Consider a single (physical) twenty dollar bill. If it enters a small town (remote worker for FAANG withdraws it out of an ATM) and then immediately leaves (from the Walmart till onto an armored truck to the local city center), that's $20 in economic activity.
If it passes between five hands locally before it ends up on that truck, that's $100 of economic activity, five times as many opportunities for people to exchange what they have for what they want.
This is a toy model, there are a ton of things wrong with it, but it does illustrate a real point. In the six-hands scenario, more of the residents are offering goods and services to each other, in the two-hands scenario, everything is being provided to and by the larger economy. Less resilient, less locally-scaled, and it's easier to replace the small town with any other set of producer/consumers who offer lower prices or thinner wages.
Consider a single (physical) twenty dollar bill. If it enters a small town (remote worker for FAANG withdraws it out of an ATM) and then immediately leaves (from the Walmart till onto an armored truck to the local city center), that's $20 in economic activity.
If it passes between five hands locally before it ends up on that truck, that's $100 of economic activity, five times as many opportunities for people to exchange what they have for what they want.
This is a toy model, there are a ton of things wrong with it, but it does illustrate a real point. In the six-hands scenario, more of the residents are offering goods and services to each other, in the two-hands scenario, everything is being provided to and by the larger economy. Less resilient, less locally-scaled, and it's easier to replace the small town with any other set of producer/consumers who offer lower prices or thinner wages.