Julian Baggini: There's a dark side to this piety about 'going local'

I'd rather go to John Lewis than the locally run café whose bastard of an owner exploits the underpaid

A decade ago, "This is a local shop for local people" was the catchphrase of a parochial, psychotic couple in the brilliantly twisted TV series The League of Gentlemen. Now it's become the rallying cry of progressives in search of an alternative to the excesses of global capitalism. Local has moved from being the preserve of the small-minded to the ideal of the high-minded, overtaking sustainable, fairly traded and organic to become this season's must-have ethical prefix.

This is particularly evident in Bristol, where I live. There is an incredible number of local, community-run initiatives, with many small traders coming together in a high-profile "Bristol Independents" campaign. Taking this idea to the next level is the just-announced local currency, the Bristol Pound, which unlike Sterling must stay in the city. This, it is claimed, "helps to plug the leak of money leaving the area, making Bristol a stronger economy and less affected by world issues".

Now I'm a keen supporter of local independent businesses, prepared to pay more and walk a little longer to do so. But apart from perhaps porridge and Miles Davis's Kind of Blue, nothing is an undiluted good, and there is a dark side to this new localism that we have to address.

The key is that if you look at most of the good reasons to go local, it's not really the local bit that counts. Both Bristol Independents and the Bristol Pound, for instance, make much of the fact that when you spend money at a large multiple, much of it ends up swishing around the financial system or in the offshore accounts of wealthy investors, directors and CEOs. More of the money spent at a small business, however, goes directly to good, honest people trying to make a living in the local economy.

But if you're really concerned about who profits from your spending, "Go local" is a pretty crude rule of thumb. For example, I'd rather spend my money at the John Lewis Partnership, which distributes its profits among its staff, than give it to the kind of locally owned and run café I worked at as a school kid, whose bastard of an owner made a fortune by exploiting a combination of often underage and always underpaid workers.

What matters is surely that the profits of the business are shared fairly, not that they stay in the local area. Indeed, this is something many ethical independents acknowledge by making sure their supplies from the developing world are fairly traded. These supply chains need to become even less local, not more. Developing world producers can make a lot more money if they process and package goods at source, rather than exporting them for all the value to be added in the West. The most ethical chocolate bar is not handmade by artisans in Bristol, but produced in the Ivory Coast to high ethical and environmental standards.

Concern to help distant communities through trade has come a long way from the days of tolerating bitter Nicaraguan coffee in the name of solidarity. The total value of Fairtrade certified goods in the UK, for instance, grew from £21.8m to £799m between 1999 and 2009. The embrace of localism, however, risks halting or even reversing these advances. Many are already shunning airfreighted Kenyan peas or South African blueberries, shaving mere fractions off their own bloated carbon footprints, while depriving the genuinely needy of their livelihoods. If you add to this the conviction that money should be kept as local as possible, then the vow we made so recently to Make Poverty History will be fulfilled only in the sense that it will be an issue left abandoned to the past.

There is another reason to be sceptical about localism. It is telling that Bristol Independents, for example, cites both the green-red New Economics Foundation and the Red Tory ResPublica think-tank, led by one of the gurus of the Big Society, Phillip Blond, in the same sentence. What Roger Scruton calls oikophilia, the love of home, is a deeply conservative instinct. Of course, this can be benign, but what has marked out the progressive left and centre over the years has been a principled desire to widen the moral circle, so that we care about more than kin first, kith second and nation third.

There is increasing evidence that this kind of expansion of the moral imagination requires some effort. Our natural inclination is to proportion moral concern to the closeness and similarity people have to ourselves. Getting involved in the community feels good in ways which helping distant people does not. My fear is that, however noble the motives, the rush to embrace localism, with its desire to be "less affected by world issues", will nurture this natural narrowing of minds.

I will continue to support local shops and I may even spend some Bristol Pounds. But the kind of localism I want is an inclusive, open one, in which local wealth leaks out to wherever it will do good, and we look out to wherever good is to be found.