Book Review: The Local Economy Solution


MoE contributor Moriah Lee reads Michael H. Shuman’s The Local Economy Solution.

What does it mean for a town to be stable economically? Why do we care as consumers where we get our beef, our jewellery, our hardware? Buried in the depths of statistic indicators are answers such as reduced vulnerability to crises, sustained growth, or high standards of living. Put differently, a stable economy might mean that a student chooses to finish high school, when his parents hadn’t, because he can rely on a job when he graduates. It might mean that fathers don’t ignore their health problems because they’re able to afford surgery.

In The Local Economy Solution, Michael Shuman argues that supporting our daughter’s teacher’s dad at the local hardware store does more than simply give us warm fuzzies inside. The local economy is the one that we live and (hopefully) thrive in, owned and operated by people in our own community.


The premise of Michael Shuman’s incredible book is that the answer to achieving regional economic stability lies in developing these local economies. He does this through some thought provoking statistics and chapter after chapter of anecdotal chicken-soup-for-the-community-developer’s-soul tales of local successes.

In my stint as a graduate student, I often wondered why people, why I, studied macroeconomics. I left school feeling like one of Shuman’s heroes – certain that the “best approach to justice is a healthy economy rooted in strong local business.” The field I thought I was getting into was one where I would help families in communities in which I worked to find better paying jobs through environmentally and socially beneficial business.

This should be the role of the US Economic Development office. However, Shuman criticises their approach to development – in particular the implementation of “attract and retain” policies that throw away costly incentives to outside companies – companies that have no interest in the community except the bottom-line benefit they receive by coming into it.

‘Good’ economic development has gone bad in decaying urban cities and depopulating rural communities alike. We can’t point to bad decisions on the part of impoverished people as the culprit for lack of access to education, good jobs, or health care. There are deeper, structural problems. But apart from his comments regarding government policy, Shuman’s approach to tackling this subject is constructive, focusing on homegrown solutions. He praises local innovators who have taken unorthodox methods to building the local economy.

These people tend to fall into two categories. The first – the Ernesto Sirollis and Lou Steins of the world- have gone to local business and asked what they could do to help. In doing so, they’ve created an economic renaissance. The second category are local community residents themselves, who recognised a gap, rolled up their sleeves and filled it. Shuman coins the phrase “pollinator business” for the latter local innovators; from SupPortland in Portland to Zingerman’s conglomerate in Ann Arbor.


Photo credit: Alice Henneman

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