Buying Local, Redux

Today I had a conversation with some Cookeville business owners about supporting local businesses, as opposed to shopping at chains. This notion is particularly applicable in the realm of retail and restaurants. Cookeville has a “Restaurant Row,” with all sorts of national chain restaurants: Olive Garden, Chili’s, Ruby Tuesday’s, Chick-Fil-A, etc. Here is my question: Why is eating at a locally owned restaurant better for the local economy than eating at a chain? The answer I received today is that the profits stay in Cookeville/Putnam County, to be spent here in the future (thus increasing our tax revenue), rather than going off to corporate headquarters in New York City or someplace far away.

I have several responses: 1) How true is the claim that profits of chains go solely or even primarily to the company itself? My brother owns a Smoothie King franchise, and I know he has to pay the corporate office some percentage, but he keeps the majority of the profits (isn’t that right, Sean?). So how is shopping at Sam’s Smoothies, as opposed to a national chain like Smoothie King, more conducive to keeping profits in a particular locale?

2) What about all the employees of these national restaurants/retail chains? Do they not live in Cookeville, and thus we are enriching the lives of these citizens, as well as enabling them to make money that they might possibly keep here in Cookeville (and increase the tax revenue here)? Even if they spend all their money online with national chains, are they not enriched by virtue of my shopping with their company? Is that not a good thing? If we all decided not to boycott Olive Garden because it wasn’t “local,” and they closed up shop and left, wouldn’t a lot of people lose their jobs, so they wouldn’t have as much money to spend – not to mention we would lose a large attraction to our city?

3) Following #2, it seems like there is an element of arrogance and entitlement beneath the surface whenever this question of buying local arises. As if employees of a national chain are somehow less important than a small local business owner and his employees; as if Cookeville employees are worth more, or are more valuable, than Mexican employees who are willing to do the same work for a whole lot less (obviously the Cookeville employees’ labor was not as highly valued, else the company wouldn’t be leaving!); as if the people who work at a local book store (of which we really have none here in Cookeville) are more worthy of earning my money than the employees of!

4) What it boils down to, it seems to me, is that some owners of businesses don’t like competition. They don’t like people offering the same product (or better) at a lower price. They don’t like the name recognition or efficiencies that large chains have. They don’t like globalization. But all these things are VERY good for consumers. And ultimately, in the long run, they are good for the small business owner who might have to go out of business because of the large chain. This is harder to see, because what is seen is the pain of going out of business – but if their comparative advantage is not to be found in retail/restauranting, then it must be found somewhere else. And it’s better to find that out sooner rather than later, so that you can find where it is you can best glorify God and provide for your family (and we won’t even talk about the impropriety and foolishness of the government propping up companies that have proved not to have a comparative advantage doing whatever they were trying to do, i.e, General Motors, AIG, etc.).

If you want to buy local, more power to you. But making it out to be immoral or foolish to shop at a national chain, or online, or at a company owned by someone who lives outside of your town, seems to be wrongheaded at the least.

For more on this topic, see here and here.

The Farmer


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