Technology is Not at Odds with Localization
I’ve recently watched an interesting documentary about globalization and its effects. It is called “The Economics of Happiness”, and it lays down eight “inconvenient truths about globalization”:
- Globalization Makes Us Unhappy
- Globalization Breeds Insecurity
- Globalization Wastes Natural Resources
- Globalization Accelerates Climate Change
- Globalization Destroys Livelihood
- Globalization Creates Conflict
- Globalization is Built on Handouts to Big Businesses
- Globalization is Based on False Accounting
You would have to watch the documentary for a full explanation of these, but the general theme is probably familiar to anyone who has visited this subject before. The basic idea is that globalization as we know it destroys local economies and cultures by propping up multinational corporations at the expense of local small businesses. This has the kinds of effects noted in these “inconvenient truths”.
The primary causes are government policies which over-regulate and over-tax the small business and local communities while under-regulating and under-taxing big corporations. Then we also have the government subsidizing the price of certain items further robbing the small businesses of the ability to compete.
“The Economics of Happiness” also criticizes some prevalent ideas about economic growth like measuring the state of the economy by its GDP, and the idea of infinite growth.
Interestingly, however, they don’t quite blame the free market for these problems as is common among those who oppose large corporations. The point is made that what we have is not a free market at all, thereby observing something that should actually be pretty obvious. A free market can only exist in an absence of government regulation across the board. That’s what would really even the playing field, but that’s obviously not what we have right now.
What is happening instead is selective regulation. Not regulating big corporations cannot be called a sign of a free market when the small businesses and individuals are being over-regulated (with often petty laws). Furthermore, even if their hands aren’t as tied as those of everybody else, even big corporations aren’t completely absent of government involvement. A good example is the patents system that has caused the ongoing patent wars in the technology industry. That too, however, has a negative effect on the smaller businesses who couldn’t even afford to get into these expensive legal battles.
Overall, this documentary makes many good points, and the general thesis is a sound one. The proposed solution is “localization”, but they are quick to add that this doesn’t mean isolationism and protectionism. I believe the basic idea is that globalization cannot go on forever if it will result in the destruction of local businesses and communities. Increasingly weakening local economies should inevitably result in the weakening of the global economy as well.
The problem with the documentary is that it seems to give a rather strange and slanted picture of what localization might look like. A lot of attention is given to farming and local traditions, and there is next to no mention of other fields of endeavor. While I understand that food production is fundamentally important, I wouldn’t say that localizing automatically makes everyone a farmer. I also don’t think it automatically means local food production has to be so low-tech.
There seems to be a kind of confusion between radical self-sufficiency, and localization. They aren’t the same thing. One of the things that make the free market work so well when it is actually let to work is the natural division of labor. Some will be farmers, but there can be a wide variety of other professions at play.
Furthermore, localization shouldn’t imply going low-tech, or ceasing technological evolution. Mechanization is hardly the fundamental issue with the way food is currently being produced. Individual farms could still employ technology to increase the efficiency and quality of food production, while still avoiding practices which are harmful to food quality.
Equalizing the playing field and liberating local economies from regulatory burdens they now suffer from may even result in speeding up of technological innovation. Greater efficiency of resource utilization at the local level would only compound the process.
The internet would not just cease to exist either. Localizing doesn’t necessarily mean disconnecting or unplugging. Empowering the local economy doesn’t negate the benefit of networking with others around the globe, or even selling certain products internationally where this makes sense.
In a sense, this “localization” is really just about removing the artificial barriers posed by government coercion, and therefore the ripple effects that such coercion causes.
When you look at what is happening today it wouldn’t typically make any economic sense whatsoever if it were not for government disruptions of the value chain. Corporations as we know them wouldn’t even exist without government legislating them into existence (along with government provided protections from certain market forces). Outsourcing would make severely less sense if it were not for minimal wage laws denying certain individuals to set their own price. Selling things from another continent wouldn’t be cheaper than those produced locally if it weren’t for government subsidies. The list could go on and on.
Localization is then really just the liberation of that part of the economy that has so far been artificially held down. Once this process is complete, and local economies are strengthened again, we will probably see a natural re-emergence of re-globalization. Only this time it would be built on solid foundations. This is why the whole issue of “localization vs. globalization” might be a false dichotomy. The real problem is the slanted playing field built through the use of government’s coercive powers at the behest of those who managed to grab them.
It is then ironic that some of those who would support localization are often the same ones who call for more regulations of various things, thereby actually contributing to the burden that keeps small local businesses down.
There is a similar point to be made about infinite growth. It isn’t so much about infinite growth as it is about sustainability. If infinite growth could be sustained it would not be a problem. So the real goal is to base our economies on fundamentally sound principles, ones based in reality, not collective delusion. Once we do that we are free to innovate and grow endlessly so long as we keep to these principles.
Science works in a similar way. The scientific method is a sound principle that is based in reality. Wanting a particular theory to be true doesn’t make it scientifically true. Only once it is empirically tested through experimentation and the search for evidence can it be given the status of truth, and even then we always have to reserve the possibility of finding contradictory evidence in the future.
Has this rooting of science to reality made it any less capable of perpetually growing our understanding of the universe? No, it did not. It simply makes such growth real, and sustainable as such.
These are very important things to address for anyone who is in support of the general message promoted by The Economics of Happiness. Without them it sounds too much as if this brand new world of local bliss has no place for people who dream bigger than their town. Not everyone’s idea of a happy life revolves around full time farming and singing folk songs with the elders for entertainment. Some of us dream bigger. Some of us are into computer science, artificial intelligence, robotics, genomics, space exploration, and so on.
The message of localization is not at odds with these professions. In a contrary, liberating local businesses would probably result in a resurgence of innovation in these fields as well. Being able to start right where you are and actually have a chance of success because you don’t have to jump through regulatory hoops or fear some intercontinental corporation will “steal your lunch” with their subsidized products is a big motivator of entrepreneurship. And there are few things entrepreneurs love more than dreaming big, pushing the boundaries of what’s possible, and creating amazing new innovations.