Why Local Economies are Important

We believe that if men have the talent to invent new machines that put men out of work, they have the talent to put those men back to work.

John F. Kennedy

Among the problems facing western economies, the lack of "jobs, jobs, jobs" is more important than consumer confidence, corporate shenanigans and shrinking lines of credit.

As the 3^rd Millennium gets underway, marginal and part-time jobs - or no jobs at all – have become the order of the day. The reasons are not hard to discern: Smart technologies and global trade agreements have been ‘rationalizing, automating, amalgamating and out-sourcing' employments. The results have been undermining economies and obstructing living wages in developing nations.

In 2008, a threshold was crossed and, in real dollar terms, many economies began contracting, first in western nations and then around the world. Although governments focus upon immediate fixes ...  bailouts and stimulus packages, putting the train back on the track that got us here cannot be a solution.  The elephant in the room is that economies cannot prosper when ten per cent of human beings control ninety five per cent of the wealth – no matter how adroitly  debt-based lifestyles are promoted, emerging nations exploited and future generations mortgaged.

Modern economies are good on supply side stratagems but depend upon  exploiting consumers as the world's last commons resource:

• A network of wealthy individuals  controls economies and governments.
• Sophisticated technologies and software programs contain more and more of the intelligence needed to eliminate workers or integrate  skills into sophisticated productions.
• Workers have correspondingly diminished capacity to negotiate wages.

Another factor is in play:  With Al Gore and David Suzuki whispering in their ears, the wealthy recognize that environmental and resource depletion issues demand a  reduction of global GNP.   In other words, the only ‘green agenda’ the wealthy find reassuring requires enlarging the proportion of $2.00 a day  human beings from fifty per cent to at least eighty per cent.

The industrial revolution catalyzed middle class populations and a small percentage of  enormously wealthy people. From the point of view of the wealthy, middle class well-being is an unsustainable contagion.  If a middle class emerges in India, China, South America and pollutes and consumes like the middle class in 1^st world nations, the planet’s goose will be cooked. Whatever else the future holds, middle class well-being must either be eliminated or transformed into small footprint forms of vicarious living with the help of professional actors, athletes, social media and, most recently, by migrating populations into virtual lifescapes a la Mark Zuckerberg's Meta project.

How could the wealthy contemplate such a cruel future?  The answer is simple: They regard you and me the  way we worry about the 3.5 billion human beings already struggling to stay alive. We represent either economic possibilities or problems to be solved.

Fortunately, the question of whether recessions are the result of corporate malfeasance or political blunders is not the issue. Economies are in trouble is because  non-wealthy populations have failed to develop community-based countervails to development and globalization.  ‘Progress and development’ initiatives often yield localized, short-term paybacks, but are always people displacing.  In other words, new discoveries and technologies only benefit most human beings if they are invested in  individual and community self-sufficiency.

A useful rule of thumb has been articulated by “100 Mile Diet” advocates: At least twenty-five per cent of our wants and needs must be produced within one hundred mile circles.

Failures to retain  the local economies characterizing the 19^th and early 20^th century are why 3^rd world ghettos are emerging in 1^st world nations. Victims include the unemployed, the marginally employed, retirees and those unable to qualify for ‘knowledge economy’ jobs. As middle class well-being spirals down, the apparent need for further automation, more efficiency, still more outsourcing … means that increasingly sophisticated, once-secure occupations will also be discarded.

Hundred Mile Economies would address these difficulties. They would invigorate and stabilize central economies, reduce pollution and conserve energy. Three components are required:

• Interested individuals, including the unemployed, marginalized and homeless, would be listed in catalogues or web-based databases of skills, tools, woodworking equipment, service station-like facilities, gardening opportunities, millinery and domestic arts....
• This information would allow people to produce goods and services to meet their own needs.
• To facilitate these activities, governments could establish regional currencies and exchange rates linking them with federal currencies.

Although federal dollars could be used,  regional currencies have several several advantages:

• The sense of belonging to a local economy would nurture enterprise and camaraderie.
• Regional currencies would constrain the migration of surplus value out of communities.
• Participants would have tangible incen­tives to develop skills and products for local consumption.
• Regional economies could transform social programs.  Employment insurance and welfare would become bridge financing between central and regional economies.
• Regional economies would encourage investments in local "means of production". This would renew interest in value-adding skills: welding, carpentry, auto mechanics, animal husbandry, market gardening....
• Local economies would be inherently recession-proof. Recessions deepen because people curtail spending during economic downturns.  If twenty five per cent of a nation’s GNP came from activities that could not be downsized, rationalized, automated or outsourced, this would stabilize main economies. ­

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For decades, we should have been asking why  economies must discard individuals  because new technologies or political developments render them obsolete? With secondary economies in place, these individuals would have local, often wholesome, alternatives.

Poor and soon to be poor populations have another problem.  For decades, 1^st world governments have been controlling inflation and recession by adjusting employment levels with interest rate changes. . Such measures only begin to work when the unemployed are reduced to absolute poverty.  As long as they have resources, the supply side of the supply:demand equation is reduced, while demand continues.  In other words, unemployment is inflationary until its victims are destitute.

With regional economies as resources, governments could manage infla­tion and recession problems by encouraging movement into and out of community productions.

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Two futures are possible. Western nations can repair their burgeoning third world ghettos by investing in local economies. This would  stabilize central economies and nurture  technologies well-suited to emerging nation populations. Governments would acquire a morally-defensible way to manage inflation and recession problems. Nations would enjoy more resilient domestic economies and an enhanced  ability to sanction one another's miscreant behaviour. As well, local + central economies could very well help nations meet conservation and greenhouse gas abatement goals.

Alternatively, western nations can continue on with business as usual. In this case, ten per cent of human beings will soon own everything. This green plan that could save the planet. The cost will be the rest of us getting what we deserve.