Montana’s Public Service Commission has unanimously rejected an Australian firm’s offer to buy NorthWestern Energy. In a recent column, I explored the historical context for Montana’s wariness to deals involving outsiders. Several readers whom I respect confused my explanation with opposition. I don’t know why the PSC denied the deal, but they are too sophisticated to do so simply because the prospective buyer is an international company. This would be to engage in economic xenophobia—a sure recipe for failure.

Adam Smith first explained how societies that embrace openness and competition gain ground. Economic engagement, Smith explained, expands opportunities and allows consumers to purchase goods and services that are either not available locally, or only at higher prices. These prices provide information that allows individuals and industries to discover just what they do best. This encourages the development of specialized talents, fostering efficiency, diversity, and innovation.

My family and I enjoy seasonal produce from the Community Food Coop and the Farmers Market, and local meats from Bozeman’s wonderful Meat Shoppe. But can a society prosper by producing goods and services from resources solely within its own borders? Not likely. Imagine how much poorer and duller our lives would be if we had to produce most everything ourselves.

Much of modern environmental thought is animated by a desire for self-sufficiency. The bucolic ideal of “Ecotopia” took off with the publication of E. F. Schumacher’s 1973 book Small Is Beautiful, one of the most influential environmental works of the last century. In it, Schumacher outlined his theory of “Buddhist Economics.” A key principle is “production from local resources for local needs.”

Authors such as Bill McKibben, Jeremy Rifkin, and Kirkpatrick Sale have continued Schumacher’s legacy. They argue that local, isolated economies will “create stability and balance and predictability.” If products “cannot be made locally by the community, using readily available resources and technology, then it is most likely unnecessary that it be produced at all.” (I wonder how Bozemanites would feel about going without mountain bikes, snow tires, or cell phones?)

Bill McKibben touts the benefits of economic isolation in his latest book, Deep Economy. Mr. McKibben believes global commerce is rapacious, consuming finite natural resources. This process, he asserts, threatens to destroy the environment—and localism is the solution. Here’s a story that probes this vision.

A group of students from Drexel University set out to produce a man’s suit. They were limited to using materials found within a 100-mile radius of the school. Wired Magazine generously describes the result: “The suit took a team of 20 artisans several months to produce, 500 man-hours of work in total… the finished product wears its rustic origins on its sleeve.”

Follow the link to see photos of the “100 Mile Suit”; then look at photos of the global alternative—custom-tailored suits made in Nepal from Italian wool and delivered to your door in two weeks for $300 or less.

The notion that the environment would somehow benefit from six billion people “going back to nature” is preposterous. About 12,000 years ago, armed with stone-age technology, the Clovis people likely hunted to extinction nearly three-quarters of North America’s large mammals, e.g., mammoths and ground sloths. Nobel prize winner Vernon Smith explores this (and other topics) in a fascinating paper, “Economic Principles in the Emergence of Humankind.” Dr. Smith will lecture at FREE’s July conference for federal judges. (Contact me if you’d like a copy of his paper—it’s worth your time.)

The aim of economic development is not to destroy the natural world, but rather to benefit humanity. Since environmental protection is not free, wealth creation is a prerequisite for constructively dealing with the negative environmental consequences of economic progress. Human ingenuity overcomes many formidable barriers—including environmental ones.

If we are to continue to make economic progress, not simply grow, economic isolation is not the answer. We need to stay engaged with the rest of the world. We will be poorer both in real and environmental terms if we turn our back on the global marketplace.