A New Deal for Local Economies

Let me begin by sharing some good news. Scattered here and there, in my country and in yours, the seeds of a new, more local, and more durable economy are taking root.

The Power of Local

Locally grown food has soared in popularity. There are now 5,274 active farmers markets in the United States. Remarkably, almost one of every two of these markets was started within the last decade. Food co-ops and neighborhood greengrocers are likewise on the rise.

Some 400 new independent bookstores have opened in the last four years. Neighborhood hardware stores are making a comeback in some cities. Most students graduating from pharmacy school report that they would rather open their own drugstore than work for chain. Last April, even as Virgin Megastores prepared to shutter its last U.S. record emporium, more than a thousand independent music stores were mobbed for the second annual Record Store Day, a celebration of independent record stores that drew hundreds of thousands of people into local stores, became one of the top search terms on Google, and triggered a 16-point upswing in album sales.

Driving is down in U.S. over the last two years, while data from a dozen metropolitan regions show that houses located within walking distance of local businesses have held value better than those isolated in the suburbs, where the nearest gallon of milk is a five-mile drive to a superstore.

In city after city, independent businesses are organizing and building an increasingly powerful counterweight to the big business lobby on issues as varied as tax policy and global warming. Local business alliances have now formed in over 130 cities and collectively count some 30,000 businesses as members. These alliances are calling on people to choose independent businesses and locally produced goods more often, making a compelling case that doing so is critical to rebuilding middle-class prosperity, averting environmental catastrophe, and ensuring that our daily lives are not smothered by corporate uniformity.

And there is growing evidence that these initiatives are succeeding. During the 2009's slow holiday season, a nationwide survey by the Institute for Local Self-Reliance found that independent businesses actually outperformed chain competitors. What accounted for this relative good fortune? Many of those surveyed said that more people are deliberately seeking out locally owned businesses.

But here's what is perhaps the strongest--and, undoubtedly, the most bizarre--evidence to date that people's priorities are changing: Many massive, globe-spanning corporations are now trying to figure out how they can be "local" too.

Hellmann's, the mayonnaise brand owned by the processed-food giant Unilever, is test-driving a new "Eat Real, Eat Local" marketing campaign. Frito-Lay is using farmers to pitch its potato chips as local food. Barnes & Noble, the world's top seller of books, has launched a new campaign under the tagline, "All bookselling is local." Winn-Dixie, one of the largest supermarket chains in the U.S., has a new slogan: "Local flavor since 1956." The International Council of Shopping Centers, a global consortium of mall developers, is pouring millions of dollars into television ads urging people to "Shop Local"--at their nearest mall.

Most astounding of all, Starbucks, a company that has spent untold millions developing one of the most recognizable brands on the planet, is now beginning to un-brand some of its outlets. The first of these reopened as "15th Avenue Coffee and Tea" in Seattle. Unless you read the fine print on the menu, you would quite easily assume it was an independent coffee house.

Corporations desperately want to turn the local economy movement into nothing more than a cheap marketing trick they can appropriate for their own ends. These attempts at imitation are unnerving. But in the end I think this new variation on corporate green-washing--let's call it local-washing--will backfire. In the meantime, I'm heartened by what it says about the current consciousness. After all, these companies spend enormous sums on market research--they would not be doing this unless they had detected a sizeable shift in public attitudes.

Changing the Rules

While signs abound that people are rediscovering the benefits of an economy rooted in community and small-scale enterprise, all of this activity, though widespread, is still quite modest. It exists largely on the margins and is unlikely to coalesce into a wholesale reorganization of our economy unless we change the rules.

About ten years ago, the Institute for Local Self-Reliance launched the New Rules Project to develop and advocate for policies that would democratize ownership, refashion the economy for long-term sustainability, and nurture strong, self-conscious, and self-governing communities. To get the economy we want, I believe that three areas of policy reform are especially critical.

Click to read more:

Breaking the Curse of Bigness

Resilience depends on diversity, but banks and businesses just keep getting bigger. We need regulations that create real competition.

Planning for Local Economies

Our city planning policies promote megastores and urban sprawl rather then healthy, local economies. We can reshape those policies to support neighborhood businesses that slow the pace of life and encourage people to get to know each other.

Reconnecting Capital with Community

Our investments tend to fund consolidation and speculation. But new models are emerging that allow us to finance the economy we really want.