Saturday, February 06, 2010

Buy Local, Waste Resources

One of the implications of doing comedy in Carrboro, NC is that I often hear the call to "buy local". The obvious problem with this is that it limits trade and limits the market, which makes citizens poorer. What is less obvious, is that it is actually worse for the environment:
Let's suppose that people do decide to "buy local" with the goal of saving the world and reducing their carbon footprint. This will increase the demand for locally grown foods, but it will also have an unintended and likely deleterious consequence; it will increase the demand for farm implements and labor.

Since the decision to buy locally is essentially the decision to forsake comparative advantage, every unit of agricultural output will be more resource intensive than it would be under specialization, division of labor, and trade.

In other words, each additional unit of output will require more resources than it would under trade. To take a concrete example, this means that the cultivation of spinach in Memphis will require more fertilizer, more rakes, more tillers, and more hoes than the cultivation of spinach in California.
If property rights are protected, the proper use of resources is calculated in the price. If you purchase based on price, then you are doing what is best for the environment. That said, it is likely that not all property rights are well defined. The cost of the pollution produced in shipping products across the country is not fully paid by producers. However the solution is to tax the pollution, like a gas tax, not stop trade. This may not satisfy the soul of the socially conscious, but that sounds more like a problem with the soul than with the solution.

14 comments:

  1. Quite a claim you've got there, with no evidence. Cost of shipping pollution <= cost of rakes. I'd like to see the numbers.

    Always appreciate a gas tax plug, though.

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  2. I feel like the proof is in the logic. Use of resources and labor is all inside the price. Granted, there may be some pollution not in the price, main air pollution, which is why a gas tax is so helpful.

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  3. The proof is in the logic? Sounds like "I think it sounds right, therefore it must be right" to me.

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  4. By definition, if property rights are well defined, price is marginal cost and marginal cost is the total amount of resources used.

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  5. They aren't well defined -- specifically in regards to pollution. Why aren't you arguing they should be, instead of criticizing people using the power of the free market to enact the change they want to see?

    A Kiwi flown from New Zealand to Britain emits 5 times its own weight in green house gases. I want to see numbers showing how buying local creates more pollution, as you claim.

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  6. I am arguing that they should be. This specific post is just about how locally grown food isn't the solution.

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  7. You're claiming it isn't the solution, but you refuse to provide evidence that it isn't.

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  8. You realize that if property rights were well defined, and the cost of the pollution created by shipping that Kiwi was included in the price of the Kiwi, the price of a shipped Kiwi might rise to above the price of a local Kiwi (or above a consumer's willingness to buy a Kiwi), negating your argument ("buy local, waste resources") entirely?

    The trouble is you and I don't know if that would happen or not, because there's no evidence backing up your argument.

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  9. Why do I keep capitalizing Kiwi?

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  10. I'm simply arguing international trade is useful for food just like it is for any other product. It sounds like what you're arguing is that trading over long distances is never worth the pollution it causes.

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  11. Never said that. I'm arguing that there is no reason to believe that local farming causes more pollution than international farming if there is no evidence to that effect.

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  12. But the benefits of comparative advantage and gains from trade still exist.

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  13. Never said they didn't. I'm beating a dead horse here, friend.

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  14. Don't beat your own dead horse, pay someone overseas to do it.

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You are the reason why I do not write privately. I would love to hear your thoughts, whether you agree or not.