An Intemperate Introduction
‘Globalization is not a policy choice, it is a fact’
Bill Clinton 1
‘Globalization is “irreversible and irresistible”’
Tony Blair 2
This book is an attempt to provide an optimistic alternative to the statements of Mr Clinton and Mr Blair above. They represent a fatalism that grips not just politicians. Far too many concerned citizens and organizations working for a fairer world also seem to have been bamboozled into accepting globalization and international competitiveness as inevitable. Yet these are not God given. 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.
‘Localization- A Global Manifesto’ has been written to contribute to a ‘mindwrench’. This involves a move away from acquiescence to the new theology of globalization towards considering the possibility of its replacement with a localism that protects and rebuilds local economies worldwide. This ‘mindwrench’ requires courage, almost of the order of an economic ‘coming out’, in order to reject the orthodoxy’s ceaseless mantra chant 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 clarion call to be internationally competitive has become so powerful that it has infected the thinking of those who should know better. These include trades unionists, small businesspeople, farmers, and those concerned about making commerce more ethical and environmental. All seem duty bound to pepper their public utterances with fervent assurances that were their aims to be achieved, then it will hurry society further down the path to competitiveness.
The global commandment that every nation must contort its economy to outcompete 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 is 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 it being shared out more fairly, locally. Technology and information would be encouraged to flow, when and where it can strengthen local economies. Under these circumstamces, beggar-your-neighbour globalization gives way to the potentially more cooperative better-your–neighbour localization.
The first part of this book defines globalization and localization and briefly catalogues the adverse effects of globalization on society, equity and the environment. It then debunks the myth that concentrating on the cheapest supply source is nationally and globally efficient (comparative advantage) and the idea, already in tatters thanks to the Asian economic crisis, that money should flow unfettered in order to make the world run more effectively (capital advantage).
The second part details a Protect the Local, Globally set of policies that can bring about localization. These involve:
- safeguarding national and regional economies against imports of goods and services that can be produced locally;
- site-here-to-sell-here rules for industry;
- localizing money flows to rebuild the economies of communities;
- local competition policies to ensure high quality goods and services;
- the introduction of resource and other taxes to help pay for such a fundamental and expensive transition, and to guide it in such a way that adequately protects the environment;
- fostering democratic involvement in both the local economic and political system;
- a redirection of trade and aid, such that it is geared to help the rebuilding of local economies, rather than international competitiveness
Such a fundamental challenge to the power of TNCs and global finance can not take place in one country alone, but will probably need to begin in the two blocs powerful enough to face down such forces – Europe and North America. Once such a debate even begins, however, it is likely to ricochet around this unstable world.
Part three deals with why and how such a fundamental change should come about. It explains how globalization and international competitiveness are leading to rising unemployment and a concomitant decline in effective demand. The book also makes the case for why the politically active are far more likely to achieve their aims if they get out of their issue-specific ghettos, and put their campaigns within a localization framework.
Public questioning and opposition to globalization has never been higher. In December 1999, in Seattle, against a background of massive street protests, the World Trade Organization’s (WTO) attempt to foist a new Millennium Round of trade expansion on developing world delegates collapsed in a shambles. The highly publicized trade wars between Europe and the US over bananas and hormone-pumped beef have raised more widespread concerns amongst the general public. The Europeans lost twice at the court of unrepresentative trade bureaucrats-the WTO and faced massive trade sanctions. Yet all this stands to pail into insignificance when the next trade war looms over genetically modified foods.
These instances should have presented an enormous opportunity for pressure groups to challenge trade rules fundamentally and call for a completely different end goal for trade. Few have done this, although as will be seen in the Conclusion, issue-specific resistance is growing. Alas, such is the mental sway that globalization has over even the politically active, that they seem to accept that their best shot is ‘a dare to be cautious approach’. This involves calling for a labour standard here, an environmental add on there, in the hope that the system can be adjusted into being a little kinder and gentler to their own specific interests. Some haven’t even gone this far. Those concerned about domestic issues such as health, education and transport still put their focus and energies into impotent calls for their governments to spend much more on this or that issue. They fail to grasp that the dictates of international competitiveness cause continuous curbs on public expenditure. This is what is demanded of governments by business which otherwise threatens them with relocation or withholding of investment.
These largely futile efforts by political activists to tame globalization fundamentally mistake the nature of the trade liberalization 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 Protect the Local, Globally approach. Long-distance trade is only for acquiring what can not be provided within the region where people live. The rules for this diminished international sector are 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 have much more potential to be met.
In short, it is time that those wanting a fairer, more environmentally sustainable world where everyone’s basic needs are met had a radical rethink. They most stop pinning their hopes of campaign success on tweaking the direction of globalization. They must stop acting as if trade rules were governed by some kind of Olympian logic that comes down from on high, with the intention of eventual global benefit. They must set their campaigning ambitions higher than deferential adjustments to the onward march of globalization. Instead, trade rules should be seen for what they are: a grubby set of global guidelines drawn up at the behest of the powerful for the benefit of the powerful. It is time for a radical change.
Finally, this book is not against rules for trade. It wants them to have the different end goal of protecting and rediversifying local economies, rather than the present one of forcing all nations to bow the knee to the false god of international competitiveness. It proposes leaving trade liberalizers a GAST- the General Agreement on Sustainable Trade.
This book is not trying to put the clock back. Globalization is doing that as it reduces the security, basic needs provision and employment prospects for billions for whom things had been improving since the second world war. Protect the Local, Globally could return us to a path that advances 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.
This book is an attempt to help move the debate about globalization away from issue-specific horror stories such as GM food, banana wars, leg-hold traps and so on. It focuses instead on what should be the goal of world trade and how radical change might be achieved. It is a blatant and heretical call for the rejection of the worldwide theology of globalization. Unless this occurs, campaigners will win the odd skirmish, but continue to lose the war. As will be seen in the Conclusion there was never a better time to drop any pretence of humility. Instead, it is crucial to play the globalizers at their own game. They have a clear end goal: maximum trade and money flows for maximum profit. Tough luck for the growing number of losers. From this end goal comes a clear set of policies and trade rules supporting this approach. Those seeking a more just, environmentally sustainable future need to have their own clear end goal and policies for achieving it, This is the debate this book was written to help kick-start. It will hopefully result in the ‘mindwrench’ away from impotent fulminating against globalization towards considering the policy route to its alternative- the localism of Protect the Local, Globally.
1 Speech to the World Trade Organisation, 18th May, 1998.
2 Speech to the World Trade Organisation, 19th May, 1998