SIX P’s: Michael Shuman’s pointers to a prosperous, local economy

Sustainability requires that every community meet the needs of all its members (including plants and animals), present and future, without compromising the needs of other communities meeting the needs of their members, present and future. — Michael Shuman

Is neighborhood economics at a tipping point? Consciousness certainly seems to be getting there.

Think how many people read labels to see where something’s manufactured, and take time to buy locally-produced goods. Consider too how far this concept has come in the span of 20 years. In 1998, Michael H. Shuman, an economist/ entrepreneur / expert on community economics, gave his first talk in conjunction with his book Going Local. This was at the University of Kentucky. Two people showed up. One left early.

In 2016, when Michael Shuman visited San Francisco as a keynote speaker at SOCAP – the entire day’s focus was all on his specialty: neighborhood economics. This time, there was easily more than a hundred people in attendance, soaking up his seasoned insights with palpable, keen appreciation.

This is a skeletal summary of some key points, plus a few links to some of his vital resources.

Interestingly, he began by projecting on the screen the image of a famous critic of local economics, Karl Marx. The fact is, revolutionary grandpa Marx identified local economy with the petit bourgeois, traditional upholders of the status quo. Yet local economy is where today’s status quo is susceptible to radical, positive change.

The Marx reference is ironic. Yet, for a seeming paradox in local economies, Michael Shulman asks us to consider how local business employers tend to pay less than global corporations can, yet they contribute more to ending poverty and increasing prosperity. How? By increasing per capita growth rate. Compared to chains and other nonlocal businesses, local capital creates job growth, which is a fundamental economic multiplier.

Another advantage of growing business “in place,” is in its being rooted. A locally-owned business isn’t about to pull up its tent stakes and move operations overseas. And local business contributes to the vital web of civil society, an essential invaluable for democratic society to thrive.

As a cheat-sheet for remembering six keys steps for a flourishing local economy, Michael Shuman unveiled his 6 P’s:

  1. Planning – Plug the leaks. Analyze all the places in your local economy where you are unnecessarily buying outside goods and services.
  2. People – Support local entrepreneurs.
  3. Partners – Compete through collaboration. Try to organize local business alliances so that businesses working together are more competitive than they would be working apart.
  4. Purse – Harness pensions locally. (This could create a one trillion dollar shift.)
  5. Purchase – Spearhead “Local-First” campaigns.
  6. Policy-making – Remove anti-local biases.

The viability of local economies, the Transitions Towns movement, and local food all attest to the time being right. As we move forward, please keep Michael Shuman on your radar screen. He has much to teach us, and does so in a concise, clear way, reflecting decades of personal engagement, that’s positively tonic. His two latest books are THE LOCAL ECONOMY SOLUTIONHow Innovative, Self-Financing “Pollinator” Enterprises Can Grow Jobs and Prosperity (2015), and his community resilience guide LOCAL DOLLARS, LOCAL SENSEHow To Shift Your Money from Wall Street to Main Street & Achieve Real Prosperity (2012). Two recent shorter pieces also worth perusal are his 24 Top Tools for Local Investing, and Revitalizing Communities from the Inside Out, his entry in the Centre for Civic Governance’s book RESILIENCY: Cool Ideas for Locally Elected Leaders (Volume V of their Going for Green Leadership Series).