Yes, minimum wage jobs for the locals, most of the profit goes to Bezos.
When you shop at locally-owned stores the money goes to a local small business owner, truly staying local.
Look up how walmart used to destroy small town economies by bankrupting all the local businesses and converting all those previously middle-class shop owners into minimum wage jobs at walmart.
Most of the profit is distributed to a wide variety of shareholders in the form of rising share prices, reflected in things like retirement accounts. In other words, a lot of that profit goes to grandmas across the country with their money in a Vanguard retirement fund. Including grandmas in your local community.
And you really think the local shopowner kept all the profit in their community? E.g. they didn't send their kids to college in another state? Or build a house with materials sourced from all over the country?
It's a whole lot more complicated than you seem to think.
> And you really think the local shopowner kept all the profit in their community? E.g. they didn't send their kids to college in another state?
Imagine spending money and having that money allow people in your local community to afford college.
Then imagine thinking that’s a bad thing.
Obviously it’s complicated, but the gist is longer money stays in a local area, the better off that area is going to be.
It’s better for money to leave my town so that my neighbor’s kid could go to college than it is for me to get two day shipping on a new game console.
A pathological case could be made that every dollar that you keep in town is a dollar someone spends outside of the town.
That’s a valid argument in theory, but in reality that doesn’t happen.
People go to local businesses and spend money. Local bars, specialty markets, farmers markets, etc.
GP definitely did not say he thinks having people in the local community afford college is a bad thing. That's quite a straw man. Their point about the money quickly leaving the local economy is valid. If the shop owner is making a reasonable wage at the end of the day, then I think the local effect is good. Doubly so if they employ people from the local area. However, if the shop owner is getting rich and most of those profits are going into a fat bank account, then it makes no difference to the local economy. If helping the local economy is really your goal, I think there are much more efficient ways.
That said, I do mostly agree with you. Where we might differ is that I don't accept paying significant markup to shop local. If an item I want is available locally and is close to the same price as online, I will go local every time for exactly the reasons you mention: to help the local economy. But I have a low tolerance for The outrageous markup that most Small shops insist on applying. In my opinion, those shops probably should go out of business by being non-competitive. That would open up some room for a less greedy retailer to come and be more of a service to the local community.
> if the shop owner is getting rich and most of those profits are going into a fat bank account, then it makes no difference to the local economy
While arguably not ideal I would also argue that is still better than the same profits being captured by an increasingly centralized corporation many states or countries away.
Local millionaires using a bank will incentivize that bank keeping branches open in town, which can help other locals more easily maintain savings accounts. I personally make a point to use at least one locally incorporated bank for similar reasons.
Even something frivolous like a local millionaire buying a powerboat stimulates the economy because the infrastructure that is required to maintain that keeps a demand for other jobs open and keeps money flowing.
Now I’m not saying powerboats are intrinsically good. All I’m saying is that if someone is going to buy one with the profit captured from running a business selling eg home goods, it’s better for a local economy for a local to do it vs a Bay Area Bezos a thousand miles away.
You seem to have missed my point entirely. I'm not saying that's a bad thing -- but I'm saying that by your logic, you seem to think it is.
You're looking at money like it's some kind of zero-sum thing that ought to be hoarded by every local community. You say:
> but the gist is longer money stays in a local area, the better off that area is going to be
That is contrary to all standard economic theories of free trade. The entire engine of economic growth is that when communities trade between each other, everyone's standard of living goes up.
The economy theory you seem to be promoting is what is known as mercantilism [1], which has been thoroughly discredited.
Circulating money broadly is a good thing. You don't need to worry about it leaving your local area, because it comes back according to whatever goods and services you produce! You don't need to hoard it locally.
> it comes back according to whatever goods and services you produce
Extractive industry like Amazon kill the local producers and siphon the money out of smaller areas and concentrate it in richer areas. When there are no local producers or wealth left, what is there to circulate or trade?
Amazon is an Internet-myelinated version of the Wal-Mart effect, with more packaging waste.
> When there are no local producers or wealth left, what is there to circulate or trade?
If that were true, then sure it would be a problem. But I don't know of many communities in the US where there are literally no jobs, nothing being produced at all. Where economic activity is zero.
Some jobs go away and new ones arise. And remote work makes it easier than ever for jobs to move from cities to smaller areas.
Can you really show that Amazon has had a net effect of shifting wealth "out of smaller areas" and into richer ones? Especially when you consider the amount of money it saves people in smaller areas, which makes them more wealthy than they would be otherwise?
I cannot. I am operating on an assumption that each dollar that goes to Amazon vs a local producer is an opportunity cost for the community’s long-term wealth. Saving a few bucks here and there on individual purchases seems like short-term thinking and small potatoes. Scaled up, that is what lead to rust belt decay after offshoring so much manufacturing. I know a lot of ink has been spilled on the effects of walmart and dollar stores on local economies, but I will also admit that I have not done any legwork to vet the hypotheses or conclusions, or if I have, I’ve forgotten and wouldn’t be able to produce any citations. As far as I can get in systems thinking with the initial conditions I know, which is assuredly a small subset of the totality of reality, the concentration of ability to produce and purchasing power is dangerous for those in the leaf nodes. I’m always interested to see more data proving me more right right or wrong on this.
Amazon is a big employer in a lot of local communities.