that work in a local economy outside food production? Especially when what our household earns is pre-set? I can understand the price for, say, a handmade cabinet from local wood, because the maker can say, "Well, the wood cost this, I put this much time in, etc." but it's not as though we can say, "Well, when you add in the amount of time I spend at home and on weekends on this job, my current salary comes out to about $4.50 per hour so you'll need to bump it up and pay me what I'm worth . . . so that I can go buy that locally made stuff I need." Not gonna happen. My solution has been to buy as little as possible, which doesn't seem to be contributive to the economy as a whole, either.

    I guess more succinctly that my question is: where's the "in" to this system? How does it start? I'd love to hear your thoughts.

    p.s. Sorry about the "Anonymous" sign-in; my profile from other sites isn't transferring & I'm not sure why. -Karen

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  2. I actually think you're on the right track: buying less stuff in general in order to focus your dollars on purchases that reflect your values. Where the dollars circulate means a lot.

    Around Christmas several local businesses ran ads in the Inlander with some figures about how much of each dollar spent at a truly local store stays here vs. how much leaves town if you buy at a chain. I believe it was something like 68 cents of every dollar stays here if the store is local, 47 cents if it's a chain.

    If I have my math right (and I'm sure I'll hear if I don't :D) that means that if I spend $2.50 at a local store, $1.70 stays here. If I spend $5 at a chain, $2.35 stays here.

    Spending twice as much, you only benefit the economy an extra $.65. If you were benefiting the local economy at the same rate you're paying out, the benefit would be an extra $1.70 (twice as much staying here for twice as much money spent). That $1.05 leaving town is almost like a hidden tax.

    One of the examples Michelle Long gave was the City of Phoenix. They had a policy of giving their office supply contract to the lowest bidder. That changed it from a local store to a national chain. They "saved" on office supplies--but that local store had full-time, benefited, family-wage jobs, a philanthropic tradition of supporting local causes, relationships with local suppliers of goods and services (think of everything from advertising to back-office accounting systems to legal services that were being paid for in the hometown of Big Box Corporate HQ) and other ways of investing in the local economy.

    When university researchers did a full life-cycle cost analysis they discovered the choice to save on office supplies was costing the city around $500K/year in money that left the local economy and/or didn't circulate there. Some savings.

    barb

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  3. Great post on Year of Plenty blog with the stats and sources on how much more of your money stays and circulates in your local economy when you buy from a truly local business: http://www.yearofplenty.org/2010/11/study-buy-local-73-stays-local-buy-national-chain-43-stays-local.html

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  4. A post on my other blog, Bike Style Spokane, about buying local with some relevant links: http://bikestylespokane.com/2011/11/25/shop-small-shop-local-small-business-saturday/

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  5. Just some thoughts,

    I believe what anonymous was getting at is the overall "affordability" problem:

    * At times, I'm going to refer to "Joe" (an avg, relatively low skilled, service sector employee).

    1) Regardless of the desire to shop locally, many people simply can't "afford" to pay the 20-50% higher costs that are often involved when attempting to do so. In other words, trying to balance a potential desire to shop/support local businesses vs. the stark reality of a generally fixed budget to work with.

    2) Irt the benefits of shopping local to keep more money local:
    One issue is getting people to "believe" there's a difference. Since people's reality tends to be framed by their perception of things, and that perception is framed by their monthly spendable income (which typically doesn't change much), the result is that most people won't perceive much, if any, benefits to the local area from shopping at small stores vs. super sized stores. The reason is that most benefits are more secondary or tertiary, as opposed to directly impacting, so they don't change people's reality or perception in a noticeable way.

    Using the premise "shopping local keeps more money local" means that, theoretically, there'd be more money to spend, and therefore more demand. More demand potentially means business expansion and more jobs right? While that sounds very good, most people, like Joe, aren't going to acquire the benefits it suggests (at least not in the short term where people's reality and perception reside).

    Unfortunately, just because Joe's employer makes more, hires more, and/or expands, that doesn't mean a pay raise is necessarily correlated. In the long run, extra money extra local money should equate to pay raises for skilled workers (due to employer competition as the supply of workers drops). However, those in the less skilled areas, like Joe, are much less likely to see that sort of benefit.

    Also, most employers don't immediately pass along increased profits to their employees (especially early on) due to the unpredictable nature, and often short duration, of profit spikes. Greater local money could certainly lead to "new" businesses and therefore a greater selections of merchandise (like getting a Trader Joe's) but things like that aren't recognized as by most people like Joe.

    Joe is generally only going to feel like he's doing better if his income goes up or expenses go down. One way those expenses can go down is by greater competition caused by new businesses in the area. However, the greatest reduction in costs will generally be seen by shopping at the biggest stores that can buy in bulk and operate at the lower margins. It's hard for most people to turn down saving the 20-50% that can be found at bigger stores (like Costco, Walmart, Winco, Fred Meyer's, etc) vs. the more expensive mom & pop options. The problem, as always, lies in the extra cost to people, especially those on thin budgets, when shopping at smaller stores.

    3) A different view of money being available to spend in the local community goes like this:
    If people are saving 20-50% by shopping at big box stores, they have extra money to spend on other things. For ex: shopping exclusively at a mom & pop convenience store, Joe may spends $400/month on food. By shopping sales at Winco & Walmart type stores Joe could likely buy the same amount of food for $250. This would free up $150 to spend elsewhere in the local economy.

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  6. Thanks for sharing about Green Is the Color of Money: Growing a Sustainable Local Business Approach.......................

    SWT16

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