Investing locally: An idea whose time may have come again

Most people who are concerned about the place they live know about buying local and eating local. Now comes an idea that takes those concepts even further -- investing locally.
 
"Locavesting" is the title of a book published in 2011 by Amy Cortese, a journalist who writes about business, finance, environmental issues and food. The subtitle is "The Revolution in Local Investing and How to Profit From It".
 
Cortese shows us there is an alternative investment option to what she calls the "Wall Street Casino", where we invest money that may go anywhere except back into our community. She provides us with a number of examples in which people have made a respectable profit by investing in local enterprises that have provided jobs and revenue that have remained in the local community. She also makes the claim that the risk is less than we might think.
 
Cortese does not offer local investing as an option that solves all of our problems, but she does make a persuasive case that we are not limited to just standing by and learning about a few people who move money around, make a sickening amount of money for themselves, provide no value to small businesses or any communities, and pull out their money when they choose, often leaving a community impoverished and with fewer jobs.
 
Book Review
You may have wondered, as I have, what the billboard for Cops and Doughnuts along the road going into Grand Rapids means. It is the name of a bakery in Clare that was going broke until all the members of the police force in the town put up their own money to keep it going under another name. Today it is a thriving business that draws customers from far beyond the Clare city limits and employs 19 people full time.
 
Perhaps you are familiar with the story of how Ben and Jerry saved their business by calling upon local people and customers to invest, allowing their premium ice cream business to expand and become a huge brand.
 
Maybe you know about the time in our history when there were local stock exchanges throughout the country. Cortese raises the possibility of resurrecting that old idea in our times. She explains that between 1862 and 1930 at least 24 regional exchanges were formed. The last ones closed their doors in 1991. The local exchanges had been primarily founded to provide capital for local businesses, which served their communities. 
 
Cortese cites a study by researchers at Franklin and Marshall College which showed that on average, between 1790 and 1930, in regions with local exchanges manufacturing jobs increased by 175 percent, compared to 76 percent for the nation as a whole.
 
She also makes the claim that today perhaps 1 percent of the trillions of dollars invested in our stock exchanges goes to "productive use", that is to fund companies that make products and provide jobs. She says, "small and mid-sized companies--the engines of job creation and innovation that were once the mainstay of Initial Public Offerings (for sale of stocks)--are now as rare as a floor broker."
 
In Kalamazoo and elsewhere in Southwest Michigan, we have seen how the "buy-local" campaign is succeeding. We are also joining the "eat local" movement. Cortese calls on us to consider adding investing as a third component of a multi-level strategy for building our community, strengthening our local economy and preserving the environment, as well as our physical health.
 
These three components raise the question of what is a self-sufficient (or perhaps relatively self-sufficient) geographic and social unit of association. Is it a county or a region that can provide at least almost all that we need for survival and well-being?
 
Share your thoughts if this article resonates with you and indicate if you are interested in coming together to consider acting on these ideas.
 
I bought my copy of the book at Bookbug over in the Oakwood Plaza. Even if they are out, they can order it for you. Keep the local work going with a purchase.
 
George Martin received his Doctor of Ministry Degree from the University of Chicago Divinity School. He has reflected for many years on the interplay between creativity, leadership and on building communities. 
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