Localization: The Economics of Happiness

Boy in garden

Credit: Becky White (localfutures.org)

The Occupy movement has transformed our political culture in profound ways. New forms of struggle seem possible now that thousands have braved winter chill, rubber bullets, and pepper spray to voice their dissent. And the struggle has gained newfound public legitimacy: according to polls, a majority of Americans remain firm in their support for the issues Occupy has brought to the fore.

With this widespread support, there is now a rare opportunity to promote fundamental change toward a better economic future. The Occupy movement has managed to highlight the social and environmental effects of corporate rule. It is now time to examine how transnational corporations and banks have become so powerful and how they have been able to capture our governments.

For the past thirty-five years, I have worked with economists, environmentalists, and social activists to study the impact of trade agreements around the world. It has become clear to us that “economic globalization”—the deregulation of trade and finance—has led to a rapid and unprecedented expansion in the power and influence of transnational corporations. In the name of freedom and free trade, constraints on global businesses and banks have been removed, creating an interlinked global empire that has turned our elected representatives into corporate servants. From Sweden to Slovenia, from the United States to South Africa, the picture is frighteningly similar. During election campaigns, political representatives from left to right speak our language; once in power, they implement policies that serve the needs of global capital, rather than the needs of the people.

Shipping containers

Trade deregulation has let transnational corporations run wild. Community gardens and farmers markets offer a glimpse of an alternative system. Will Occupy open new paths to economic localization? Creative Commons/WirralWater

Until quite recently, trade deregulation was a subject that lay beneath most of the public’s radar. Today, however, even market fundamentalists have had to concede that the deregulation of trade and finance led to increasingly reckless speculation and ultimately to a near meltdown of the global financial system. I’m very hopeful that people will soon recognize that deregulation—the core of economic and corporate globalization—is also the single biggest contributor to most of the other major crises of our time, from unemployment to climate change, ethnic conflict to the epidemic of depression.

For decades, deregulation in the name of globalization was presented as a way of bringing the people of the world together. It was seen as the only way toward progress and as an almost evolutionary process.{{{subscriber|2.00}}} [trackrt] Bill Clinton, one of the foremost promoters of trade deregulation in the 1990s, said, “Globalization is not something we can hold off or turn off.… It is the economic equivalent of a force of nature.” Yet, over the years, more and more people have realized that this is simply not true. The global economy is structured the way it is because of policy choices. In thrall to outdated economic theory, governments are making massive investments in trade-based infrastructures, signing onto trade treaties that open their economies to outside investment, and scrapping laws and regulations designed to protect national and local businesses, jobs, and resources. In the process, national sovereignty has been relinquished to giant transnational corporations and undemocratic supranational bodies like the World Trade Organization (WTO) and the Bank of International Settlements (BIS).

Support for international trade has given global players an unfair advantage over local producers and businesses. Long-distance transport networks, for example, make it possible for huge agribusinesses and corporate marketers to deliver their products worldwide, helping them absorb the markets of businesses selling locally produced goods. Publicly funded global communications networks are of little use to the local family farmer or the local bank, but they enable transnational corporations to wield centralized control over their widely dispersed activities and to transfer capital around the world at the stroke of a computer key. The result of these policies has been an explosive growth in international trade of both goods and toxic debt. Whole economies are becoming dependent on global trade, and virtually every sphere of life is being affected.

The impact on food—one of the only products that people everywhere need on a daily basis—is particularly revealing. As Steven Gorelick and I discuss in our book, Bringing the Food Economy Home (Kumarian Press, 2002), in most of the industrialized world, the average plate of food travels thousands of miles before reaching the dinner table. Today, one can find apples from New Zealand in apple-growing regions of Europe and North America; kiwis from California, in turn, have invaded the shops of New Zealand. In Mongolia, a country with ten times as many milk-producing animals as people, shops carry more European dairy products than local ones. Just as absurd, many countries import and export virtually identical products. According to the last publicly available trade statistics from the Food and Agriculture Association (FAO), the United States imports more than 100,000 tons each of milk, beef, potatoes, and other staple foods each year, then turns around and exports roughly the same amount.

It’s not just food, either. Because taxes, subsidies, and regulations are skewed to favor global trade over local trade, corporations take advantage of the situation and routinely transport manufactured goods across the world and back again. In China, for example, production for domestic consumption is subject to sales tax. This has led producers to evade this tax by exporting their goods, then “re-importing” the same products labeled as originating from abroad. In an era of impending climate chaos, wasting fossil fuel in these ways is nothing short of madness.

One of the most destructive effects of globalization is that it eliminates diversity. In order to grow and to provide the “economies of scale” that huge transnational corporations require, whole populations are induced to want the same consumer goods. Diets worldwide are homogenized so that a narrowed range of global commodities can be grown on mega-farms. In this way, the global economy systematically replaces cultural, biological, and agricultural diversity with monoculture. Since the very existence and functioning of the biosphere depends upon diversity, it seems clear that continued globalization threatens to undermine the basis for life itself.

By providing a focus for people’s frustration, Occupy has put the issue of corporate control at center stage. But only with an understanding of how our governments have been captured by corporations and banks will there be enough pressure to reverse the process. One thing is clear: as individuals, as communities, and even as nation states, we will have very limited power so long as the economy continues to be controlled by transnational corporate interests.

Environmentalists have long warned of the dangers of pollution, the extinction crisis, and impending climate disaster. Social justice activists, meanwhile, have focused on inequality and the roots of conflict. Now is the time to bridge divides—to make the essential links between the movements for ecological, economic, and social change—because the shifts that are needed to save the planet are the same as those that will increase employment and shrink the gap between rich and poor. These policy changes would also enable us to better meet our need for community and a sense of belonging, thus lessening the tensions that lead to conflict both at home and abroad.

In order to turn things around, we need to force our political representatives back to the negotiating tables, this time to revoke the agreements that slashed the rights of both nature and the 99 percent while handing unprecedented power to a small number of unaccountable institutions. Revised international agreements would no longer provide greater freedom for huge global monopolies but would instead protect the environment and human rights.

The goal of these policy shifts would be to set a course for a greater localization or decentralization of the economy—in other words, taxes, subsidies, and regulations would be shifted away from encouraging production for export toward production for local and national needs. Regulations would ensure that businesses were place-based or “localized,” making them more transparent and accountable. Localization doesn’t mean eliminating all trade or adopting an isolationist attitude—it simply means shortening the distances between consumers and producers wherever possible. It would aim to reduce unnecessary transport while encouraging changes to strengthen and diversify economies at the community and national levels. The type of goods produced and the amount of trade would naturally vary from region to region.

Economic localization means supporting local economies and communities rather than huge, distant corporations and banks. Instead of a global economy based on sweatshops in the global South, stressed-out two-earner families in the global North, and a handful of billionaire elites worldwide, localization means a smaller gap between rich and poor. It also means closer contact between producers and consumers, which translates into greater social cohesion. A few years ago, a team of sociologists followed shoppers around and found that those at farmers markets had ten times more conversations than those at supermarkets.

Economic localization has been described as the economics of happiness. This is because it replaces our dependence on distant bureaucracies and corporations with human-scale interdependence. This is the structural path to rebuilding community, a key ingredient in happiness. Almost universally, research confirms that feeling connected to others is a fundamental human need. Local, community-based economies are particularly crucial for the well-being of our children, providing them with living role models and a healthy sense of identity. Recent childhood development research demonstrates the importance, in the early years of life, of learning about who we are in relation to parents, siblings, and the larger community. These are real role models, unlike the artificial stereotypes found in the media.

Changing the trajectory of our economic system can seem exceedingly difficult but—in the context of climate change, extinction of species, and mass social unrest—continuing on our current globalizing path is impossible. Meanwhile, efforts to localize economies are already happening at the grassroots level all over the world. In Detroit, one of America’s most blighted cities, there are now more than 2,000 community gardens, each one bringing with it a sense of connection to others and to the earth. A young man who founded one of these urban gardens told me: “I’ve lived in this community over thirty-five years, and people I’d never met came up and talked to me when we started this project. We found that it reconnects us with the people around us. It makes community a reality.” Another young gardener in Detroit put it this way: “Everything just feels better to people when there is something growing.”

In hundreds of communities, grassroots initiatives also aim to save local, independent businesses. The Business Alliance for Local Living Economies (BALLE) is a hub for many of these efforts. Its mission is to catalyze and connect local business networks and to strengthen these networks. BALLE comprises more than eighty community alliances in the United States and Canada and represents more than 22,000 small businesses. Members of the network support economies that are controlled locally to the greatest extent possible while sustaining the communities and ecosystems in which they are embedded.

Banking and finance are also the focus of localization efforts. Anger over the bank bailouts has led millions of people to pull their money out of big banks in favor of small, local banks and credit unions. After Bank of America announced a new debit card fee this year, a Move Your Money campaign led more than 650,000 people in a single month to abandon the banking giant and join credit unions.

Through small projects worldwide, the localization movement is demonstrating that it is possible to reduce our ecological footprint while at the same time increasing both productivity and employment. It is extremely inspiring—and all the more so when one realizes that these initiatives are taking root without help from government or the media. Imagine how powerful the movement could be with the support of even a fraction of our tax dollars!

Despite the fact that most of the North American Occupy camps have now been cleared away, the movement carries on. Community bonds have been forged and commonalities have been found despite our differences. The Occupy movement is a heartening sign that we are ready for a shift toward an economy of renewal, sustainability, and happiness. The choice is now ours. Let us join together—across the social, economic, and environmental divides—and work for localization on a global scale.


(To return to the Spring 2012 Table of Contents, click here.)



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