PEOPLE’S ECONOMICS:
5 Localisation – coming soon wherever you are
ANDREW SIMMS, CAROLINE LUCAS AND MIKE WOODIN
I sympathise therefore, with those who would minimise, rather than those who would maximise, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national.
J.M. Keynes
FROM THE ANODYNE supermarket aisles of Britain’s biggest shops to the embattled villages of Mexico’s revolutionary Chiapas region, everybody wants more of the same thing – local stuff.
Whether it’s food in Britain, where the latest consumer survey shows that after stable prices and a few special promotions, the thing most busy consumers want is more locally produced food; or whether it’s local control, which to the Zapatistas of Chiapas means not ‘independence, dropping-out or isolation’ but ‘control of their own destinies’ - the big term climbing the buzzword popularity ladder is ‘localisation’.
However, it is a concept that has been questioned and criticised from both left and right. An attack from the right is more understandable, but when it comes from the left, then it is rather surprising. For example, George Monbiot, in his new book The Age of Consent, makes the case that, since economic globalisation is inevitable, we should direct our efforts not at reversing it, but at ensuring that democratic globalisation keeps pace with it; reform will only be possible once the global institutions that regulate the global economy are fully democratic. From this perspective, localism becomes a self-defeating distraction: “In the absence of an effective global politics … local solutions will always be undermined by communities of interest which do not share our vision. We might, for example, manage to persuade the people of the street in which we live to give up their cars in the hope of preventing climate change, but unless everyone, in all communities, either shares our politics or is bound by the same rules, we simply open new road space into which the neighbouring communities can expand.”.
This line of reasoning draws Monbiot to the conclusion that, by first rebuilding the global politics, we establish the political space in which our local alternatives can flourish. Accordingly, he proposes to remedy the democratic deficit that lies at the heart of the global institutions largely by relying on the ‘moral authority’ of a new democratically elected world parliament to call them to account. In similar vein, the fairness of trade and the good conduct of private corporations are to be guaranteed at the global level through the agency of a Fair Trade Organisation.
Proposals that world trade rules should be fair and that global institutions should be genuinely democratic are of course, right and naturally, we agree with them. However, it is in our view both unnecessarily restrictive and also wrong to believe that action at the global level alone will be rapid and successful enough to justify postponing local action until after that success. Action at the local level will of course be reinforced if it is supported by global agreements.
Nevertheless, to return to the enlightened car-free residents: given sufficient democratic empowerment at the local level their street need not simply become new road space for the neighbouring communities to occupy. The residents could, for example, persuade their local council to close their street to through-traffic and turn it into a home-zone, creating space for children to play and trees to grow.
Of course, one car-free street will not prevent climate change, but the children who live in it will have more fun and less asthma, the residents will gain a pleasant shared space in which to get to know each other, and their local shops and bus services will benefit. Crucially, it will set an inspiring example for others to follow – one that might even spread sufficiently for the rate of growth of transport-related greenhouse gas emissions to be slowed in advance of the global treaty that finally combats climate change. It would be unduly restrictive to prevent the residents from reclaiming their street until after that treaty had been ratified – that, metaphorically, is what opponents of localisation seek to do.
Equally, to rely on creating truly democratic global institutions as the only defence against the injustices of economic globalisation demonstrates extraordinarily courageous optimism in the face of all available experience. It relies on the assumption that there is nothing inherent in the nature of global negotiations and the institutions they create to dictate that they should have been so comprehensively captured by the dominant economic interests – it has just turned out that way so far, and could equally turn out different in the future. This assumption might be valid, but it is not one we would choose to make. Such is the diversity of human society and the global environment on which it depends that truly representative democracy, let alone the participative variety, can only work very imperfectly at a global level. It is therefore no accident for example that the one-size-fits-all rules of the IMF and WTO ride roughshod over the world’s intricate pattern of cultural and economic variations, just as thoroughly as the economic activities they propagate trample its fragile eco-systems.
GEORGE MONBIOT’S PROPOSAL for a global parliament illustrates the difficulties of operating democratically at the global level. Rightly, he suggests that people, rather than states, should be represented in the parliament, which should not become too large to operate efficiently. The world is therefore to be divided into 600 constituencies, each containing 10 million voters who elect a single member of the parliament. Two problems immediately become apparent. Firstly, one person cannot accurately represent the diversity of opinions and interests of 10 million people and, secondly, the 600 members of the parliament would be easy targets for corporate lobbyists. These problems do not rule out the proposal, but they certainly caution against expecting too much of it.
Nevertheless, Monbiot has high hopes for the influence the parliament would have over the global institutions and world leaders. He asserts, “We have every reason to believe that, if properly constituted, our parliament, as the only body with a claim to represent the people of the world, would force them to respond.” Regrettably, recent history does not bear out such optimism. The European Parliament, for example, is the only body that can claim to represent the people of the European Union (EU), yet it hardly has a distinguished track record of ‘forcing’ European leaders to respond in those areas of EU policy where it has only its moral authority to rely on.
Localisation is not autarchy, which as a concept is rarely advanced with any seriousness; it ceased to be a realistic option many centuries ago. But achieving greater self-determination by relying less on markets over which one has little control is a central goal of localisation. Equally, localisation contends that democratising the global institutions is indeed urgent and necessary, but there is much that could be done more locally to right the wrongs of economic globalisation in advance of the dawning of the age of perfect global democracy.
This is not an argument against maintaining a multilateral approach to international trade or for abandoning any attempt to improve the democratic health of global society. Contrary to Monbiot’s assertion, advocates of localisation do not propose withdrawal from the international stage, but they do recognise that, no matter how much it is improved, global society will never reflect the full diversity of its component parts as successfully as national or local society can. Global democracy should therefore only be relied upon to solve those problems that cannot be better resolved more locally, such as the equitable allocation of the right to emit greenhouse gases.
Except in a small minority of cases, the fair distribution of goods is not one such problem. There are only a very few goods, such as climate-specific agricultural products and rare mineral resources, that can only be sourced from a few geographically specific locations. Thus, a major advantage of localisation is that it will shift the balance of economic control towards a level where democratic institutions enjoy greater prospects of imposing socially and environmentally sensitive regulations on the market. It would also allow economic blocs like the EU, which are powerful enough to stand up to the corporate interests that drive globalisation, to take the lead in progressing such regulations in advance of global consensus.
THE ALLEGED ‘BENEFITS’ of export-led growth also need to be considered more closely, since developing countries’ real export earnings are likely to be disappointing when compared with projections that ignore a range of hidden costs. In most developing countries, production for export is more intensive than production for local consumption. It typically benefits big ‘middle-men’ and transnational corporations (TNCs) rather than small local producers who are more likely to reinvest profit in the local economy, and diverts resources away from meeting local need. The habitat destruction that accompanies hardwood production is one dramatic example of the hidden costs that can be imposed by export production.
Moreover, the potential economic damage to developing countries from aggressive South-South competition has been vastly underestimated, if not completely overlooked. The more dependent a developing country becomes on exports, the more exposed it will be to competition for access to the newly opened Northern markets from other Southern exporters. China, for example, is predicted to capture between 50 per cent and 100 per cent of world textile exports, undercutting the poorly paid women who work in Bangladesh’s garment factories.
It is clear that international trade isn’t working for the world’s poorest people, yet too often critics of globalisation are dismissed as the comfortable and complacent children of the rich. In Johannesburg in August 2002, at the tenth anniversary of the Earth Summit, the New Economics Foundation, (NEF) organised a parallel conference attended by civil society groups from forty-three countries. It was part of the ‘People’s Earth Summit.’ The largest contingent of participants was from Africa, followed by a mixture of people and organisations from Europe to South Asia, North America, Latin America and a number of small island states.
Those present made a number of proposals that shared as a common theme: “The idea that we must move away from the current model of globalisation, dominated by the finance sector, and move towards a genuinely internationalist agenda.” Most important of all was what lay at the heart of that agenda. It was: “The rights of local communities to determine their economic path and protect their cultural and environmental heritage.” Their voices are a cold shower for critics who find it comfortable to believe that anyone opposed to globalisation is already rich and merely ‘anti-development’.
Trade economist Dani Rodrik observes that some of the best orthodox economic success stories from the majority world contradict the globalisation mantra about economic liberalisation: “Economic development often requires unconventional strategies that fit awkwardly with the ideology of free trade and free capital flows.” South Korea, China and Taiwan, he points out, made extensive use of pro-local policies such as import quotas, local-content requirements, patent infringements, export subsidies and regulating capital flows– all of which are currently either prohibited by the WTO or frowned upon by the IMF.
LOCALISM GOES FURTHER than rehabilitating old development models that, even if successful on certain terms, have fallen from favour. There are exciting innovations that could point the way forward to fundamentally different models for local and international trade. Amidst the global economic chaos, we are witnessing the death of the assumption that all economic activity logically floats up to the global level. Instead notions of ‘subsidiarity’ or the ‘proximity principle’ are becoming more popular for their ability to promote diversity, return economic activity to a human scale and distribute its benefits more equally, and to help us work within environmental limits. They represent a planned internationalism where we do things at the lowest appropriate level – which, depending on the activity could mean in your neighbourhood, your town or globally.
A pioneering example of how localism can work in an international context is offered by the Just Share scheme in Nilgiri, India. A scheme that started as a campaign to win land rights for tribal people has grown into a model of economic co-operation between marginalised communities in different continents, and shows how commodities that cannot be grown locally can be traded directly between producers and consumers in a way that cuts out exploitation.
The community of Nilgiri started selling their tea in a fair trade scheme, partly to sidestep the tea barons who, they suspected, would take the biggest share of any profit. But then they saw a weakness: they were charging a fair trade premium price to people who they considered as their friends, and they wanted to be able to sell their tea to deprived communities in the UK, at the lowest possible price so that both communities could benefit.
So they linked directly with community co-operatives in Britain. By ‘internalising’ the production chain within such groups, they have managed to prevent extra value being extracted by middle-men and other profit-hungry retail and production companies. The founders of the scheme suggest that this model could be extended to other crops that have to be traded internationally, and that could, one day, even be traded between communities in their own currency, further preventing the leakage of wealth.
Critics may say that by focusing on the ‘local’, people are turning their backs on the world and pulling up the ladder of economic development from poor countries. But that would be fundamentally to misunderstand both the proposals of localism’s advocates, and what is happening in the increasingly shaky global economy. Localisation is not an absolute, but a dynamic process. Instead of encouraging the economics of large and remote organisations, it promotes an economics of nearness and human-scale, in which people have more control over their lives. It is part of a new economics relevant locally and globally. It has common themes everywhere, but will look different wherever it grows. It is internationalism with local people more in control. •
Action: If you want to support localism get your MP to back the cross-party Local Communities Sustainability Bill.
Andrew Simms is policy director of the New Economics Foundation. Caroline Lucas is Green MEP for SE England and Mike Woodin is Principal Speaker for the Green Party. Woodin and Lucas are co-authors of Green Alternatives to Globalisation: A Manifesto, published by Pluto in spring 2004.
—published in Resurgence No. 222 — January/February 2004