Inside Langford

Royal Roads University professor, Dr Richard Kool, was the keynote speaker at the Go Local Food Summit on the West Shore this past Saturday, March 6th, addressing the economics of creating an economy based on the “Go Local’ philosophy with his keynote address, “Grow ahead of the curve.” He expanded on the idea of “Going Local” applying to food sources and elaborated on applying it to everywhere you shop, everything you buy, where you bank and how far you, your money and your purchase travels and how.

In his presentation he used the analogy that money moving through a local economy was like blood moving through the human body. Money leaving the local economy was like a wound, bleeding blood out of the human body. He also used the analogy that the money in a local economy was held in a bucket, and leakage from that bucket represented money leaving the local economy.

There were two main philosophies to counteract leakage – fill the bucket faster and/or plug the leaks.

He cited statistics that showed the tax cuts the BC Liberal gvernment made in 2001 did not create the expected economic boom in B.C. – only 35% of the jobs created stayed in BC, many went to Ontario due to BC’s weak infrastructure. So low taxes (or supposedly filling the bucket) do not always stimulate the local economy, because that money might not stay local.

Tanker trucks are a huge source of leakage as they mean goods are shipped into the local economy, not made or stored locally in warehouses, and of the cost of the fuel for the tanker trucks, only $0.15 of every $1.00 stays local, so $0.85 cents of the $1.00 spent leave the local economy.

Major sources of leakage are:
- not using local financing services – banking, accounting etc.
- not using local infrastructure – warehouses, local suppliers
- money spent in nonlocal businesses leaves the local economy – profits go to a company owned and managed elsewhere and distant shareholders whereas money spent at local businesses goes to local business owners, where they supply from and where they shop.

Dr. Kool noted, based on US statistics, that towns/counties surrounding Walmart stores lost on average 2.5% of sales, decreased local employment by 2.7% and reduced retail earnings by 1.3%. Big “super” stores have hidden costs, the artifically low prices mean the loss of local businesses and the mega-stores encourage sprawl by needing large open spaces to locate in, usually away from city cores and are destination shopping points, encouraging car traffic. They also create much higher demands for infrastructure due to size and distance on the local community. He noted “super” stores or big “box” stores are a “Tragedy of the Commons.” While the one shopper may get a lower priced good or food product, everyone in the community suffers for that person making that savings, so for the community there is a net loss, not a gain.

Dr. Richard Kool challenged people to have a “Descent Plan,” acknowledging we can not change everything all at once. The “Descent Plan” could begin with the challenge to, “spend 1% of your money locally.” He summarized with his list of how to “plug leaks”:
- shop at nonchain businesses,
- buy local & grow local,
- use less fossil fuels and buy things that have used less fossil fuels,
- use local banks & credit unions.