AUBURN – A totally local economy is the route to socially responsible and self-reliant communities, said an author and economic development consultant when he spoke in Auburn Tuesday morning.

Michael H. Shuman said his ideas address “the way that I respond to the fears that many of us have about the global economy – fears that bigger and bigger fish are consuming communities and small business.”

Shuman said the keys to economic prosperity are locally owned businesses that focus first and foremost on local markets.

“It’s not just a nice thing for your economy; it’s a critical thing for your economy,” he said.

He referred to “the struggle of capitalisms,” and suggested that two types of capitalism can be called TINA (There Is No Alternative) and LOIS (Local Ownership and Import Substitution).

“We need to figure out a way of dealing with that and, to me, the answer is re-empowerment of communities and small business,” Shuman said.

Avoid leakage’

An advantage of a local economic strategy is the avoidance of destructive exits by large companies that have become a community’s employment and economic base, he said. Shuman’s remarks summarized some of the advice he has offered as a consultant in Millinocket since the shutdown of the paper mills there.

He emphasized that local economies need to retain and circulate dollars “without leakage.” That means the multiplier effect of dollars generated in a local economy is three times as beneficial as a traditional economy where dollars flow to outside owners.

“There are three or four advantages to local ownership,” he said. These include the fact that local businesses don’t – or rarely – move, wealth generators of local businesses last many years, and labor and environmental standards can be raised “with confidence that the businesses are going to adapt rather than flee.”

Noting that there is a tendency to think that local ownership is “a kind of a dying breed in the United States,” Shuman said he believes the opposite is true.

“Local ownership is about 60 percent of the U.S. economy and I believe that percentage is going to grow,” he said.

Local credit cards

Shuman said Maine is well-suited for local production of food and local energy generation through biomass, hydropower or wind power.

In addition to “leak plugging” of dollar losses through local food and energy production, Shuman suggested that there could be local debit and credit cards issued by a town’s local financial institutions so that interest and fees don’t flow away.

He also advocated local stock issues for companies.

In comments about Millinocket, Shuman said he believes a local poultry industry could be established there, as well as other self-sustaining businesses. He said the unemployed workers there should be viewed as “potential employees” for the local economy he proposes and that abandoned land can also be viewed as an asset.

He also discussed how global trends are expanding opportunities for local business in Maine and how a combination of initiatives in local planning, purchasing, investing, training and policy making undertaken by Maine Businesses for Social Responsibility and others can help Maine towns to seize these opportunities.

Shuman spoke at Central Maine Community College. His presentations have been hosted throughout the state by Maine Businesses for Social Responsibility, which is based in Belfast.

Shuman is executive director of Community Ventures in Washington, D.C.. He also serves as a consultant for the Training and Development Corporation based in Bucksport.

He is the author of “Going Local: Creating Self-Reliant Communities in a Global Age.”