Discretionary and essential spending and markets in localism

Question: When the economy is based on families and extended families, will discretionary and essential spending and markets apply in localism?


Yes, even in a localism-based economy centred around families and extended families, the concepts of discretionary and essential spending and markets would still apply. Here’s how:

  1. Discretionary and Essential Spending: In any economy, some goods and services are considered essential for survival and daily functioning, such as food, shelter, clothing, healthcare, and education. These would still be crucial expenditures for families in a localism-based economy. Discretionary spending refers to non-essential purchases, such as entertainment, luxury goods, or travel. Families would likely allocate their resources based on needs versus wants, just as they do in broader economic systems.
  2. Markets: Even in a localism-oriented system, markets for goods and services would still exist. These markets might be more localized, with transactions occurring within communities or among neighbouring communities. However, the principles of supply and demand would still apply. Families and extended families might engage in bartering or local trade networks to exchange goods and services, but there would still be an exchange of value based on market dynamics.

Localism often emphasizes community self-reliance and resilience, which can lead to more localized economies. However, the basic economic principles of resource allocation, supply and demand, and the distinction between essential and discretionary spending would likely persist, albeit in a more localized context.

Question:  But much of the labour within the extended family will be free.


In a localism-based economy centred around families and extended families, it’s common for labour to be shared and often unpaid within these social units. This dynamic can significantly influence how the economy operates:

  1. Barter Economy: With labour often shared freely within extended families, the economy may rely heavily on bartering goods and services rather than monetary transactions. Family members might exchange their skills and time directly with each other or with other families in the community.
  2. Community Interdependence: Relying on unpaid labour within extended families fosters a sense of community interdependence. Families support each other financially and by sharing labour, resources, and knowledge. This can strengthen social bonds and resilience within the community.
  3. Informal Economy: Much of the economic activity within a localism-based system may occur outside formal market structures. Instead, it may occur within informal reciprocity and mutual aid networks. This informal economy is based on social relationships and trust rather than monetary transactions.
  4. Valuing Non-Market Work: In such an economy, the importance of unpaid labour, particularly caregiving, household work, and community maintenance, is recognized and valued. While this work may not be directly compensated in monetary terms, it plays a crucial role in sustaining the social fabric and well-being of the community.
  5. Market Participation: Despite the prevalence of unpaid labour within extended families, there may still be participation in formal markets for certain goods and services that cannot be easily provided within the community. Families may engage in market activities to acquire items like technology, specialized services, or goods not locally available.

Overall, while much labour may be shared freely within extended families in a localism-based economy, interactions with formal and informal markets would still occur, albeit within a framework that prioritizes community well-being and mutual support.