OB021

Relevance of Local Economies

In a world abuzz with world trade and the communication revolution, when digital media scream and stream all around us, it sounds ridiculously anachronistic to talk of local production for local consumption. Yet, the concept of ecological footprint arose only in this new age; the concept itself is hardly 10 years old - a mere fraction of a moment when we scale it against the history of man on earth. So we seem to be sitting on top of a paradox: the more the world shrinks the more endangered it becomes. Or to put it another way, the more the so called quality of life improves, the more threatened life itself becomes (who would have thought of sustainability a 100 years ago?).

History tells us that all economy in all civilizations, until a few hundred years ago, was local. Imported goods were very exotic and strictly for the rich and famous. But now, none of us know where our products are coming from. If I buy a nail-cutter from a street hawker, it is most likely to be from China; and a bag of urea my neighbour buys for his crop may well be from UK. We dont seem to care either. In such a rapidly shrinking world, we seem to end up with two questions:

a. Is a local economy necessary?

b. Is it possible?

Both are deep and difficult questions and I will try to address them as best as possible.

a. Should Economies be local?

It occurs to me that a global economy is welcomed by consumers for some of these reasons

1. Products of global economies are cheaper and better (for example Chinese made products, Japanese cars and Indian software)

2. Since they carry a brand they assure us of some quality standards - they behave predictably and are therefore safe (in being known devils)

3. Global Economy gives an enormous choice to the consumer (for example an Australian can purchase tea grown in Sri Lanka, Assam, Darjeeling or Brazil)

4. Certain types of foreign products cater to the vanity of consumers and lets them brag their buying power (like Paris perfumes or modern cell phones)

and other similar sentiments.

While these may be convincing, there are some deeper questions that a responsible economy should address.

First and foremost, what is the social responsibility of an enterprise? Can we say that if a business is legal, and pays its taxes, it has fulfilled its social responsibilities? And talking of what is legal, really large corporates have well paid lobbyists whose job is to influence legislation to favour their business. It is well known that businesses vie with one another to buy politicians. So what price a legal enterprise? We are increasingly driven by commerce into a lifestyle and philosophy where questions like right and wrong no longer exist; 'if you can get away with it then you can do it' - seems to be the mantra. Almost every business house employs lawyers - the larger ones have lawyers permanently in their payrolls. But how many businesses have an ecological or sociological consultant, much less a moral or ethical advisor?

The fundamental evil with a large economy is the anonymity it provides; for example the Coca Cola company is depleting ground/river water in Kerala and Tamil Nadu but do we know who is responsible for this? Can we hold one person or a few individuals responsible for this?

Anyone trying to fight any injustice of a large business has to contend with an army of lawyers & lobbyists and the only course of action is a protracted legal battle and if at all justice is done it is too late to undo the damage. The corporation continues to exploit natural or human resources in the meantime.

The Union Carbide company could literally get away with murder on a very large scale in Bhopal. And their CEO's or Vice Presidents simply say they are doing their job and try to be or pretend to be nice persons in personal life - what is the use of loving Mozart or buying CRY cards when you make your living killing hundreds of people or flushing your waste in rivers? Yet , like Lady Macbeth, no one wants to think of these deeds in these ways! Anonymity breeds irresponsibility.

Secondly, modern economy takes no ecological responsibility. Wherever we look, the conflict is between commerce (mistakenly or deliberately dubbed as development) and environmentalists. Wherever possible, commerce usurps natural resources and converts them to money. Yet, common sense tells us that there can be no economy or even life without ecology. So do we consider an economy as sound, if it grows in profits but kills itself, life on earth and its beneficiaries in the long run? And it is not too long a run either. If we use up all fossil fuels, what happens to the automobile industry? it is hardly 100 years old.

Thirdly a central or global economy becomes a war, even if indirectly. Economic interests dictate policy and politics, and global economies allow only a few very big players to survive and fight in any industry - leading to extreme social inequality.

What chielfy drives business is its greed; and greed grabs and destroys. The bigger the business the larger the grab. Let us not fool ourselves that economic growth (or increased production and profits) is good for the economy and for the country. A good economy is one that is stable, and is socially and ecologically responsible. By patronizing a centralized economy, we are patronizing irresponsible greed, greed that is huge in scale. The logical outcome of a central economy is inequality, irresponsibility, ecological damage, unstability, stress, strife and overall discontent - the very threshold of war.

The way out of this, is for individuals to be content with locally available resources, and patronize simple, sustainable local economies - economies that utilize indigenous science & technology, local raw materials and cause minimal damage to the environment. Doubtless we cannot overcome human greed; even our mom-and-pop-shop tailor or grocer is going to be greedy and cut corners. But by keeping it local, we can increase the accountability of commerce and also greatly decimate its scale of greed and thereby the scale of destruction.

b. Is a local economy possible in today's world of WTO and free trade?

It is not only possible but highly desirable, if only we wake up to our real needs and choose contentment over acquisitiveness. It is never too late for the prodigal to return.

Local economies cannot be tricked in by a formula or plan. They are essentially organic and can evolve only through individual change. There are sound local economies even now in remote villages. How do we facilitate a local economy? We will try and discuss this in Market Freedom


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