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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

Go Local - Yes! Magazine

The E. F. Schumacher Society

Move Your Money

The New Rules Project - Institute for Local Self-Reliance

Transition Culture


This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

Anna White

Anna White is the editorial assistant at Share The World's Resources.
She can be contacted at anna(at)stwr.org.

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