HOME > INFORMATION > ECONOMY

The generally accepted foundation of sustainability is the trilogy of ecology, economy, and society. The economic part of the equation rests on devising an economic system that creates no more waste than can be absorbed by natural systems and removes no more than can be easily replenished. The relocalizing of an economy involves focusing on ways to buy locally, create locally, and develop a measure of local independance that buffers the local economy from national and international business cycles and trends.

Economic self-sufficiency is an admirable goal and an intelligent municipal strategy when factoring in the cost and availablity of enternal energy inputs and the volatility of financial and commodity markets.

I do not suggest that complete economic independance is the goal here nor is this even likely or desirable in most cases. Most local communities have a range of existing and potential assets that can be optimized and which can be supplemented through cooperative ventures with neighboring communities.

The key is arguably to determine local needs, assess local assets, and develop a gap analysis that determines how best to fill the gap. For example, if it is determined that a local need is local food, but that the community does not have sufficient arable land to grow local food, than a gap has been identified. If a neighboring community has agricultural surplusses, and your community, due to its urban predominance has services, skills, and trades (a gap in the agricultural town), then these gaps might be closed by exchange of these two commodities.

The development of resilient local economies rests on relationships between local merchants and customers.

Resist the use of the term consumers as while we all consume, consuming does not define us, unlike the dominant culture would otherwise suggest.

Merchants need to assess what local residents need (and to a lesser degree want) while consumers need to establish a relationship with local merchants by making them the first choice. The Local First program was initiated by BALLE (Business Alliance for Local Living Economies) and it is designed to inform and educate the local citizenry about the economic and social advantages that independent and local businesses bring to a community. BALLE argues that local independent businesses:

• recycle more money back into the local economy
  
  
• give greater support to a community's nonprofit and civic needs
  
  
• are better positioned to respond to the specific needs of the community, and
  
  
• are more tied to the community's future
  

They also argue that cities and towns with vibrant independent businesses retain their unique character as a great place to live and visit. I would add that such communities have far more active business leaders with a stake in the future of the community. This provides an opportunity to organize and develop organizational resources such as merchants associations and a local economic development presence in local government that links together the needs of the local businesses and the other facets of sustainable community planning. Once aspect of this might include the development of a local economic development policy, a subset of a larger sustainability master plan, that encourages the type and scale of economic activity that the community envisions.

Michael H. Shuman, in his book, Going Local: Creating Self-Reliant Communities in a Global Age, suggests a model for creating self-sufficient communities that includes three facets:

1. Import Substitution—Increase the share of the local economy based on local production for local use;
   
   
2. Community Corporations—Replace corporate absentee ownership with local ownership and community control of investment; and
   
   
3. Power, Not Pork—Demand general revenue sharing from the federal government, not more dependence-creating federal grants programs.

Import substitution (IS), according to the Planning program at the University of North Carolina-Chapel Hill, is "the replacement of goods and services purchased outside a region with goods and services produced within the region.  In this sense, import substitution creates 'growth from within,' as local businesses receive supply contracts and local residents earn wages and income." These acts strengthen the local economy by shifting ties from outside markets to local ones. Initially this will be nominal and have little discernable impact on economic indicators. As the program matures and more merchants join "Local First" campaigns and more citizens participate by targeting local stores, the phenomena begins to become a force. See this site for more good basic information on import substitution (note that classical economics studies IS from a globalization framework and not associated with local municipal nanoeconomies).

To Shuman, community corporations are entities who's ownership and control is institutionally linked to local citizens. These could include public enterprises, worker and consumer cooperatives, credit unions, and community-based non-profits. He also recommends the for-profit corporation with a residential restriction on stock ownership where voting shares are restricted to local residents and where no one individual interest can own more than a minor percentage of the shares and controlling votes. This limits the capital mobility that has devastated so many communities in recent decades.

Core to successful economic relocalization is organization and planning. The establishment of both private and public entities that drive the effort is significant. While these can vary according to local need, the general recommendation is to develop a local merchants association that can work on common goals and needs such as marketing, management, security, liaison activities, and grants writing. The public entity should be the primary liaison between local governing body and merchants and other businesses. They should work closely with the business community and citizens to develop a viable economic development policy that lays out the goals, objectives, and actions that will establish a sustainable local economy.

HOME | INFORMATION | RESOURCES | ABOUT | CONTACT