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Why Local Economies Matter
Around the world, there is a growing movement to pull back from the relentless march of corporate globalization by re-rooting economic and social activities at the community level. From the burgeoning popularity of farmers' markets and food co-ops to the revitalization of community banking, people are organizing themselves to reclaim the economy from large profit-driven corporations and instead build sustainable, local alternatives.
While the term ‘localization' has never gained popular currency (perhaps because it is so easily misunderstood), it is worth considering a broad definition for this trend towards small-scale, community-oriented businesses. In Localization: A Global Manifesto, Colin Hines defines localization as "a process which reverses the trend of globalization by discriminating in favor of the local". It is important to note, however, that this does not mean "walling off the outside world" through nationalistic protectionism (see Micahel Schuman, Going Local: Creating Self Reliant Communities in a Global Age). Nor does it mean creating communal autarky, with self-sufficient groups cutting themselves off from the monetary economy. International trade, travel and cultural exchange would continue, but locally-controlled, diversified economic activity would reorient production and service provision towards meeting the needs of the community first.
Why Localize?
Individuals and organizations who are already working to strengthen their communities and local economies are doing so for a multitude of reasons. This is not an ideologically driven movement that fundamentally rejects the global in favor of the local, nor is it based on one blueprint solution or economic model. Rather, it is an organic process motivated by a number of interrelated factors.
Economic globalization has gradually increased the power of multinational corporations and ‘too-big-to-fail' banks, not only over the means of production and distribution of goods and services, but also over the entire democratic and social process. In light of the recent financial crisis, where governments spent billions of taxpayer dollars on bailing out the banks that were partly responsible for causing the crisis, the overbearing influence of the corporate and financial services sector has never been clearer.
In response, people around the world are moving to reclaim local control over the economy through alternative business practices and banking. Campaigns such as Move Your Money aim to revitalize community banking so that finance is redirected towards local needs rather than speculative profits and bonuses. Alternative business structures such as cooperatives and community-supported agriculture also encourage local ownership and production, thereby closing the divide between owners and workers or producers and consumers upon which the corporate model thrives.
A growing awareness of the ecological impacts of a globalized, fossil-fuel dependent economy is also inspiring people to ‘go local'. With the twin specters of climate change and peak oil looming, people are recognizing an increasing need for localized production and distribution in order to build a viable alternative to the current environmentally destructive, export-driven model. Projects such as Transition Towns and Ecovillages are largely motivated by a belief that sustainable living requires resilient, diversified local economies. Many of the strategies adopted by these communities are not new; community gardens and local currency schemes, for example, have long been used to ensure local resilience.
For many people, the motivation to rebuild local economies goes beyond practical concerns about the unstable and unsustainable nature of the globalized economy. It is rooted in a deep dissatisfaction with the lifestyle and values promoted by a system obsessed with efficiency, competition and consumerism. Re-rooting economic activities at a local level offers a way to rebuild the community ties that have been eroded by a tendency towards competitive individualism in society. In the words of David Korten, author of Agenda for a New Economy: From Phantom Wealth to Real Wealth, the broader goal of a localized economy is to shift "its favored dynamic from competition to cooperation, and its primary purpose from growing the individual financial fortunes of the few to building living community wealth to secure the health and well-being of everyone."
Promoting Small-Scale on a Large-Scale
Currently, the shift towards the local remains a fringe, grassroots process, made up of small-scale initiatives as diverse as the cultures and environments in which they are taking place. As Helena Norberg-Hodge argues in her contribution to The Case against the Global Economy: And For a Turn Toward the Local, for these efforts to translate into a wholesale shift in the mainstream economy, they must be accompanied by policy changes at both the national and international level.
With politicians pandering to the interests of corporations in the never-ending pursuit of economic growth, policy support for local economies remains near to nonexistent. Many government policies, such as ensuring the availability of cheap fuel, liberalizing markets, subsidizing agribusiness and bailing out the big banks, essentially act as a form of corporate welfare in support of large-scale, profit-driven multinationals at the cost of small-scale community ventures. The same is true at the international level. Agreements under GATS and the World Trade Organization bar governments from discriminating in favor of the local, all in the name of free trade and the logic of economic competition.
Yet if economies are geared towards meeting local needs first, rather than becoming ever more efficient at producing goods for export-oriented trade on international markets, the logic of competition and ‘comparative advantage' flies out the window. The only question that remains is how to untangle government priorities that currently favor of big business and globalized finance, and to gain political and popular public support for a more diversified global economy geared toward localization. In order to build a new paradigm for development, one that empowers communities and works within the ecological limits of the planet, the rules of the game need to fundamentally change.
‘Going local' offers a way for people to push for transitional economic alternatives from the ground up, but individuals, communities and civil society must come together to form a powerful political movement demanding that the necessary shift toward local empowerment takes place through national and international policy measures. As multiple and interrelated global crises reveal the socially and environmentally destructive nature of the current globalized economy, the time for such a movement has never been more propitious - an opportunity that we all must make the most of.
Further Resources
Business Alliance for Local Living Economies
The New Rules Project - Institute for Local Self-Reliance
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13 Comments so far
Show AllAfter my company got taken over by a big corporation, I thought that I could quietly make a graceful exit and find a new company to work for. Unfortunately, transitions are never so smooth and I ended up angry as hell when I came back finding all of my coworkers either laid off or forced to work 12 hours a day. I would be given great pay for working 12 hours a day and bowing down to the know nothings in control but I refused and resigned in disgust. I went around seeking employment and getting interviewed by both small and large companies day after day. I already knew how to tell just how fair a large company would be to its employees and whether a small company would sustain or fold like a tent and surrender to takeovers. I will not say that all small businesses are the same. Some people who run small businesses do not have any serious intentions of going small or sustaining. If they are doing business with the government such as contracting to them or if their thinking is in line with those of those big corporate CEOs, chances are that their expectations are beyond reasonable and that those companies are doomed to fail. I know that most people seeking employment usually prepare themselves to answer the questions asked. Unfortunately, few of them take the time to actually question their interviewer to confirm that they will be comfortable working in that company. I had to go through 1-2 dozen small businesses that turned out to be so ready to concede to higher business authoritarians in nature before I could finally come across a couple of small companies that really wanted to be themselves. Well, I did get my new employment on Friday and the folks sound less conceding to big corporations in nature so I look forward to helping them sustain before they too fold. I also hope that what I learned about the beauty of going small but steady from other nations will help this new company be a role model so that other small businesses will look to us and decide to follow suit.
Good to know you have found, hopefully, satisfying employment. Wish you luck.
Great stuff, Anna!
Personally I'm not concerned - or expecting - that civil society will pick up the local bandwagon. They're not about to because civil society is by definition at present too large and complex. The danger is that we'll wait for them to do it. The change will be driven from the ground up, by people like those reading your column here at Common Dreams today.
We're so ready to wait for "them" to do it, for example to promote local on a grand scale. The reality I think is that it's up to us and that's at the core of the needed shift.
Andrew
www.RadicalRelocalization.com
I have been preaching "re-localization" for a decade! So refreshing and encouraging to see this essay and its responses. The real health of an economy depends on the small/independent merchant class. The analogy I use to describe the power of a small-business-based economy: think of it as a chainlink suit of armor. The interconnected chain links are like networks of small businesses that unite in protecting themselves against the spearheads of predatory-monopolistic-impersonal-corporatization. The nation's economy is a suit of chainlink made up of a 100 million interconnected, local, small enterprises; a predatory mega-corporation cannot pierce that strength. The consumer can thus easily become empowered by refusing to buy into the Walmarts/Crate&Barrel/Gap/Banana Republic/HomeDepot/etc---which are all anti-communityy, that is they destroy community and isolate citizens (which are nothing but consumers to them). Remember, dinosaurs are also very vulnerable to bacteria colonies.
Brazil and other countries in South America are turning to "economia solidaria" and it is improving their local communities' means of livelihood with the offshoot benefit of creating a renewed sense of empowered agency. Lula supports these efforts and has created a gov't ministry of Economia Solidaria. The creation of local economies has become the basis of strong grassroots democratic movements and councils with popular representation and high participation of those people living in the communities.
Quebec has Economie Sociale but Charest has only pretended to support it. He is a corporatist. Many people and communities have embraced it though and it has made a difference in many small and dying rural towns bringing back economic viability with new cooperatives.
Excellent article. One thing I would like to add for advice on choosing employment. From what JB wrote "I already knew how to tell just how fair a large company would be to its employees", one lesson I learned is to never ever trust large corporations, period. I would especially avoid the LLC companies ones as much as possible unless there is absolutely no choice. Those big corporations always find ways to make empty promises but the minute you are in, either you don't get a lot of what you were promised or there are sudden excuses the companies will invent to swindle and thwart their employees as much as possible. Those big corporations know that corporate accountability is rarely enforced even for the non-LLC corporations.
I wish everyone the best luck out there as this administration refuses to help small businesses just like the last one.
maxpayne and "Obama Loves WAR", great ideas. Thank you cassandra for the well wishes.
P.S.: max, I did test a few large companies out and they wouldn't even try negotiating. I held them to a much higher standard when I asked them questions of my own. Even where they supposedly promised to offer a little more than what their company's policy supposedly restricted, they were very hesitant. I was glad to get a good choice and as an added bonus, I now have to travel only 20 miles instead of 45 miles to work. Maybe someday, I will be lucky to find a small business closer to me that shares my ideas of standing up and not conceding to corporate takeovers.
Yes! Choose local, meaning locally owned businesses, small farms, local artisans.
Choose locally-owned restaurants--who get extra points because they also buy locally. Locally resourced is the current term used.
Locally-owned business are more likely to reflect community values because they are our friends and neighbors. They are more likely to use green prpducts, use sustainable practices, to treat employees well, and support the civic and cultural life of our communities.
This is not to say that some franchises and national chains located in our communities do not also contribute to our communities--but it is very much the choice of the on-site managers. If they feel they have to compete against the rising buy-local movement, they may begin to change their practices in a good way or increase their current contributions to the community.
Buying local helps people choose to run a business rather than work for someone else. When we buy from them, we help them live their dream. Buying local helps our local economy survive the economic downturns. Buying local supports the culture that is created by the local businesses, small farms, community organizations and artisans though the many events they host or sponsor.
There is no downside to buying local. And we do not need to get crazy and insist that anyone buy local 100% of the time. 80% is good enough.
We need information resources that make it easy for use to buy local. They should be free to the community. The resources should not be commodified--that is, we need sites that list all locally-owned businesses, not just those who pay a membership fee. We need sites that are not just a host for google ads.
Check out www.LokiLoka.com in Portland to see what a free online community resource supporting the culture created by the local economy looks like.
Going from predominately "too big to fail" to small and local means a lot economically speaking. True, not everything can be small and spread out but I suppose we could come up with a compromise to level the playing field. How about 60% small and 40% big for starters ? I'm sure we had a good mixture even in the Great Depression days. I understand that a few small business owners can give small business a bad rap but I would not trust the big guys in this economy.
"International trade, travel and cultural exchange would continue"
The people need an elaboration on that point, to counter the elite propaganda. The liberal elites insist that you cannot draw the line, for drawing any line would amount to totalitarian communist oppression.
The author is following a familiar but ineffective formula by neglecting this issue, avoiding confronting the elites and challenging their liberal extremist propaganda. The people need to confront the elites themselves out in public, and force them to debate.
So, where to draw the line, to make localism work? I would say rebuild our locally-owned small-scale production until the gini coefficient returns to something reasonable. In other words, starve the elites down into little prunes. The elites won't like it. Tough kaka for them.
After we draw the line then we can engage in global activities,and we'll know how to regulate ourselves, to keep our local production strong.
But as soon as the elites start re-building their rackets to exploit every human weakness that exists, we have to defend ourselves yet again, and put the elites under the lever and squeeeeeeeze them until the gini coefficient returns to a humane level, again.
Surprise surprise, it's only common sense.
Dafoe
Please define what you mean by "liberal elites" and just what is "their liberal extremist propaganda" ? Are you talking about the globalizing corporations that want free trade and go where the production costs are low, the agribusinesses that displace the local producer, for if you are they are no more liberal than big Ronnie and the shrubs.
You can do your part in drawing the line, don't buy stuff from overseas, which means doing without the latest gadgets, cheap food for you and your pets etc etc. You cannot do away with overseas trade but you can put in place controls such that it is beneficial to the nation. First put in place a political system that reacts to the needs of the nation and not to big business and the the neo-cons.