Amerika

Localisation: The Post-Seattle Alternative To Globalisation

Colin Hines

 

There’s so much that’s wrong with today’s global economy. But there’s so much that can be put right. To rephrase Margaret Thatcher: there IS an alternative.

The bad ship ‘Globalisation’ is drifting like a supertanker with the control room under siege from pirates. Its momentum was slowed significantly by the ‘Battle of Seattle’ in December 1999, where delegates from developing countries and street protestors successfully opposed the WTO’s proposed further acceleration of trade liberalisation – the so called ‘Millennium Round’. The supertanker’s safe passage is now being threatened by two very deep icebergs coming towards it in a pincer movement. Of course no-one can predict their precise effect on the ship, but both have already caused it to slow down. The twin pincers are the instability of the world trading system and the growing international resistance to the effect of being caught in this huge vessel’s damaging wake. Despite these threats to globalisarion, ‘serious’ commentators still sagely nod their heads in unison to the wonder or at least the inevitability of its direction and eventual success.

Not surprisingly, such fatalism grips most politicians, concerned as they are with the day to day juggling of the status quo. Less understandable is that far too many concerned citizens and organisations working for a fairer world also seem to have been bamboozled into accepting globalisation and its twin, international competitiveness, as inevitable. Yet these are not Godgiven. Indeed the briefest perusal of the Bible’s Ten Commandments reveals that there is not a single Commandment saying, ‘Thou shalt be internationally competitive’. It’s a modern construct, elevated to a theology.

What is required is for the politically active to undergo a mind-wrench away from acquiescence to the new theology of globalisation towards considering the possibility of its replacement with a localism that protects and rebuilds local economies worldwide. This mind-wrench requires courage, almost of the order of an economic ‘coming out’, in order to reject the orthodoxy’s ceaseless mantra of the need for international competitiveness. It needs to challenge head-on this constant reiteration by a self-serving priesthood of mainstream economists, commentators and the new ‘masters of the universe’ — big business leaders and international financiers.

The global commandment that every nation must contort its economy to out-compete every other country is an economic, social and environmental nonsense. It is a beggar-your-neighbour act of economic warfare. There have to be losers, because no matter how much a specific market may be growing, if its needs can be supplied by a competing range of outside sources, then large numbers, often the domestic producers, have to lose.

The alternative, ‘Localisation’, insists that everything that could be produced within a nation or region should be. Long-distance trade is then reduced to supplying what could not come from within one country or geographical grouping of countries. This would allow an increase in local control of the economy and the potential for its fruits to be shared more fairly, locally. Information and sustainable technology would be encouraged to flow, when and where it can strengthen local economies. Under these circumstances, beggar-your-neighbour globalisation would give way to the potentially more cooperative better-your-neighbour localisation.

Localisation is not against rules for trade. It simply wants them to have a different end goal: protecting and re-diversifying local economies, rather than forcing all nations to bow the knee to the false god of international competitiveness.

 

A Wake up call for the politically active

What we have at present is an array of largely futile efforts by political activists, from trades unionists to development NGOs, to tame globalisation. Campaigns for ‘labour standards’ or ‘fair trade’ or ‘voluntary ethical codes’ fundamentally mistake the nature of the trade liberalisation beast. These attempts are like trying to lasso a tiger with cotton. It is now time to return this tiger to its original habitat. Trade was initially a search for the novel; Europeans went to India for spices and other exotics, not coal. That is precisely the Localisation approach, but without the former’s disastrous social effects. Long-distance trade is only for acquiring what cannot be provided within the region where people live. The rules for this diminished international sector then become those of the ‘fair trade’ movement, where preference is given to goods supplied in a way that benefits workers, the local community and the environment.

The politically active need to demand a new direction and end goal for trade rules. The latter must contribute to the rebuilding and protection of local sustainable economies. In the process the myriad goals of movements for social and animal welfare, development, human and labour rights and environmental protection are much more likely to be met.

 

Bringing about the change in direction

To bring about this change it is crucial to play the globalisers at their own game. They have a clear end goal: maximum trade and money flows for maximum profit. From this end goal comes a clear set of policies and trade rules supporting this approach. Those seeking a more just, secure, environmentally sustainable future need to have their own clear end goal and policies for achieving it. This will require the mind-wrench mentioned above, away from mostly concentrating on opposing globalisation towards considering the detailed policy route to its alternative — Localisation.

The policies bringing about Localisation are ones that increase control of the economy by communities and nation states. The result should be an increase in community cohesion, a reduction in poverty and inequality and an improvement in livelihoods, social infrastructure and environmental protection, and hence an increase in the all important sense of security.

Localisation would not require a return to overpowering state control, merely the provision by governments of a policy and economic framework which allows people, community groups and businesses to re-diversify their own local economies.

 

A programme for Localisation

Protective safeguards, such as import and export controls, quotas, subsidies etc, will need to be introduced over a clearly agreed transition period to all continents. This will not be old-style protectionism which seeks to protect a home market whilst expecting others to remain open. The emphasis will be on local trade. Any residual long-distance trade will be geared to funding the diversification of local economies. Such a dramatic, radical change will need to overcome TNC opposition and so will need to take place at the level of regional groupings of countries, especially the most powerful — in Europe and North America.

Localising production and controlling TNCs

Industry and services will be localised by site-here-to-sell-here policies to ensure localised production. Threats by TNCs to relocate therefore become less plausible. Once TNCs are thus grounded, their domestic activities and the levels of taxation they pay are back under democratic control. Campaigners’ demands for social, labour and environmental standards also become feasible.

Localising money

The disastrous effects of the unfettered international flow of money has led to global calls for some controls to be reintroduced. What is required is a re-grounding of money to remain predominantly in the locality or country of origin to fund the rebuilding of diverse, sustainable local economies. Measures to achieve this include controls on capital flows, Tobin-type taxes, control of tax evasion, including through offshore banking centres, the floating of civic bonds and the rejuvenation of locally orientated banks, credit unions and LETS schemes. Public and private flows of money to other countries must also be directed to strengthen the local economies of the countries concerned.

A localist competition policy

Local competition policies will ensure that high quality goods and services are provided by ensuring a more level, but more local, playing field. Free of the ‘race-to-the-bottom’ competitive pressures from foreign competition, business can be carried out within the framework of ever-improving labour, social and environmental regulations, enhanced by the best ideas and technologies from around the world. Government competition policy will cover the structure and market share of businesses, and regulate the behaviour of firms.

Taxes for Localisation

To pay for the transition to Localisation and to improve the environment, the majority of taxation will come from gradually increasing resource taxes, such as on non-renewable energy use and pollution. To promote a more equitable society, the removal of the option of relocation or the availability of foreign tax havens will make it possible to tax companies and individuals according to their wealth, their income, their spending through value added tax and their land. Part of this taxation will be used to compensate the poorer sections of society for any price rises and by shifting taxes away from employment to encourage more jobs.

Democratic localism

A diverse local economy requires the active democracy of everyday involvement in producing the maximum range of goods and services close to the point of consumption. To ensure the broadest distribution of the ensuing benefits will simultaneously require wider, political, democratic and economic control at a local level. A Citizen’s Income will allow involvement in the economy as a matter of right. Political funding will be strictly constrained and power will pass from the corporations to the citizens. This will involve the encouragement of maximum participation in defining priorities and planning local economic, social and environmental initiatives, which will require a balance of involvement of the state, community networks and organisations and citizen’s movements.

Trade and aid for Localisation

The GATT rules at present administered by the WTO should be revised fundamentally to become a General Agreement for Sustainable Trade (GAST), administered by a democratic World Localisation Organisation (WLO). Their remit would be to ensure that regional trade and international aid policies and flows, information and technological transfer, as well as the residual international investment and trade, should incorporate rules geared to the building up of sustainable local economies. The goal should be to foster maximum employment through a substantial increase in sustainable, regional self-reliance.

Localising food security

Globalisation is increasing control of the world’s food system by transnational corporations (TNCs) and big farmers. There is a backlash from both consumers and farmers to this process that provides less safe food, environmental threats and rural impoverishment. Localisation can reverse this trend. Food security both for rich and poor countries requires an increase in the level of self-sufficiency. Also needed is a dramatic reduction in international trade in foodstuffs until the commerce left becomes a useful adjunct to increased self-reliance. This should be governed by fair trade rules benefiting small farmers and food producers, animal welfare and the environment. Land reform and the rebuilding of rural economies is an integral part of such food localisation.

Finally Localisation is not about trying to put the clock back. Globalisation is doing that as it reduces the security, basic needs provision and employment prospects for billions for whom lives had been improving since the Second World War. The ‘Protect the Local, Globally’ policies of Localisation could return us to a path that advances the interests of the majority and doesn’t mire them in cruel insecurity. It is not against trade, it just wants trade where possible to be local. The shorter the gap between producer and consumer, the better the chance for the latter to control the former. Adverse environmental effects are more likely to be experienced through long-distance trade and lack of consumer control over distant producers. Local trade should significantly lessen these problems and make possible the tighter regulation required.

Now could this come about?

The growing widespread resistance to globalisation can be built upon to help fashion a viable localist alternative. There are already countless people and groups strengthening their local economies from the grassroots up. The greatest spur to consideration of such radical local alternatives at the governmental level will be the need to respond to global economic upheavals and the deflation, the job losses and inadequate consumer demand that will come in its wake. Equally crucial in shaping a different localist imperative amongst politicians will be the pressure that the politically active can bring to bear. This must shift from just fighting separate issue-specific aspects of globalisation to realising that their individual successes can only be secured as part of an overarching change to localisation, but in an internationally supportive manner. In short, to ‘Protect the Local, Globally’.

Localise internationally

Development professionals’ calls for a ‘fairer’ liberalised trading system ignore the reality of what the rules of trade liberalisation have done to the poor in the South. Development NGO’s adherence to the paradigm that exports from the South to the North are a major means to achieve development for the poor is flawed. Southern critics of this approach point to the inevitability of adverse competition between poor exporting countries, its hijacking of national priorities to the provision of the cheapest exports, the adverse working conditions arising, and country-hopping demanded by the companies involved. Instead they propose the alternative of a localist development policy.

Development agencies and NGOs must recognise these facts and make their policies and campaigns more effective by putting them within an overarching and internationalist Localisation context. Thus campaigns against the World Bank, the IMF, and the WTO must recognise that it is not the actual institutions or the people working in them that are the problem. Rather it is the end goal of their activities and policies. What must be challenged up-front is the fact that the policies of these institutions are geared to the continued contortion and distortion of every country’s economy in order to prioritise international competitiveness and obey the diktats of globalisation.

Were trade and aid rules and debt forgiveness geared to the radically different end-goal of protecting and rebuilding local communities globally, then such dramatically altered institutions could potentially play a useful part in the necessary transition of saving the world from globalisation.

Just as the last century saw the battle between the left and the right, what needs to become the big battle of this century must be an alliance of localists, red-greens and small ‘c’ conservatives pushing a localist agenda, defeating the doomed globalists of the political centre. So, with apologies to Karl Marx and Margaret Thatcher, the rallying cry should be: ‘Localists of the World Unite — There is an Alternative’.

Colin Hines’ latest book: Localization — A Global Manifesto was published in Summer 2000 by Earthscan ([pound]10.99).

[The Ecologist, September, 2000]

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