Wendell Berry, “The Idea of a Local Economy
Orion Magazine, Winter 2001

The economic theory used to justify the global economy in its "free market" version is again perfectly groundless and sentimental. The idea is that what is good for the corporations will sooner or later - though not of course immediately - be good for everybody.

That sentimentality is based in turn, upon a fantasy: the proposition that the great corporations, in "freely" competing with one another for raw materials, labor, and marketshare, will drive each other indefinitely, not only toward greater "efficiencies" of manufacture, but also toward higher bids for raw materials and labor and lower prices to consumers. As a result, all the world¹s people will be economically secure - in the future. It would be hard to object to such a proposition if only it were true.

But one knows, in the first place, that "efficiency" in manufacture always means reducing labor costs by replacing workers with cheaper workers or with machines.

In the second place, the "law of competition" does not imply that many competitors will compete indefinitely. The law of competition is a simple paradox: Competition destroys competition. The law of competition implies that many competitors, competing on the "free market" will ultimately and inevitably reduce the number of competitors to one. The law of competition, in short, is the law of war.

In the third place, the global economy is based upon cheap long-distance transportation, without which it is not possible to move goods from the point of cheapest origin to the point of highest sale. And cheap long-distance transportation is the basis of the idea that regions and nations should abandon any measure of economic self-sufficiency in order to specialize in production for export of the few commodities or the single commodity that can be most cheaply produced. Whatever may be said for the "efficiency" of such a system, its result (and I assume, its purpose) is to destroy local production capacities, local diversity, and local economic independence.

This idea of a global "free market" economy, despite its obvious moral flaws and its dangerous practical weaknesses, is now the ruling orthodoxy of the age. Its propaganda is subscribed to and distributed by most political leaders, editorial writers, and other "opinion makers." The powers that be, while continuing to budget huge sums for "national defense," have apparently abandoned any idea of national or local self-sufficiency, even in food. They also have given up the idea that a national or local government might justly place restraints upon economic activity in order to protect its land and its people….

SO FAR AS I CAN SEE, the idea of a local economy rests upon only two principles: neighborhood and subsistence. In a viable neighborhood, neighbors ask themselves what they can do or provide for one another, and they find answers that they and their place can afford. This, and nothing else, is the practice of neighborhood. This practice must be, in part, charitable, but it must also be economic, and the economic part must be equitable; there is a significant charity in just prices.