Anniversary Issue: The money at home - Page 2

A sustainable local economy starts with small business — and the public sector
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And money spent in small businesses circulates in the local economy; the proprietor of the local hardware store takes his or her revenue and spends it on shoes for the kids. The shoe store owner takes that money and buys groceries at the local market. Every dollar goes around several times; and each time, it adds economic benefit — what economists call the multiplier effect.

A dollar spent in a chain store leaves town within hours, wired to a central corporate headquarters where executives care nothing about San Francisco — save as a place to extract wealth from.

Jacobs was brilliant, but she had her libertarian leanings. She often argued that it was best for government to get out of the way and let economies grow organically. That may have made sense to someone who came of age fighting the old-fashioned redevelopment programs and top-down urban planning of the 1960s and '70s. But the modern urban economy not only needs help from policymakers, but clear direction — particularly in unsettled times like these. As William Greider wrote in The Nation Oct. 20, "only government has the leverage to get the money moving again."

In fact, modern progressive economic thinkers say that the public sector has a huge, perhaps defining role to play in building a sustainable local economy.

"The city needs to emphasize the public over the private," Morris told me. A sustainable economy, he said, is "a society where the public commons grows and the private shrinks." Taking public programs and services and turning them over to private business — which is all the rage in the Mayor's Office these days — is about the worst thing a community can do.

So what could City Hall do to create a more sustainable local economy? Start, Morris says, by reducing the need for money. "The things that are most valuable in a sustainable economy are those that are free," he said. That means keeping libraries open, making more public space accessible, offering free public events — and encouraging people to reuse even the basics. "There's no need for most people to buy new clothes, especially for kids. Sustainability starts with people substituting free things for costly things."

That could mean, for example, city-run clothing exchanges (and toy exchanges and places where used construction materials could be traded). It also means leadership by example: Mayor Gavin Newsom isn't as big on conspicuous consumption as his predecessor, Willie Brown, who bought new imported Italian suits by the rack. But he's hardly been known for promoting a low-consumption lifestyle. "The mayor could announce, for example, that he is going to reduce his consumption of imported goods by 75 percent in the next year," Morris suggested, "and show everyone how he's going to do it."

Then there's distance — both physical and psychological. Obviously, reducing commutes and the need for long-distance shopping trips is a factor, but it's not enough. "You need to shrink the distance between the people who visit the private economy and the people who run it," he said. The owners of businesses need to live in the community. They need to interact with their customers and neighbors, to see the local schools where their tax dollars go.

In Bellingham, Long's group worked with local government on a large-scale marketing campaign with the slogan "think local, buy local, be local." Their effort involved an advertising campaign, a coupon book, and even a mascot. "We have a bee who goes around to events; it's the Be-local Bee," she said.