Local Economies

I read an article about Walmart today that kind of surprised me. I have been in the anit-Walmart camp for quite a few years, but I have not been so rabid that I don't shop there. I have a brother who won't shop there if it kills him. Anyway, Walmart is a big corporation focused on it's profits and whatever effects it has on the individual, it generally doesn't care about. It really isn't all that different any other major corporation. The difference is, when it puts its stores in small towns, it decimates their economies, and puts lots of people out of work. It gives people a dead end existence, and leaves no capacity for the local economy to support itself. The small towns then are completely dependent upon large employers, most often multinational corporations such as Walmart and it's most major suppliers.

Some might say, "So, what is that problem with that? It is just capitalism at work." Well, the problem is that it ties these small economies to the downs of the global economy. Due to the nature of multinational corporations, the end production workers and the towns they live in do not benefit from the ups of the global economy, but they are the first to feel the effects of the downs. In the past, if one local economy was badly affected by some economic or environmental event or condition, the effect was limited in its scope. A local economy that was well run and whose participants were wise and careful could almost always ride the ups and downs of larger economic cycles, with the exception of extreme events of nature.

Now, all of our economies are tied to each other to such an extent, that it is almost impossible to run a local economy well enough to be not hammered when the global economy turns bad. It doesn't matter how well the local businesses are run, and how good the decisions made by the local participants are, the bad decisions made by individuals and groups in other locations ultimately lead to the natural consequences of bad decisions and drag the whole economy down, including those of well run localities. Talk about killing incentive for making good business decisions. Take your quick profit now and run. It encourages us all to be unethical and immoral.

Enter Walmart. Well, I guess I should say, Re-enter Walmart. They have this program that is encouraging local production of certain types of produce. Not that produce and food is the core of a local economy, but it has always been a vital component. Now Walmart has learned they can get better goods going to the local economy for things. Not everything mind you, but as much as makes business sense. I realize this is a fragile step in the right direction, and could easily be undone, but encouraging nonetheless.

Ok, here is the thing and a piece of advice to Walmart. Take this approach further. Take a little time to develop the means for a small community to produce a much larger percentage of what they consume. I am not just talking food. This could mean textiles, toys, electronics, tools, personal products. Once you figure out the basic components for local production of each class of goods, don't just push your way into all the towns, co-venture. Take a page from the Leavitt Group of insurance companies. They have tons of insurance agencies, each one operated locally, with policies and support from the parent company, but with a significant, albeit minority, ownership stake by the local operators. Just think Walmart, you could be the primary owners of the majority of production companies in the whole world. The local economies would be much more resilient against outside economic conditions. And, to say the least, your profit would come out smelling like roses, year in and year out. Pretty hard to beat that.