As I was delivering a lecture on the topic of “Buying Local” a few weeks ago, I was struck by something I had not thought about for years.
“Progressives” seem to be obsessed with the idea that government is an insurance company. Indeed, they call much of what they favor, “social insurance.” They view the legitimate role of the state to make sure that people are insulated from very bad outcomes. Thus, the call for retirement “security,” minimum incomes, health care, and the like. Believe it or not, I am sympathetic to some of this view, so long as the programs are consistent with the Rule of Law. But let me ask, if you view the proper role of government to be an “insurance agent” especially because we never get to go behind the veil to choose what kind of a world we wish to live in, then ought you not be consistent in applying this view as a legitimate role for government?
To wit, consider the implications of following through on the wishes of those who wish us to live a more “buy local” lifestyle. Imposing “localism” on any reasonable scale is asking us to willingly forego the greatest insurance policy ever “devised” – the system of global commerce.
How many folks even realize that wheat and grain prices doubled and tripled between 2006 and 2008? If they did, they may have noticed a pathetically apologetic sign at their bagel shop (like I saw in mine) apologizing with something like, “Sorry that our bagel prices have increased by a quarter, our flour costs have risen dramatically in the last 6 months.” But no one starved here, and our lifestyles were barely altered. A similar trebling of prices in a poorer country would mean utter devastation, just as the many times in history this happened. If you ask folks to live as locavores, then any blight, hail storm, pest invasion, heat wave, drought, fire, mold, etc. will utterly destroy entire towns. It is the very nature of global commerce, with a vast, inexpensive and strong communications and transportation sector, that insulates us from major shocks like this. If we endure a tripling of wheat prices today because of a blight in America, Russian wheat will soon find its way here. Indeed, speculators will ensure that it finds its way here even faster than normal and will spur additional output. Even if the new wheat were not forthcoming, a tripling of wheat prices would impose no real hardship in our world when less than 10% of the typical family’s budget is taken up by food expenditures (see the consumer expenditure survey), and only a small percentage of that consists of wheat products. That achievement (food taking up so little of our budget) is very definitely attributable to the massive global division of labor and attendant exchange that comes along with is.
Thus, pushing us closer to a buy local lifestyle will tremendously increase the risk we are exposed to, and no doubt that this risk is greatest for the lowest income families among us. Does this not sound like exactly the opposite of the reason we have social security, unemployment insurance and the like?
Indeed, you cannot logically hold both views. Either you are a fan of “buying local” AND do not see a need for government to promote social insurance OR you are not a fan of “buying local” AND you support government safety net programs. In fact, if you believe that governments ought to increase the amount of insurance its people have access to, then you would get much more bang for the buck by demanding an immediate elimination of all tariffs and import restraints, and by demanding an immediate opening of trade relationships with anyone who wishes to peacefully engage us. However, I am willing to bet a nice dinner out, that it is rare to find anyone who holds the views that consistency demands.