The Tangled Web


Photo Tim McCormack, Wikimedia Commons

Local economy proponents everywhere dream of much the same vision. A thriving, diverse, walkable city center, surrounded by a patchwork of family farms and cooperative industrial enterprises. A rural small town whose main street is restored to its former glory, full of locally-owned shops selling all the necessary wares. In many ways, it is a utopian vision that has already come to pass – and faded away. Or rather, was stripped away by the forces of industrialization followed by globalization, but above all, consolidation of capital into fewer and fewer hands. The forces are still in play that are responsible for ghost-town main streets, desolate inner cities, and the colonization of those places by multinational-corporate chain stores. These forces are largely products of our institutional and political power structures, not strictly economic. But nothing is strictly economic without being political. Any local economy movement that fails to recognize this fact is missing its opportunity to effect meaningful change.

Of course, passionate local business advocates can bring about changes in their town economies just by creating awareness of the advantages of shopping local. But, the success of such a movement depends entirely on the continued dedication of their residents to the cause, because the changes made are not structural. Where a local economy movement emerges, it is often sustained simply by the choice of individuals to prioritize local businesses. Personal feelings about a cause are a fickle thing, as demonstrated by the many movements which have risen and petered out over the decades without making lasting change to the way most people live. Changing minds is only the first, small step toward changing the system.

The way to make local economy movements stick is to assume they will lose feeling and momentum as movements do, and make preparations for that time. This is to say, the most important thing to do while the movement is strong is to build institutional structures that will keep it a resilient part of community culture even after the slogans and bumper stickers have lost their shine. This may mean changing town code to give residents a voice in what businesses move in, or creating a commons management system for a key resource, be it housing, agricultural land, or the Internet. Note that most of these changes can be started by interested citizens organizing themselves, without recourse to state or national government structures. Nevertheless, they are forms of governance.

Social scientists Elinor and Vincent Ostrom, whose work I am currently reading, had a unique vision of government embedded within economy – perhaps because they did not start from the discipline of economics, nor of political science per se. Their work developed from bottom of the system, studying how natural resources on the local level are managed. Accordingly, they saw the superstructure of government (particularly The Government, nationally) as dependent (and contingent) on the myriad structures beneath it. Having seen the economic system from its underbelly with the perceptive eyes of social scientists, they were able to point out the flaws in the field of economics that result from economists taking the ostensibly detached, overhead viewpoint of the state. (As economists do by default, if only because the discipline itself grew from the efforts of rulers to maximize their tax bases.)

It makes sense for citizens not to rely too heavily on the viewpoint of the coercive state in matters of economics for the same reason as it makes sense for states to limit the voice of the military in diplomacy. Governments govern. Militaries make war. Any organization could reasonably be expected to hold a bias in its decision-making toward the course of action it is best equipped to take, even if that course of action might not be best when considered from a holistic stance, outside the existing institutional framework. An economist viewing their subject from the point of view of the state is apt to assume that the apparatus of the state is the proper tool to make change in the economy.

But, rather than view government as a force that intervenes in economies, the Ostroms frame government in economic terms. As stated in a paper co-authored by Vincent Ostrom and colleagues, “We view the business of governments as providing public goods and services.”* The paper goes on to explain the market factors that make a good fall into the public or private realm. The business of government is as much an economic force as business itself. Arguably, the complexity of economies brought about the need for governance in the first place, so as we think about how to change our economy, we would do well the think outside the already-established boxes around how the business of government can be conducted.

We cannot confront excessive corporate power without changing the political structures that give corporations and their executives vast power in our electoral politics. We cannot change the way people shop without addressing income inequality and how to provide a living wage for all. We cannot address what a living wage means without interrogating how we value and own land, and by extension housing. The list goes on. All of these issues are economics entangled in politics. Radical change in our economies may well only come about when we see radical change in our systems of governance as part and parcel of the movement.


*Ostrom, Vincent, Charles M. Tiebout, and Robert Warren. “Organization of Government in Metropolitan Areas: A Theoretical Inquiry” in Elinor Ostrom and the Bloomington School of Political Economy: Volume 1, Polycentricity in Public Administration and Political Science, edited by Daniel H. Cole and Michael McGinnis, 68. Lanham: Lexington Books, 2015.


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