Book review – Local Shops for Local People?

Greg Sharzer’s 2012 book No Local: Why Small Scale Alternatives Won’t Change The World, may not be what advocates of re/localization want to hear. As the Danish proverb says, “To tell the truth is dangerous. To hear it is boring.”

Despite the best efforts of The League of Gentlemen, it’s an article of faith for many green groups (and the ConDem government, using the rubric of localism) that decentralised, small-scale organisations, businesses and networks will solve our environmental, economic and social problems. For example, Schumacher’s Small is Beautiful
and the Transition Network’s REconomy Project. Greg Sharzer questions this belief.

Dismissing ConDem localism as a way of cutting public spending and making the poor pay for services that have previously been provided through general taxation, Sharzer focusses on green  re/localization. He analyses both pro-market varieties of re/localization (such as the ‘shop local’ social enterprise,Totally Locally , Bill McKibben’ Deep Economy, and the Transition Network’s REconomy Project) and anti-market varieties (like LETS and alternative currencies and credit schemes).

Pro-market re/localization assumes that consumer activism or ethical consumption – call it what you will – has the potential to restructure the market. And that consumption of locally produced commodities is inherently more environmentally friendly and better for local residents than consumption of commodities that are produced at a distance.

Anti-market re/localization says that we can trade what we want directly between each other, either through LETS, local currencies or new forms of credit – such as cooperative investment – to support ethical small businesses. It suggests that we can replace big industry and high tech by creating a new, cooperative society based on direct, non-capitalist trade.

Re/localization theories are based on a middle class, individualist economic theory

Sharzer says both pro and anti market varieties of re/localization ignore the social relations of capitalism. Instead, they take as read neoclassical economic theory’s assumptions  about how the market operates.

Neoclassical economic theory is an explanation/justification of the operations of the capitalist marketplace, that avoids any consideration of how value is created as a result of a power imbalance between workers and the owners of capital.This power imbalance allows the owners of capital to pay workers less than the value of what they produce (taking the difference as profit).

Neoclassical economics ignores this and proposes that value (price) is created by the interactions of buyers and sellers in the marketplace, so that price is the outcome of the relationship between demand (buyers) and supply (sellers).

There are various problems and limitations with neoclassical economics. One is that, even if you accept its hidden assumptions and the values that they embody, it only attempts to describe what is called micro-economics – the behaviour of individual buyers and sellers. It doesn’t attempt to explain the operations of a whole economy. A different set of (macro-economic) tools is needed to describe how a whole economic system operates.

Why actions based on neoclassical economic theory can’t deliver the changes re/localizers want

Problems with re-localization’s unspoken reliance on neoclassical economic theory lead Sharzer to conclude that ethical consumerism can’t change the system as it claims, and that bioregionalism – which defines a geographic boundary around a self-sufficient region – is a seriously flawed idea.

First, re/localization overlooks the power relations that structure capitalist economies. Sharzer says that the prospects of small scale alternatives are

“severely limited by the power of capital…If localists had a greater understanding of how capitalism works, they might not be localists.”

So how does capitalism work? Sharzer looks to Marx for a reminder that capitalism is based on the power to exploit. Capitalists own the means of production, workers own nothing but their capacity to work. Capital is a social relation – the ability to capture and use the labour power of others, in order to extract profit from this labour power. This social relation depends on denying ownership of the means of production to workers, so they have no way of earning living except by selling their labour.

Re/localists propose that small local businesses can compete effectively with large corporations, either through limiting the market to a specific geographical area, and the use of tax policies and planning regulations (McKibben),  or through ethical consumption.

Bioregionalism and ethical consumption won’t deliver the goods

Sharzer points out that neither bioregionalism not ethical consumption are likely to be able to deliver the goods. Bioregionalism  is defined by Richard Evanoff, professor of environmental ethics at Aoyama Gakuin University in Japan, as

“an alternative future in which overconsumption is drastically reduced, and the focus is shifted to providing for the human well-being of all on the basis of local forms of energy, agriculture, housing, and manufacturing. In the short term this shift would necessitate giving up jobs that are based on the global economy and access to consumer goods produced overseas… In the long term, the shift would involve stimulating local economies, so that everyone can be usefully employed in the production of food and goods that meet their basic needs, and also provide for greater democratic participation in the political decision-making process.”

Sharzer points out that bioregional economies are not necessarily going to be more eco-friendly than national or global economies. Basing production on numerous small-scale businesses means:

  • economies of scale will not be available
  • there will be duplication of production facilities
  • if every industry has to be re-created locally, it would be impossible to meet the demands of a technologically advanced society.

Loss of economies of scale and duplication of capital goods/facilities mean using more resources to produce the same amount of whatever. This is not very efficient. This matters greatly when a stated aim of bioregionalism is to reduce resource consumption and waste. And Sharzer cites a UK Report which found that “smaller businesses were less likely to safeguard the environment”.

Many green folk promote the idea of decentralised, renewable energy microgeneration. But it seems that to provide reliable, universal access to electricity powered by renewable sources, a large grid is needed to link large-scale renewables over wide geographic areas. This is the conclusion of recent research by the University of Delaware and Delaware Technical Community College.

Ethical consumption doesn’t have the power to shift production to local or green commodities, Sharzer points out. The idea of activist or ethical consumption is based on a misunderstanding of how capitalism operates. By relying on neoclassical economic theory, ethical consumption overlooks the reality that the power of capital means that “production determines what shape consumption takes and creates new needs.”

The theory of ethical consumption doesn’t work because:

  • large areas of the economy are off-limits to workers’ spending power – for example, businesses’ profits, business spending on capital goods and other materials needed for their operation; workers can’t control the circuit of capital spending;
  • consumers who reject mass consumption often get drawn into their own form of elitism, buying expensive green ‘positional goods’ that mark out their identities and salve their consciences, while leaving intact the structures that create inequality and environmental damage and blaming other consumers who don’t share their ethical choices
  • aggregating individual consumption choices can’t recreate a parallel, nicer capitalism because the capitalist economy is too complex for individuals to change at a micro level – Sharzer writes that “even economists can’t create models that account for the supply and demand of goods and services in an advanced capitalist economy”, so how can individual consumers work out and compare the life cycles of commodities they’re considering buying?

According to Sharzer,

“The assumption behind consumer activism is that we’re limited to shopping to express our discontent. This is effectively saying the neoclassical economists are right: the economy runs of [sic] consumer preferences, not exploitation. This shifts blame onto individual consumers for the failings of the system: if there’s alienation and environmental misery, it’s your fault for buying the wrong things.”

Collective solutions

Sharzer proposes that we need collective solutions, providing houses, hospitals and schools for all. And a collectively planned, socialised economy, where the working class (all of us who have no source of income but our labour) organise society to meet our needs.

To those who say that planned economies don’t work, and the market is the only mechanism for allocating resources efficiently, Sharzer points to large corporations which are examples of highly successful economic planning. There’s no reason why we can’t use those economic planning tools for our own ends.

And to those who identify as middle class individualists when their true class position is working class, having no source of income but their own labour – which includes many small business owners, Sharzer writes,

Class needs to be understood as a relation to the mode of production: whether we own capital or work for a living.”

What is local activism good for then?

Despite the fact that re/localization is only going to make at best marginal changes to society, the economy and the state of the environment, Sharzer acknowledges that,

if small-scale alternatives can’t change the world, this doesn’t mean local spaces are irrelevant. When local activism opposes capitalism rather than avoiding it, it creates the potential to build a better world….There’s nothing anti-local about socialism. We can confront global institutions of capitalist power in local spaces.”

Greg Sharzer’s No Local: Why Small-Scale Alternatives Won’t Change The World is published by Zero Books and available from all good bookshops (and some libraries). I bought my copy at The Bookcase in Hebden Bridge. It cost £11.99.

You might also be interested in Everything You Know About Decentralisation Is Wrong


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