North Shore of Chattanooga a microcosm of local economy concept

The odor of books in a book shop such as Winder Binder in Chattanooga is enough to make people forget about buying or ordering books on the Internet.

“Living in North Shore is like living in Mayberry.”

— David Smotherman

David Smotherman is a longtime book lover who runs an art gallery and bookshop along the North Shore of the Tennessee River opposite Chattanooga’s chief tourist glory — the Tennessee aquarium.

As the fish glide about their glassy tanks in the main town, Mr. Smotherman eases up and down the aisles of his storefront, Winder Binder gallery and book store, stocking a variety of hard-to-find and rare books plus others of more popular title.

His life, as he recounts in an interview, reflects many of the best things about local economy that await our further exploration.

He has lived two decades above the shop he runs, and goes up and down the same creaky staircase several times a day. His shop has a strong odor of books, which we lament he can no longer detect, though many visitors remark what might be called a holy and historic aroma.

His life is not, he suggests, one that is small, oppressively provincial, narrow in scope and tight. He circulates among friends, knows many fellow shopkeeps and entrepreneurs, and seems providentially placed in the book business and in his spot on Frazier Avenue. Mr. Smotherman lives above 30,000 volumes which open upon all of reality and creation. Yet, in the pleasant confines of his locale, he knows and is known by many customers and friends.

In the poetry of belonging, he suggests, a confine is a mirror to the world at large.

Patronizing locally owned businesses brings a “premium” to the local economy.

Profit recirculates in Chattanooga

He brings up the idea of the big box store, with clear chagrin. “Once that profit’s made it’s not staying here; it’s being sent to wherever their headquarters is, or their stockholders, you know, where you’re not recycling that same money in your same [local] system. *** If you spend a dollar at a local store, 66 percent of it stays here.”

Money from wages to two part-time workers is circulated in the local economy, as might money from a corporate chain (Borders, Waldenbooks have disappeared from Chattanooga). Mr. Smotherman buys everything he can locally; he used to patronize privately owned Cooper’s office supply downtown. A used book shops is, by definition, a famous recycler. People who run local businesses, he points out, are open to giving money to local groups and charities, less likely to happen when the local manager of a chain cannot extend that grace without “calling corporate.”

“You’re getting personal service” by shopping locally, he says. There’s no evil in shopping on the Internet — he has done so. And he sells books online, too, with a specialty in rare and antique texts. “There’s a lot of extra service you get in dealing with someone locally,” because Winder Binder will help you locate a rare volume and provide other aid.

The Internet can be a great place if you know what you are doing. But scooting your body through the doorway of a shop ends in a tactile conquest.

“The Internet is cold and impersonal; you’re on you’re own. And you might get something of good quality, you might not. You can see and hold what you are about to buy” in a brick and mortar store — a great advantage, Mr. Smotherman says.

Mr. Smotherman is a wheeler dealer in his own currency. He issues “trade credit.” His printed trade chits, I propose, are a better store of value and more honest piece of privately circulating currency than the wildly popular American currency, the Federal Reserve Note. That banknote exudes a hint of dishonesty in your purse and smells of inflation. While U.S. currency is beautifully engraved and bear an official stamp, it lacks the health and life of Mr. Smotherman’s own works of art — paintings and such, on display in the gallery part of the business. He displays many local artists.

Buying local helps keep money in local economy

One of the points that emerge in the interview is some of the data from economic studies about local economy vs. national economy. Two are of interest, though not of recent issue. One is the 2004 Andersonville study of retail economics in a suburb of Chicago.

It finds that locally owned businesses generate a “premium” in what it calls “enhanced economic impact.”

➤ For every F$100 in consumer spending with a local outfit, F$68 remains in the local  economy.

➤ For every F$100 spent in a corporate chain store, F$43 remains in the local economy.

➤ A local store’s economic impact as measured in square feet of space is F$179.

➤ In contrast, as measured by square food usage, a chain store’s economic impact is F$105.

Public policy implication?

The study (downloadable at makes important points to people we’d call “policy makers.” That would include elected officials, bureaucrats on city payroll, trade and business groups and others whose work affects the retail sphere.

Localities and local government bring in big chains to keep up tax revenues, to avoid raising taxes on local people — a good and charitable motive, perhaps. But perhaps it would be better if our official “economic developers” could do more to get out of the way of local business and promote the internal economy.

Local merchants have greater economic impact than chain stores. If you replace local business with a chain store, you “reduce the overall vigor of the local economy,” according to the study.

The study says that aggregate effects of chain store may be greater than that of local stores, accounting for direct, indirect and induced economic activity. But aggregates mislead because chain stores have twice the room and take in twice the revenue.

For every F$100 a shopper buys at a chain, F$43 remains in the local economy. If that money goes to a locally owned outfit, that value jumps by 58 percent to F$68. As measured by square feet, local economic impact is F$105 for purchases at a chain.But if a local business occupies the space, impact jumps by 70 percent, to F$179.


Civic Economics. This group is an economic analysis and strategic planning consultancy with offices in Austin and Chicago. Since its founding in 2002, the firm has established itself as a leader in progressive economic development, taking its unique vision of sustainable prosperity across the U.S. and Mexico. Learn more about “The Civic Economics of Retail” by visiting

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