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To buy local is loco

March 2nd, 2011 Posted in Economics, International Development by

Over at Cafe Hayek, George Mason professor of economics Russ Roberts turns his guns on the ”buy local” fallacy.

Roberts is a far better economist than I am, and I have no doubt that he has a better understanding of the value of trade, but I am left feeling that somehow his article fails to get to the root of the issue.

I have therefore set out my own reasons why the Buy Local movement is actually harmful to human development and will reduce welfare. This boils down to the fact that it is anti-trade, preventing people from benefiting from the most effecient providers across the country or the world; that it undermines the principle of specialisation on which human development is based; and ignores Comparative Advantage, which makes it worthwhile for even the most and the least efficient producers to work together.

Please head over to the IEA website and take a look at the full article. I have closed the comments section below to encourage readers of this site to comment in the same place as readers of the IEA site.

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