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Transforming from Globalization and The Importance of Moving Back to Localization

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Poverty, climate change, the breakdown of democracy, an epidemic of depression – the world is facing a convergence of crises.
The cause? Economic globalization.

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.

Corporate Rule

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.

Source: Local Futures

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Economics

Local food sourcing saves people and climate

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World traffic in food by massive corporations harms environment, jobs, and health; yields no net change in food availability; and harms jobs and food security everywhere. Swedish linguist Helena Norberg-Hodge, founder of International Society for Ecology and Culture (now Local Futures), tells Helen Lobato of Women on the Line how prioritizing local food production and distribution will build back local economies and roll back corporate oil-dependent hegemony.

Source: WINGS: Womens International News Gathering Service

 

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Economics

Can Covid-19 be the Opportunity to Shine the light on the need for Localization?

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Prior to the outbreak of the COVID-19 pandemic, it was believed that globalisation would lead to development and prosperity. However, the whole scenario has changed now with almost every part of the world under some form of lockdown, which has posed a major challenge to the fulfillment of the demand for various goods and services. This is has shifted focus to the importance of the ‘local’.

The situation was no different in Ladakh when restrictions were placed on the transportation of various supply chains during the crucial period (summer months). I am describing summer months as a ‘crucial period’ for Ladakh as it is the only period when we are open for economic activities. These are difficult in the winter months when the roads to the outside world remain closed. Ladakhis stockpile all basic commodities in the summer to last them for the rest of the year.

During the lockdown, vegetables and fruits were nowhere to be seen in Ladakh, and there was a shortage of other food items too. This was primarily due to travel and transport restrictions at a time when these commodities are usually brought to Ladakh. Such a situation calls for a return to the days of the past, when Ladakh was a self-sustaining and self-reliant kingdom and dependent on the outside world for very few commodities. However, with gradual improvement in connectivity and the increased impact of globalisation, we became dependent on the outside world for all of our basic necessities, and for economic development.

The arrival of tourists from 1974 onwards revolutionised Ladakh’s economy, with many preferring to invest in tourism-based businesses instead of traditional agriculture and animal-based livelihoods. In time, the occupational shift became so prominent that people in Ladakh are now completely dependent on the transportation of basic commodities such as vegetables, fruits, and oils from the outside world.

I am not saying that we should all move back to traditional agriculture and animal farming. However, I am trying to highlight the unsustainable dependence we have nurtured to meet even our basic needs, which we can easily produce in Ladakh. For instance, a wide variety of vegetables and basic goods like oil, butter, flour, etc. can be produced in Ladakh, and imports can be reduced as we scale-up local production. Once we have enough production in Ladakh, there will be no need to transport them from outside. At the same time, there would be more employment and people would not need to migrate outside for job opportunities.

Localisation doesn’t necessarily mean to become completely self-reliant. Instead, it refers to a reduction in the distance between producers and consumers and consequent need for unnecessary transportation. This idea of being local has been emphasised by German economist E. F. Schumacher, author of Small is Beautiful (1973), and by Helena Norberg-Hodge, director of Local Futures and co-founder of the Ladakh Ecological Development Group and the Women’s Alliance of Ladakh.

Ladakh has the potential to be a self-reliant and self-sufficient Union Territory wherein we will not need to unnecessarily transport basic goods from outside as they can be grown and produced in the region. This includes vegetables and fruits as well as education facilities and job opportunities. There are many advantages to being local and consuming locally-produced goods. It ensures a quality assurance for products as one can trace their origins easily. Perishable vegetables and fruits will be safer to consume with less chemical content and preservatives, which in turn will help boost our ability to withstand various infections.

Localisation also has a number of positive environmental impacts. The reduction in unnecessary transportation will lead to a major reduction in the carbon footprint of each commodity, help conserve natural resources, reduce environmental pollution, ensure food security and mitigate climate change. In addition, it will create new job opportunities, reduce economic conflicts and increase contentment amongst local communities.

We already have numerous goods being produced locally, with several entrepreneurs making new innovations. For instance, the increased demand for facemasks and hand-sanitisers has led to many volunteers producing these locally in Ladakh. These are small acts of being local.

In my opinion, we must consider the COVID-19 pandemic as a wake-up call from nature. It signifies that it is time for us to give back to nature what we have been taking from it till now. It is not the last pandemic and global disaster that we will have to overcome. Hence, it is essential that we learn our lessons so that we are able to meet these challenges when we face them again. I feel it is the right time to reboot the system, build local capacity, and promote local production to create a more resilient society with a localised economy.

 

This essay originally appeared in the Ladakhi news magazine Stawa.

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Free to Download Fight the Fire: Green New Deals and Global Climate Jobs

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Fight the Fire

Fight The Fire Book Cover

OUT NOW!

“The most compelling and concise guide to averting climate breakdown.” – Brendan Montague, editor, The Ecologist.

Download Jonathan Neale’s Fight the Fire from The Ecologist for free now.

The Ecologist has published Fight the Fire for free so that it is accessible to all.

We would like to thank our readers for donating £1,000 to cover some of the costs of publishing and promoting this book.

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