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The Coulee News (Wisconsin)

Economy Needs to Become More Local

Dave Skoloda

In an earlier period of hard times for Americans, my grandmother Florence I. Skoloda sat at her kitchen table and noted in her little blue diary that she had paid $20 on her grocery bill having just received a $32 pension check.

The pension was from the federal government based on my grandfather John's service in the Spanish American War. He had died two months before her entry dated Nov. 12, 1938, just a few days after Kate Smith sang Irving Berlin's "God Bless America" for the first time on her radio show.

What struck me when I read that entry a decade ago when I found the book among my father's things after he died was that Grandma's neighborhood grocer had trusted her with credit even during the Great Depression.

I revisited Grandma's little blue book last week after reading James Surowiecki's analysis of our present financial debacle in his column "The Financial Page" that appears regularly in the New Yorker magazine. Surowiecki wrote that the credit meltdown reflected a lack of faith in the models and systems lenders relied on to evaluate risk.

While the financial system had vastly increased the amount of lending, it also came at a cost. "The problem with an impersonal system is that when the models fail, and when companies' ratings become suspect, everything is called into question. Lenders can't fall back on their own judgments of a specific company or individual, because such judgments aren't part of their typical decision-making process," he wrote.

So the operative system now is the old motto: "In God we trust - all others pay cash." according to Surowiecki.

Grandma didn't have much cash; she needed someone to trust her.

So now we are struggling to restore that trust to the credit system and re-examine our assumptions about our economic system.

Wendell Berry, the prophetic philosopher, essayist and poet to whom I have often turned for help in understanding our world, advocates developing and putting into practice a more local economy as opposed to the global "free market" that is now in a shambles.

The failure of the financial system demonstrates Berry's criticism of government's inability to protect people and communities from a great concentration of wealth and power. Given that, the people need to turn to "a venerable principle: powers not exercised by government return to the people," he wrote in a 2001 essay in Orion magazine.

For starters, people should begin to protect themselves, he said, with "the idea of a local food economy. People are trying to find ways to shorten the distance between producers and consumers ... and to make this local economic activity a benefit to the local community."

There is increasing evidence since his essay that this is happening, both here and elsewhere. Local community-supported agriculture farms and multiple farmers markets are expanding, locally produced foods are being sold in local food markets and The New York Times had an article recently about a community in Vermont that is rebuilding its economy around small-scale agriculture. So that's a start toward a more rational system.

However we begin to reconstruct our economic system, I hope that it has a community scale such as Berry advocates - trust based on personal observation and things that we can understand. Grandma made it through the Depression with her small government pension, her grocer's trust and help from family and neighbors, which was also noted in her blue book. Let the rebuilt system also include compassion.


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--Dave Skoloda

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