Monthly Archives: March 2016

As the ‘old order’ of globalisation is being undermined by data flows, will localisation prosper?

 

Shawn Donnan of the FT reports that the volume of container traffic at ports in America, Europe and Asia has fallen and the value of goods traded around the world was 13.8% lower in 2014.

With the development of the digital economy there has been a shortening of global supply chains as some manufacturers are producing many of the intermediate parts that they once imported for assembly.

Localisation potential?

Instead of exporting production to low-cost countries, there is a surge in flows of cross-border data as new manufacturing technologies, including 3D printing are being used. Donnan notes, “the flow of digital information around the world more than doubled between 2013 and 2015 alone, to an estimated 290 terabytes per second”.

According to the McKinsey Global Institute, flows in finance and services have also fallen and a growing number of economists argue that this slowdown is a sign that the forces that have driven globalisation for decades are beginning to shift.

Some economists note that the plateau in worldwide trade in goods and capital has coincided with a surge in data flows — an indicator, they say, that the digital economy of the 21st century is starting to overturn the old order.

Next: A globalisation wanes, will localisation replace it?

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As globalisation wanes, will localisation replace its ‘environmentally and socially damaging global subservience to international competitiveness’?

 

bcc2 logoIn a speech to the British Chambers of Commerce, which can be seen here, Jeremy Corbyn, the Labour leader, said that a decent social policy cannot be based on an unsustainable economic policy, outsourced to the City of London:

“That (policy) has not served our economy well, and it has not served business well”.

A recent link in the Brummie led to another reference to the outworking of such policies made by Localise West Midlands’ Karen Leach:

“Inequality is a major symptom of the centralised, remotely owned and parasitic economy that neoliberalism has created for us, and provenly a cause of social and environmental ills”.

colin hines 5The title of a Cambridge address by Colin Hines, LWM’s co-founder*, included the phrase, “globalisation’s cruel smokescreen . . . time for the alternative of localisation”. He defined localisation as: ‘a process which reverses the trend of globalisation by discriminating in favour of the local. Depending on the context, the ‘local’ is defined as part of the nation state, the nation state itself or even occasionally a regional grouping of nation states.

‘At localisation’s heart is the replacement of today’s environmentally and socially damaging global subservience to international competitiveness. In its place it prioritises local production and the protection and rediversification of local economies, such that everything that can sensibly be produced within a nation or a region should be.

Localisation book 2‘Long-distance trade is then reduced to supplying what could not come from within one country or geographical grouping of countries . . .’

To this end, he continues, local economies have to be protected through policies which actively encourage consumption to remain at or as near as possible to the place of production, as far as this is sensible (site here to sell here), enabling money to remain in the local area . . .

Will the great food swap, so effectively exposed in 2002 by MEP Caroline Lucas, where similar commodities criss-cross the globe, gradually diminish?

Hines points out that growing food for export doesn’t work for the producer, though there are often high profits for the middlemen and speculators on the commodities markets. As more countries fight for the same markets, producers are forced to drop their prices in order to compete, resulting in far less money for farmers.

He insists that global trade rules must be replaced by a General Agreement for Sustainable Trade which gears technological transfer and residual international trade to the building up of environmentally sustainable local economies – fostering maximum employment through sustainable regional self-reliance.

There will be greater community cohesion, a reduction in poverty and inequality and an improvement in livelihoods, social infrastructure and environmental protection – hence, an increase in the all important sense of security –as the policies bringing about localisation increase control of the economy by communities and nation states. Hines warns that:

‘Such a major transition requires the grass roots movements and the development lobby to campaign actively for it. Governments at present have to be forced by the politically active to change to become the initial driving force for such a change in the face of the ‘priesthood of mainstream economists, commentators and the ‘masters of the universe’- big business leaders and international financiers’.

*Colin Hines is an Associate of the International Forum on Globalisation.
Following the publication of his book: ‘Localization – A Global Manifesto’ he has recognised been cited as a leading spokesman on this subject.