Thursday, July 15th, 2010
Autarky, not to be confused with autocracy, refers to a policy of economic self-sufficiency. Generally, this is considered a bad idea. Instead, nations and people benefit when they specialize in areas where they have comparative advantage and engage in trade with others to satisfy the rest of their needs.
While some have described the policies of China and others as autarkic mercantilism, generally autarky is out of favor in macroeconomics except for certain matters such as those related to national security, like defense technology or minimum food security.
But at the “meso-economic” level, autarky is making a comeback bigtime. This is the form of the increasing preference for “local” products. This is richly illustrated in a recent New York Times piece in which we hear about people coming to blows over, of all things, a pig from Iowa:
For Mr. Bechard, it came down to this: never should a pig from Kansas or Iowa have even been entered in the contest; it only made it worse that the Iowa pig won. After all, there are Red Wattle heritage pigs raised right here in Oregon. The chefs who competed work in Oregon, and most promote locally produced food.
“I get there and I get the flier and I’m immediately sickened because I’m seeing ‘local,’ ‘sustainable,’ ‘local farms,’ ‘local chefs,’ ‘local wine,’ ” Mr. Bechard recalled, “and then two of the pigs are from Kansas and Iowa? I’m looking at my friend and he said, ‘Eric, just let it go.’ ”
Many hours and drinks and insults later, witnesses told police Mr. Bechard was the aggressor when he encountered Brady Lowe, the event’s Atlanta-based organizer, outside a bar. Words were hurled and fists flew. The police came, firing Tasers and pepper spray.
This isn’t just Portland. For example, last year America’s first USDA certified organic bakery, the Bleeding Heart Bakery in Chicago, was kicked out of that city’s super-elite Green City Market for not being sustainable enough:
In short, if you want to set up a stand at Green City in the next few years and sell blueberry muffins, it doesn’t matter if those berries are organic or not. You’re better off worrying about the carbon-emitting trucks carting those berries in from California or Mexico should you choose to cook out of season. But with the Midwest’s limited growing season, is it realistic to expect bakers and chefs to stick solely to what they can procure within a 100-mile radius and, even beyond that, to what proves to be certified sustainable?
To some extent, this represents little more than the next iteration in the cycle of pretentiousness. It’s a very old story. As Jean Renoir so aptly summed it up:
Each of these cliques has its customs, its mores, indeed its own language. To put it simply, each has its rules, and these rules determine the game. And the smaller the clique, the harsher and more complex the rules. That’s why groups of wealthy people, tennis players, horse lovers, and, more simply, the people of a social set, live by a code that is all the more severe since these groups stand apart from a nation’s overall population.
It’s fine line between sustainability and farce.
But if you look at this more closely, there’s a real embedded notion that autarky is actually an important way to live and for cities to function. A growing number of people believe that we really should do everything we can to consume as much as possible that is produced locally to use.
As with most things we all defend and promote, this is touted both for its moral correctness (sustainability) and its utilitarianism (talent attraction, economic development, etc). Putting aside the moral questions for a moment, is trying to source as much as possible locally, whether that means buying products grown or manufactured locally, or from locally owned establishments, really a good idea practically?
Jane Jacobs might have us believe so. She talked about how cities generate new export industries by adding new work to old. (Of course, how can you have exports if you never import anything?) But more importantly, she talked about how certain businesses could only locate in major cities because of the ecosystem of suppliers that were there. This might be less important in the internet age, but having the suppliers you need in your business at hand is helpful. It’s sort of like the venture capital rule of thumb of not investing more than a 20 minute drive from the office. For example, if you are a designer, having something like a Tech Shop comes in handy. My friend in suburban Chicago is restoring an old house in a manner that’s totally date compliant. He is able to do this by tapping into the network of craftsmen that exist in Chicago.
These types of businesses are only there if there’s a local market. So buy local can be good in some regard if it creates this type of ecosystem that entrepreneurs are able to combine or leverage into new sources of value. Local artists and such can also provide a local cultural scene that enhances life in the city.
But there’s another side to the story. In her seminal work Regional Advantage, AnnaLee Saxenian described how Silicon Valley gained ascendance over Boston’s Route 128 corridor, despite starting out with many disadvantages. Principal among the reasons for this was the high degree of autarky in Boston firms. They were vertically integrated, and they believed in doing everything in house. Conversely, Silicon Valley was famous for smaller, specialized firms that were related via dense, overlapping knowledge and value networks.
Would a city want to consciously choose to proceed down the Boston path? Now Boston is still the #2 tech hub in America, so it didn’t die off or anything. But given the ever more complex, globalized, and networked global economy, I’m not sure that a city seeking to disconnect itself from various trade networks is actually a good idea.
If you look at the cities that have traditions of retaining unique local cultures, products, and traditions over the long term, places like New Orleans, Pittsburgh, and Cincinnati come to mind. But these places have not been economic dynamos. In fact, for a long time they were very sleepy, and still to some extent are known for insularity. For a newcomer, no matter how long you are there, you are never really going to fit into certain parts of the social sphere. In effect, the price of this strong tradition of localism was calcified local networks and ways of doing business. That’s not to say it’s not worth it. These are among the best cities in America to visit, and for many, to live, precisely because they have not succumbed to the lure of generica. But it deadens civic dynamism.
Think about it. There’s a reason why “provincialism” is generally considered a negative word.
Perhaps for cities like Portland, with so many newcomers and so many connections to the broader world, this is less of a risk – at least for now. It is something worth watching though. As the article above goes to show, people are already enforcing new orthodoxies, and I think it would even be fair to characterize Portland as somewhat of a self-selected monoculture that might one day calcify.
But for other cities there’s more danger. The real problem in a lot of Heartland cities isn’t too few local products, it’s too few global connections and too little global perspective. For these places, the real imperative is to establish more networks, for more new ideas, new ways of doing things, and new people to make their way in. These cities need more imports, not less. They’d be better served to demand excellence no matter where it comes from than to insist on buying local regardless of whether or it is any good.
That’s not to say cities should ignore the local trend. I think there’s a lot to be said for having an ecosystem as noted. It’s about balance. A simplistic “buy local” notion comes with downsides all its own. Autarky is not the answer.