James Leroy Wilson's blog

Monday, August 29, 2005

Self-Interest, Cooperation, and the Common Good

Trade protectionism makes no sense economically or morally. It is both counter-productive and cruel to prevent someone from purchasing something he wants (or needs), by having the government price it beyond affordibility. By saying this, I am not therefore advocating "free trade agreements" like NAFTA, CAFTA, WTO, or FTAA either. Their bag of regulations and special privileges favor corporations, exploit the poor, and undermine national sovereignty. The ideal is unilaterally free and open trade, with corporate welfare for none.

That said, at a certain level the motive behind protectionism makes some sense. Just as each one of us prefers prosperity instead of indebtedness, earning more than we consume, so it is true that we would wish the same for our immediate neighbors and for the larger community in which we live.

This isn't just sentimental attachment - we may not even like our neighbors. But if we individually prosper while our neighbors are jobless, then soon the shops, theaters, and restaurants we enjoy will close, the streets and parks will not be maintained, the hospital will shut down. We will lose services and amenities if the community as a whole can not afford them. In most cases, self-interest suggests that patronizing locally-owned stores and restaurants, and purchasing locally-manufactured products should be the norm. Even if prices for some things are slightly higher. And this would apply no matter where you live. If you live in St. Louis, drink Budweiser brands. But if you move to Milwaukee, switch to Miller.

Supporting the local economy doesn't just mean whatever it takes to create as many jobs as possible, but to ensure that the profits at the top of the economic chain also stay in town - that the owners are local residents. As Scott Richert said in a speech published in Chronicles:

For a city the size of Rockford, a solid economic base requires that income flow in from the outside. In this respect, the frenzy of commercial development on the east side of town over the past 20 years has actually decreased Rockford’s economic viability, not increased it. The lion’s share of every dollar spent at a national chain such as Wal-Mart leaves the local economy, never to return—unless, of course, it returns in the form of another local Wal-Mart Supercenter. Rockford will soon have five, positioned strategically around the city, pumping money out of the local economy and funneling it to Bentonville, Arkansas, and China—any place but here.
The service-economy model that was supposed to replace manufacturing has similar problems—it only increases the economic health of a community if it brings in money from outside. But service-industry execs, like their counterparts in multinational manufacturing concerns, are always looking for ways to decrease costs, and thus it was almost inevitable that such things as call centers—which did bring money into local economies—would be outsourced.

But how does a town bring in income, rather than export it? Richert talks of adopting Frank Capra values, where

“cooperation” and “collaboration” and “combining resources” and “helping each other out” become more than buzzwords: They represent an older morality—a better morality—that disappeared long ago from the boardrooms and corporate offices of all-too-many large manufacturers who are now American in name only.

Such networking is brought about by the Manufacturers Alliance of the Rock River Valley:

So far, over 40 local small manufacturers have come together to form a flexible network. Large manufacturers from outside the area, who are outsourcing more and more of their component production, now have one point of contact in Rockford that can help them find the right small manufacturer—or several small manufacturers—to fill their needs. And manufacturers who are members of MARRV do not need to worry about being unable to fulfill a customer’s request and possibly losing that customer as a result—they can turn to their fellow members as backup.

To achieve a sounder, more productive economy, nothing is more important than monetary, tax, and regulatory reforms. But the MARRV reminds us that self-interest, neighborliness, and community welfare (or the "common good") are not conflicting values, but operate in harmony with each other.

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