Rational people try to buy what they need at the cheapest price they can find. There's a contrary argument, though, that holds that it's "shooting themselves in the foot" for poor folks to shop at big-box stores and eat at chain restaurants: Buying cheap goods from the same companies that use globalization to grind wages down as low as possible--doesn't that amount to supporting their own oppression?
The people who make that case are mostly affluent, upper-middle class folks. They want to eat local (preferably organic) food, buy stuff that isn't made by children or slave labor, and avoid supporting activities that deplete fisheries or promote global warming. Their choices are limited, though, because there aren't enough people like them. In order for the choices they want to be readily available, they need to expand the market--by getting the poor, working class, and middle class to buy into the whole "vote with your dollars" notion of supporting local production of food and crafts.
The case for local
When you buy what's cheapest, the money typically goes to a chain store. Some of the money stays in town--they hire local workers, pay local taxes, use local utilities--but most of it disappears into the vast reaches of globalized trade. In particular, any profits go almost exclusively into the pockets of the extremely wealthy.
When you buy local, almost all the money stays in town. You can construct whole fantasies of local groceries and restaurants buying meat and produce from local farmers, spending their profits at local shops that buy their goods from local craftspeople, who then have enough money to hire local workers, producing a virtuous circle that benefits all the local folks.
I call it a fantasy, even though I agree with the basic premise. Because, here's the thing: Yes, the folks shopping at the big box stores and eating at chain fast food restaurants are sending out of town money that local businesses might have used to hire them or buy from them, but they're still coming out ahead. And that's especially true of the poor and working-class folks.
The affluent folks talk a lot about how moving jobs overseas not only costs jobs in the US, it also puts huge downward pressure on the wages of the jobs that remain. My back-of-the-envelope calculations, though, suggest that working-class folks still come out ahead--because the stuff they buy is so much cheaper.
The case against local
As recently as the 1970s, setting up a first apartment was a very expensive undertaking (which is why there's a tradition of things like house-warming parties and wedding showers). In 2008, the cost of setting up a minimal household (a pot, a skillet, two or four place settings, a few glasses, something to sit on, and something to sleep on) is probably as cheap as it has ever been, at least since the days when hunter-gatherers made everything they needed themselves.
This fact serves as a great wedge between the poor and working-class folks on the one hand, and the upper-middle class folks on the other. When someone says, "Hey! Shopping at places like WalMart is shooting yourself in the foot!" all the poor person knows is that someone is trying to take away his one chance at coming close to a middle-class standard of living.
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Yes, if everyone tried to buy local, the money would stay in town--ready to be turned around to buy other local stuff and hire other local folks. The production wouldn't end up in China or India or Bangladesh, and the profits wouldn't end up on Wall Street. But the young couple trying to furnish their first apartment would have to sleep on the floor for months to cover the difference between a bed from Ikea and a bed made by a local woodworker. How long should they eat out of cooking pots to save up enough money to buy ceramic dishes produced by a local potter when they could buy some Corelle for just a few dollars? I've seen stainless steel flatwear on sale cheaper than plastic--what local producer could come close?
(As a practical matter, currently poor folks can probably do best of all by buying a mixture of local and used. Between thrift stores, garage sales, Craigslist, and FreeCycle you can almost certainly find everything you need to set up housekeeping even cheaper than you could do it at the big-box stores. Of course, it might take several weeks to get done what you could do in a couple of hours at WalMart and Ikea. Besides that, though, the strategy only works because so many people are buying so much cheap stuff that there's a surplus available to be sold cheap or given away.)
The ethical arguments are valid. I don't want to buy things made by children or slaves. There are also some long-term practical arguments to support local production as well. I don't want to buy things made in ways that destroy the natural systems that future production will depend on. Further, locally produced stuff can be better than the stuff sold cheap in globalized trade. (This is particularly true of food, which is often both tastier and healthier.)
But the purely economic argument in favor of local production, although appealing, is probably just wrong. The reason the globalization model works is that we've exported our poverty. If we keep the production local, we either have to have much more expensive goods or else we have to pay our local workers the same pittance that the overseas workers get paid--making the working class much poorer.
Because of that, I think the economic interests of the broad middle class turn out to align with the poor and working class folks. If we want the ethical and long term arguments to win out, the strategy of just trying to convince people that local is in their interest is not a winning strategy.
