To kick off our “Lessons from Lockdown” series, we’re going to start with the understanding of a key root cause to most, if not all, of our pre-existing problems. And the good news is this: they are all solvable, when we unite in Solidarity to cooperate.
Please join us for a fascinating and enlightening, pro-active and participatory conversation with Anja Lyngbaek of Local Futures
Live: Saturday, February 13, 2021 at 2 pm ET. Sign up here
Interactive: About 30 to 45 minutes post live webcast.
Did you know?
Poverty, climate change, the breakdown of democracy, an epidemic of depression – the world is facing a convergence of crises.
The cause? Economic globalization
Economic localization offers multi-faceted solutions to the problems created by globalization.
In our learning guide on globalization, we sketched the outlines of the current economic system, in which corporations rule and people are increasingly deprived of the deep connections with community and with nature that they need to thrive.
Now, let’s imagine a very different world, one in which most of your food comes from nearby farmers who are part of your community and who ensure food security year round. Imagine children being free to play and explore their world safely under the watch of neighbors who you know and trust. Imagine the money you spend on everyday goods continuing to recirculate in the local economy, building community wealth along the way. Imagine local businesses multiplying and providing ample, meaningful employment opportunities, instead of your hard-earned cash being immediately siphoned off to some distant corporate headquarters. Economic localization can make these visions a reality for all.
In this learning guide, we’ll cover what economic localization is and why it’s so beneficial for human, societal, and ecological wellbeing.
What is Economic Localization?
Ultimately, economic localization is about re-scaling the economy back to a human level. It is the process of building economic structures which allow the goods and services a community needs to be produced locally and regionally whenever possible. Localizing economies can strengthen community cohesion and lead to greater human health and material wellbeing, all while reducing pollution and degradation of the natural world.
From community gardens to credit unions, from alternative learning spaces to small business alliances and co-ops, local economies create networks of place-based relationships that affirm our human desire for connection to each other and to the earth. By creating this structural basis for community, local economies make caring for one another and for the land into guiding principles of daily life.
Watch the video below for more on why localization is so beneficial – and so necessary.
An important point to note is that localization does not mean total isolation. It isn’t about eliminating all trade; communities can still export surpluses once local needs are met, and they can still import goods that can’t be produced locally. But localization allows local, regional, and even national self-reliance to replace dependence on distant, unaccountable corporations.
Localized economies are created by and for the people who live there. Rather than subscribing to a global monocultural model, localized economies respect local cultures and needs, while allowing for the free exchange of knowledge and ideas across borders. In fact, localization requires international cooperation and collaboration to address global problems like climate change, and to forge agreements to scale back the rapacious power of global corporations and banks.
Bottom-Up and Top-Down Actions
Another key point is that any systemic shift towards localization will need to be driven by a combination of bottom-up grassroots initiatives and top-down policy changes.
Millions of local and regional enterprises are already demonstrating that they can do a better job providing for basic needs – including the fundamental human need for community – than the handful of giant corporations that currently dominate the world’s economy. We’ll talk about this in more detail further down the page, in the section “Benefits of Localization”.
But as those initiatives build a new economy from the ground up, we also need to pressure our governments to make policy changes, such as:
Shifting taxes and subsidies to support local, sustainable businesses instead of global corporations.
Renegotiating trade treaties so that they protect the rights of countries to support their local business sectors and conserve natural resources.
Changing regulations in the finance sector so that our financial security, as individuals and nations, isn’t dependent on the risky gambles of financial institutions that are falsely considered “too big to fail”.
Modifying food, health, and land-use policies so that they support local projects rather than multinational corporations.
This kind of strategic restructuring of economic supports and policies would create the conditions for grassroots localization initiatives to flourish and multiply. For example, ending subsidies for fossil fuels, pesticides, mechanized agriculture, and long-distance trade would enable healthy local food to become the cheapest and most accessible food on the market. Just imagine what that one change could do as far as helping community-based livelihood opportunities to become widespread and abundant.
As we often say, there is no single blueprint for localization. Instead, there is a set of core guiding principles and common threads: supporting small-scale enterprise, embracing diversity and connection, and prioritizing the wellbeing of people and planet over corporate profits. But because localizing inherently means adapting economic activity to a specific place and culture, it will look a little different wherever you go.
Local economies cover a wide spectrum of needs, and the range of possibilities for local economic initiatives is staggering. In our Planet Local library, we’ve collected numerous examples of successful projects happening right now, all over the world. You can view a selection of the most recent additions to Planet Local here:
What is Globalization?
Economic globalization is a process defined by the deregulation of trade and finance in order to enable businesses and banks to operate globally. Since at least the mid-20th century, national governments and international institutions have been nearly unanimous in supporting globalization, often through policies that prop up large transnational corporations to the detriment of small and local businesses. With the help of these policies, a single world market has emerged.
Corporate-funded think tanks and media outlets would have you believe that this global market is characterized by the free flow of ideas and technology, international collaboration, interdependence, and a worldwide sense of community – in other words, that the global market has created a ‘global village’.
But the reality is far different from this rosy picture. Our global economic system has become so large and complex – with producers and consumers, CEOs and workers, and cause and effect all far removed from each other – that ethical choices are almost impossible to make, and environmental and human rights disasters have become commonplace.
It can be challenging to understand the workings of a system that is so vast, out-of-control, and deeply ingrained into the fabric of our daily lives. But by breaking the global economy down into five key structural elements, and understanding how it came to exist in the first place, we can begin to comprehend it – and, ultimately, resist it.
We’ll begin with a look at globalization’s origins.
The Origins of Globalization
The modern global economy is the culmination of a process of conquest and colonialism that began 500 years ago, when European powers spread an extractive economic system – one reliant on slavery, the destruction of local cultures and economies, and the imposition of monocultural ideas and practices – all across the world.
Watch the following short extract from our film The Economics of Happiness for a brief overview of how slavery, debt, and corporate control have shaped the global economy.
Key Features of Globalization
As an economic system, globalization can be broken down into five key structural elements, each of which feeds into and supports the others. Use the tabs below to explore these five elements.
Large corporations now exert unprecedented influence over policymaking and the media, but are unaccountable to voters or elected officials. Many corporations are so big that they wield more economic and political power than national governments; in 2017, out of the 100 largest economic entities in the world, 69 were corporations.
Most of this power has been handed over to corporations by national governments. ‘Free trade’ and investment treaties, for example, typically include Investor-State Dispute Settlement (ISDS) clauses, which give corporations the right to sue governments over policies that might reduce their expected profits – such as domestic labor laws that mandate humane working conditions, or rules that limit pollution.
Taken together, these structural elements have had devastating effects on people and the planet. We’ll run through those effects next.
Costs of Globalization
A fish served in a California restaurant may have been caught illegally on a Thai fishing vessel manned by slaves. A t-shirt bought in Germany may have been sewn in a Bangladeshi sweatshop, where workers labor in unsafe conditions for starvation wages. The rising consumption levels of India’s middle class may be contributing to climate chaos thousands of miles away.
In the long term, the increasingly globalized economy has no winners. Small farmers, the poor, and the disenfranchised have been the first to suffer its most devastating consequences. But as the economic, social and environmental costs of globalization mount, not even the wealthy will escape its impacts. These include:
1. Loss of Livelihoods
All over the world, jobs are lost when big business displaces local businesses. For example, the giant online marketer Amazon employs about 14 people for every $10 million in retail sales, while main-street shops employ 47 people for the same amount of sales.
2. Environmental Breakdown
Globalization intensifies the ecological consequences of industrialization. Corporate agribusinesses poison topsoil and let it wash out to sea. The timber, oil, and mining industries clear-cut millions of acres of irreplaceable forest each year. Pollution is destroying ecosystems worldwide and species extinction is accelerating rapidly.
3. Lack of Resilience
Because globalization encourages countries to specialize their production, most now rely on imported goods to meet basic needs.
4. Erosion of Democracy
The hypermobility of corporations, the creation of money by deregulated banks, and the cozy relationship between government and big business have resulted in a profoundly undemocratic global order. Political power is becoming centralized into unelected, unaccountable bodies like the World Trade Organization (WTO), the International Monetary Fund (IMF), and the European Commission, steadily shrinking the influence of elected officials on policy decisions. And when political parties on both the left and the right embrace the wishes of corporate interests, voting can seem all but meaningless.
5. Growing Wealth Gap
The wealth of the world’s 8 richest people now equals that of the poorest half of the world’s population – more than 3 billion people – and economic inequality is worsening, due to the increasing power of corporate rule.
6. Unhealthy Urbanization
Globalization erodes rural economies, leading to massive population shifts from rural areas to cities. In 2003, a staggering 1 billion people lived in urban slums, a number expected to double by 2030. Many of these people were displaced from rural communities to make way for ‘development’ projects, or lured to the cities by the promise of jobs and a better life.
7. Loss of Food Security
Multinational corporations are successful only if they can market on a large scale for a huge number of homogenized consumers. The result has been a 75% decrease in the world’s agricultural diversity over the last half-century; this narrowing of the genetic base puts food security at risk worldwide.
8. Declining Health
Industrialized societies are currently experiencing unprecedented rates of obesity, diabetes, heart disease, and cancer. Processed food, pollution, sedentary jobs, and a sense of isolation – all side-effects of globalization – are contributing to a worldwide decline in well-being.
9. Psychological Costs
In traditional societies, personal identity is grounded in deep community ties and a connection to place. In the modern economy, increasing mobility, competition, and dependence on a centralized market have eroded these relationships, destabilizing our sense of security and belonging. Vulnerable, isolated individuals become easy targets for advertising messages telling them that just one more consumer purchase will enable them to meet artificially imposed standards of looks, lifestyle, and material ‘success’.
Every day, people across the world are bombarded with imagery that presents the modern Western consumer lifestyle as an ideal, while implicitly denigrating local traditions and land-based ways of life. The prevailing message is that urban is sophisticated and rural is backward. No matter who you are or where you live, the consumer monoculture imposes expectations that are impossible to fulfill, fueling feelings of insecurity and leading to epidemics of depression, anxiety, and addiction.
10. Violence and Conflict
The rise of ethnic, racial, and religious tensions around the world is in large part a predictable effect of an economic system that promotes a global consumer monoculture while at the same time heightening economic insecurity. Far from being the pathway to international cooperation, globalization has actually had the opposite effect, driving wedges between countries, between ethnic and religious groups, and between individuals.
Moving Beyond Globalization
If you’re feeling overwhelmed by the enormity of the global economic system, you’re not alone! It’s easy to feel helpless – but consider that the global economy is man-made, and therefore can be changed. The course that has been set for us is neither inevitable nor fixed, and we can choose to shift direction.
Next, read through our learning guide on localization for an overview of what that shift could look like.