In addition to its role as facilitator, local govemment can act directly to establish and support institutions that serve as centers for capital accumulation. Absentee owners, unproductive activity, and distant govemment drain social surplus from communities rather than contribute to community development. Our approach promotes an expansion of public planning and grassroots initiatives to reinvest this surplus locally. Social Surplus and the Community Local economic analysis helps communities channel growth and development in ways that benefit their social, political and economic welfare. Social surplus is that amount left over from productive activity after inputs, machinery, and labor are paid for.
Profits are part of social surplus, but it is more than that.
The answer is not obvious. Given the nature of our global economy, much of the surplus is reinvested elsewhere and not captured to stimulate further economic development at the local level. In order to demonstrate what happens to social surplus at the level of the firm, we analyzed a typical McDonald's fast-food restaurant. As much as 77 percent of the surplus was drawn out of the community to corporate franchise owners and for services located elsewhere. If local communities can plug these leakages and encourage more recirculation of surplus locally, community economic development will be enhanced.