Is local buying favorable for the local economy or not?
Local buying advantages and disadvantages for the local economy
Local buying, many argue is beneficial for the local economy. According to several, it can have significant advantages for the local economy. However, there are also certain flaws of the concept that have been noted. Still, there are certain benefits of the local buying concept that cannot be disregarded. It can be an effective means to churn the local economy. Purchases made locally can be effective at keeping the local economy alive. It can provide several other advantages too. The first major advantage is the rise in local employment.
Purchasing locally increases local business and in turn leads to an increase in local employment. Apart from that it is also argued that local buying helps the money by increasing the velocity of money circulation. Faster money circulation means that the money changes more hands and more people are benefited. It is why the concept had grown very popular during the economic downturn. Thus an increase in the flow of money locally can fill some important gaps and thus help keep the local economy in motion. Several researchers have also highlighted the point that local spending helps the local economy. So, in simpler words if there is an increase in the flow of money at the local level, there can be derived some simple but important benefits from it.
However, this was the positive side of the local buying concept. The concept is not entirely flawless and there are also some weaknesses of this concept. On the one side are its benefits like increased local flow of money and employment, while on the other hand the entire concept appears anti- competitive. First of all when someone says local buying, he means buying the locally made goods. The problem is that locally made goods can be costlier. So, in an effort to increase the local flow of money, one might end up losing more money than he should. This is where the concept of buying local is worse than buying global. Seen from the consumers’ angle it appears buying locally can be bad for their pockets. Any consumer would first watch his pocket and later his local economy. If the economic conditions are bad, the local consumer would try to save more and spend less. Then the concept of local buying does not rhyme very well with the concept of saving.