Should we spend our money locally? keep it "in the community"? to create local jobs? "stimulate" the economy?

[Lumpenproletariat]

I do my best to buy as local as possible for many reasons, but yes, because when I buy locally, the money stays in my community rather than gets shipped off to some entity somewhere else.

This is delusional. It is a delusion to believe that "the money" staying in the community makes the society or community better off. It's only the work done to produce wealth which makes the society better, not what is done with the money circulating, or where it is spent.

I don't see it as very different to actively look for minority owned businesses.

That too is delusional. Only a fool thinks he can rank businesses according to the identity of their owners, according to their race or religion or astrological sign and other phony criteria. The only legitimate criterion is the quality of the service/product and the price. Consumers should not be intimidated into feeling guilty for choosing what's in their individual interest, to satisfy their need for a product or service. To buy a product out of pity for the seller, rather than your need for it, is phony and pretentious. No one knows which companies or workers we should feel sorry for and buy from out of pity toward them, and which ones we should reject as outsiders or aliens not belonging to our club.

No, the place to spend your money is the place which offers you the best deal. It is phony to pretend that your spending choices are based on what's good for society.

By purchasing from LOCAL businesses, rather than businesses who sell and take their profits elsewhere, it makes a lot of sense to purchase from people within the community and to keep the money within the community.

No, it's a delusion that you make anything better by trying to keep the money from flowing outward, as if the money creates wealth by being restricted from flowing to the wrong place. It makes no difference if money flows to other places, as long as this is due to it being spent by consumers according to their free choices, to meet their individual needs.

Question: what is your opinion on illegal workers sending a significant percentage of their earnings as international remittances?

It makes no difference to the economy whether they spend it entirely in the host country or if they send it all abroad, or anywhere in between. If large sums flow to a certain location, it could cause price increases there, but that in turn generates more production/investment in that location and more flow of production there to take advantage of the higher prices. So a large influx of money into the location pushes demand up and attracts new production to meet the new demand.

That money definitely does not circulate in the local community.

It doesn't matter where the money circulates. All that matters is to ensure that buyers and sellers are free to make their choices, including the producers being free to operate wherever they can find a market, hiring anyone who wants to work at whatever terms agreed to by the producer/employer without interference from outsiders, such as government, and consumers having access to all the production happening anywhere. Letting them all be free to make these choices and move themselves or products to wherever it's profitable is what makes the economy better, and the nation more prosperous, regardless where or how far the money flows.

 

[bigfield]

If you give your custom to a locally-owned business, there's a chance that money might come back to you. You buy from the greengrocer, the greengrocer buys from the local cleaning supplies wholesaler, the wholesaler buys office supplies at your shop.

Basically, by spending money at locally-owned businesses, you might have a better chance of keeping more of that money in the local money supply, which means more people can buy your stuff. And if you don't have a local business yourself, then perhaps you do it for the benefit of other people who do.

It's only the work done to produce wealth which makes the society better, not what is done with the money circulating, or where it is spent.

Say's Law? That's bunk.

 

[Lumpenproletariat]

It's producing the stuff better that improves the economy, not playing tricks with the money flow.

If you give your custom to a locally-owned business, there's a chance that money might come back to you. You buy from the greengrocer, the greengrocer buys from the local cleaning supplies wholesaler, the wholesaler buys office supplies at your shop.

Basically, by spending money at locally-owned businesses, you might have a better chance of keeping more of that money in the local money supply, which means more people can buy your stuff. And if you don't have a local business yourself, then perhaps you do it for the benefit of other people who do.

Let's assume the worst-case scenario: there's a significant amount of money which leaves the local economy, for some oddball reason -- Everyone in town suddenly wants a product available only from Timbuktu, so a chunk of dollars suddenly goes there and never comes back. So the money supply decreases. If that's a significant decrease in money, there will be some deflation there, as prices fall, at least for a period.

There's no reason why this would not be a drop in all the prices, uniformly, including any incomes derived locally. Nothing about this means the economic activity/production has to change, but simply that all the business continues on anyway, as it would have, with all the prices uniformly lower. The money supply remaining would continue doing its job of enabling the trade to continue on as before, with no necessary net damage.

If somehow there is a negative jolt hitting certain individuals, it's offset by a positive jolt to someone else. That's just random, as goes on always anyway, as small gains and losses happen every day, little ups and downs, smoothing out overall.

It's conjecture, but any sudden event could bump the economy this way or that, benefiting one business and harming another, by chance, and maybe something unexpected rewards certain producers and penalizes others. But the money supply is never the cause of something bad or good, only because it increases or decreases. It only means prices would go up or down to offset it, and the same business goes on anyway, as it would have anyway had that sudden event not happened.

It's OK if some players take a hit and others get a small windfall from a change happening. But they offset each other, so there's no reason to believe there's any net bad result (though this doesn't mean a weather disaster, e.g., which destroys the town, but that's nothing to do with the money supply).

These are little bumps this way and that which generally are happening all the time anyway, and a sudden outflow of money -- decrease in the money supply -- is just another such bump a certain way, another disturbance having its effect with all the others.

So it's not true that somehow a decrease in the money circulating locally does net damage to the local economy.

What you could argue is that the product people want from Timbuktu could be produced locally instead, if it's cost-efficient, but all that means is that producers/investors should be free to make those decisions, and those who make the right predictions and invest wisely will be rewarded. So producing the stuff better is always the cause of improvement, not just the money flow for its own sake. Making the money flow this way or that, or making it stay where it is, is never what causes net gain or loss in the economy.

It's only the work done to produce wealth which makes the society better, not what is done with the money circulating, or where it is spent.

Say's Law? That's bunk.

You seem to be saying that it's "bunk" for an increase in the local money supply to not benefit the local economy. Or for a decrease in it not to harm the local economy. That's the bunk. It's the production and distribution of the products/services which benefits the economy, or harms it if bad decisions are made in producing and distributing. The money supply going up or down is not what causes benefit or harm.

 

[fromderinside]

How is where money spent a moral issue? I don't even see it as an economic issue. Where one spends ones money depends on one's immediate situation which I'm pretty sure doesn't qualify as subject to determination of moral behavior. You've pretty much gotten down to twitches and squirts which are only tangently related to hormonal balance which ae only related in the sense of energy conservation.

If money is code for effort related to expenditure of energy then why not put it in those terms? Are the consequences of one's effort subjet to moral interpretation, or are they more aptly related to one's continued existence?