It’s incredibly important to keep trade local – IF you want low standards of living, little access to goods, and widespread poverty!

If, on the other hand, you’re in favor of high living standards, widespread access to goods of all kinds, and general weal, then it’s important to trade as widely as possible.

Let’s apply a reductio ad absurdum to the proposition of “local trade.” If I keep my personal trade as “local” as possible, then I can only:

* eat what I grow (or kill) on my own property
* wear what clothes I make myself
* enjoy the technological goods I am able to craft by hand, myself

It’s one thing to enjoy a peach, fresh off the tree right on my property, like I did this morning. To enjoy fresh or canned homemade peach-orange marmalade or peach conserve requires technology that I can’t easily manufacture here at the house, like cooking vessels, refined sugar, and canning jars and lids. Not to mention the fact that, if my trade is very local, I would be shit outta luck if I wanted to enjoy a fresh peach at any other time of year.

As I expand my trade possibilities, then I am increasingly able to enjoy division of labor and comparative advantage, exchanging my relative surplus of some goods with neighbors for their relative surpluses. Because value is SUBJECTIVE, our simple barter betters both parties, even though no goods were created and no work was performed (other than that involved in the barter and exchange).

Imagine how my living standard and access to goods, therefore my general weal, might increase if I were able to use some readily exchangeable medium, like “money,” to allow customers in far-off places like China to purchase the products of my skills, and be allowed to enjoy the luxury of goods from other places, like fine Ethiopian Yirgacheffe – which I buy roasted locally only because they produce a better product and product range than any I’ve found elsewhere.

The maximal benefits of free exchange are always obtained through the widest range of possible exchange.

Efforts to coercively keep exchange limited in order to benefit a chosen few (”mom and pop” shopkeepers, perhaps) amount to a “tax” on all persons, who have to pay more (or receive lower quality) by being forced to stay local, with “payment” or redistribution of that tax to local producers. After all, if the local “mom and pop” shops produced better quality goods/services for the money, they’d not be losing business, would they now?

Suggested further reading: “I, Pencil – My Family Tree as Told to Leonard E. Read” (PDF).