A little tidbit in the news caught my attention today, apparently Starbucks is going to raise its prices. The article identified the following as the main reason:
Starbucks Corp will raise U.S. prices on coffee, lattes and other drinks by an average of 9 cents a cup next week to help offset soaring costs for milk and other commodities, a spokesman said on Monday....U.S. milk prices have soared recently amid strong global demand for dairy products and higher production costs.This is interesting to me. It has been argued by our Capitalist opponents that not only does economic liberalism provide us with more efficiency (which is false) but it provides us with lower prices too. The latter claim is sometimes true. Yet let us look at this situation. Because of the increasingly nationalized and globalized economy, one off set in one place potentially can raise costs in other sectors. Because the costs of milk production are going up (due to national diversion of corn toward worthless bio-fuels and high gas prices) the national market price goes up, and consequently anything made which uses milk by say, restaurants. So, in spite of the efficiency and low prices we are supposed to get with Capitalism, the prices are going up.
Now I will contrast this with a local example. Not far from my small abode, there is a coffee shop, privately owned, which produces brewed coffees, lattes and blended whipped drinks much like Starbucks. Personally I think they are better than Starbucks, but we'll leave that aside, that is scarcely the point. They get local milk from local farmers, coffee from local roasters, and their prices are lower than Starbucks by more than 20 cents for every comparable product. Why? Simply because a local market is not as subject to national trends as a national market is, and is therefore much more efficient, reducing the number of hands and the resources used to ship, and therefore lower the prices. This is why Distributism focuses on creating local markets, because they more effectively control prices and create more efficient markets than Capitalism does.
To buttress this point about local markets, we should also consider the health effects, or defects of large global markets. One need only reference the tainted food coming from China that we keep hearing about in the news. Closer to home, the average McDonald's hamburger has meat from hundreds of cattle all over the country. If an infection of any kind occurred in one of the steers, it could taint a huge amount of meat! On the other hand, if your meat comes from a local butcher, with steers that are identifiable, it is that much easier to identify and contain outbreaks of disease among cattle.
A local market helps to attain more efficiency and more control over costs and ownership, by eliminating the number of hands capital must pass through before it is produced into wealth or consumed, and consequently, spreads ownership far and wide through numerous local economies rather than concentrating all wealth in the hands of a few owners located in diverse locations around the world.