Localization and the Economics of Happiness

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A community garden in Brooklyn, New York, that grows organic vegetables for the surrounding community [© Andrew Lichtenstein/Corbis via Getty Images]

The localization of economic activity can be a “solution multiplier” for many of the dire problems that confront the planet today, writes Helena Norberg-Hodge.


All around the globe, there is a rising sense that we are entering a time of historic change. Whether this change will be brought on by a destabilizing climate or a chronically collapsing economy, a peaking of oil supplies or intensifying geopolitical tensions, more and more people are concluding that the current system is broken and needs to be replaced.

Awareness is also growing that the same global economic system that threatens the ecological fabric of our world has a profoundly negative impact on our personal lives. The ability of mobile corporations to cut wages, to move jobs elsewhere and to subvert the political process is not only responsible for a widening gap between rich and poor but also for increasing psychological breakdown. Depression and addiction are accelerated by economic processes that erode community while promoting a consumer mindset in which material gain equals happiness.

People want change. But imagining a genuine alternative to the corporate-led global economy is a huge challenge for people who have only known a “modern,” industrial way of life—it’s like trying to imagine a new color. Viable options are ignored by the media, which instead focuses on market-based pseudosolutions that attempt to reconcile growth with sustainability. Meanwhile, governments, wedded to the belief that a rising GDP will solve all problems, continue to cater to the wishes of large corporations.

“Imagining a genuine alternative to the corporate-led global economy is a huge challenge for people who have only known a ‘modern,’ industrial way of life—it’s like trying to imagine a new color.”

We need an enlightened vision that moves beyond the economic growth paradigm. At the same time, we need to abandon the old rhetoric of capitalism vs. communism and instead address the process that shapes our world today—namely globalization, the continued deregulation of global banks and corporations through trade treaties. This furthers other processes—centralization, urbanization and standardization—that we have been told are inevitable and evolutionary, despite the fact that they are actually driven by policy choices.

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Oxfam activists making a point about the devastating impact that climate change is already having on the world’s poorest people [Photo by Ainhoa Goma/Oxfam/CC BY-NC-ND]

A Deep Shift

For nearly 40 years, our organization Local Futures has been promoting a fundamental shift in direction—away from globalizing and toward localizing economic activity. Localization, which shortens the distance between production and consumption, is a “solution multiplier”: it dramatically reduces CO2 emissions, energy consumption and waste; it lays the groundwork for the widespread restoration of cultural and biological diversity; it’s a way to create meaningful and secure jobs for the entire global population; and, perhaps most importantly of all, it rebuilds the fabric of connection between people as well as between people and the natural world. It’s the economics of happiness.

I had my eyes opened to the key ways in which the economy affects every aspect of our lives while working as a linguist in Ladakh, or “Little Tibet,” in the Indian Himalayas in the mid-1970s. This region was quite unique in that it was completely sealed off until 1974, when it was thrown open to the outside economy. While traditional life in Ladakh was not perfect, the village-based economy was founded on the principles of collaboration and interdependence, which bolstered the connections between people, their community and their local environment. It gave rise to peace, sustainability and the most remarkable joie de vivre I had ever experienced.

“In Ladakh, I saw how a government-subsidized fossil fuel-based infrastructure for global trade completely undermined the local economy and the livelihoods it created.”

But over the next decades, I witnessed the social upheaval and environmental destruction brought by conventional development. In Ladakh, I saw how a government-subsidized fossil fuel-based infrastructure for global trade completely undermined the local economy and the livelihoods it created. An example of this was enabling heavily subsidized, chemically preserved butter from the other side of the Himalayas to be sold for half the price of local butter. I saw how, after just a few years, the undermining of the local economy led to unemployment, pulled people into intense competition for scarce jobs in an urban center and ultimately resulted in conflict and violence.

The products that flooded the region created an environmental crisis that remains unsolved today—plastic waste, air pollution and pesticides. Even more importantly, the glossy, westernized images of perfection used to advertise these products worked to destabilize the Ladakhi sense of self, leading to heartbreaking psychological and spiritual insecurity. This trend was compounded by the introduction of Western-style schooling, which pulled children away from family and community. It replaced the location-specific knowledge that had sustained Ladakhi culture for centuries with a degraded version of an education suitable for an urbanized consumer culture.

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A vendor sells his wares in the city of Leh in Ladakh, India [© Prashanth Vishwanathan/Bloomberg via Getty Images]

In the same way that globalization created unemployment in Ladakh, job security almost everywhere is threatened by “free-trade” treaties that give giant corporations the right to scour the globe in search of the cheapest labor, lowest taxes and weakest environmental standards. Just as the Ladakhis’ self-respect was eroded by glamorous images of westernized perfection, advertisers and marketers in the West continue to drive rampant consumerism by making us feel inadequate without the latest smartphone or the perfect figure, leading to crippling insecurities. And just as local production in Ladakh was rendered uneconomic by heavy subsidies for distantly produced goods, subsidies provided by nearly every government for fossil fuels and trade-based infrastructures work to the advantage of large, global players at the expense of their smaller, more localized competitors.

Seeing the Bigger Picture

For too long, we have been kept blind to this system, distracted by a theater of media scandals and politics that plays with our emotions and obscures the root causes of our social and environmental problems. We have been made to believe that our only means of resistance to the exploitation of both workers and the environment is to buy “ethically produced” or “green” products, thereby allowing ourselves to be reduced from citizens to mere consumers.

“We have been made to believe that our only means of resistance to the exploitation of both workers and the environment is to buy ‘ethically produced’ or ‘green’ products.”

Because Local Futures believes that it is mainly blindness that has allowed this destructive system to escalate, our priority has been to expose the system’s workings while promoting a systemic shift in direction. Working with other like-minded groups, we are paving the way for a worldwide people’s movement toward localization. Localization requires action at both the community and policy levels. We need to reregulate transnational corporations and banks while working at the local level to rebuild place-based economies.

We have always been convinced that if enough thinking, caring people are exposed to a big-picture global-to-local analysis, single-issue campaigns will unite to form a movement that is strong and diverse enough to challenge the existing political and economic order. This is already beginning to happen, as demonstrated by the fight against the TPP (Trans-Pacific Partnership) trade deal: environmentalists, labor unions, small farmers, social justice activists and indigenous rights activists all stood together, united against corporate deregulation.

“One study showed that the average shopper at the farmers’ market has 10 times more conversations than the average shopper at the supermarket.”

Meanwhile, hundreds and thousands of on-the-ground localization initiatives have sprung up around the world. Farmers’ markets, transition towns, community gardens, local business alliances, time-banking schemes, alternative schools and many more have proliferated in recent years and are already demonstrating the profound benefits of strengthening local ties. In these places, the fabric of interdependence is being rewoven and ethnic, racial, socio-economic and intergenerational rifts mended.

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As well as providing a market for local producers, farmers’ markets encourage sustainable farming practices and help strengthen the fabric of community [© Rolf Brenner/Getty Images]

One of the most heartening examples of localization in action is the local food movement, which has grown by leaps and bounds in the last decade. Central to the vision is the right of every human being to have fresh, local food at a reasonable price, which means prioritizing local production for local needs over production for export. The economic structure that facilitates this agenda is the local market. This demands of producers a diverse variety of products rather than a massive quantity of a single globally marketed commodity, thereby supporting agricultural and ecological diversity. A diversified farm, in turn, requires less chemicals and less machinery and instead requires the care of human hands, simultaneously reducing reliance on energy and providing many more jobs. Finally, social ties are strengthened on both the production and consumption sides: while work on the small, diversified farm is by nature social, so is shopping at the local market—one study showed that the average shopper at the farmers’ market has 10 times more conversations than the average shopper at the supermarket.

“In these places, the fabric of interdependence is being rewoven and ethnic, racial, socio-economic and intergenerational rifts mended.”

Localization is not a guarantee for peace, joy and sustainability, but it is indeed a prerequisite for these things. Just as the global economy tends toward harmfulness through the structures that perpetuate blindness, greed and tunnel-vision economics, local economies structurally confer increased visibility of the effects of our actions as consumers as well as citizens and foster closer connections to people and to the Earth. There is no blueprint for localization, only the insistence that societies and cultures be allowed to develop according to the dictates of the local climate and place, respecting their own priorities, needs and local conditions rather than the profit imperatives of global banks and corporations.

A Path to Change

In just the past few years, there has been an international awakening to the need for fundamental change. Sadly, rising dissatisfaction with the status quo has provided opportunities for the emergence of demagogues who speak to our fears and anxieties with the language of xenophobia and scapegoating. This is not the change we want or need, and we should be clear about that with ourselves and with others.

If we wish to build a truly better world, we need to engage in both political resistance and community-level renewal, linking hands with those in our own communities and across the world. We can point to the far-reaching benefits of revitalizing local economies that have already been felt in every corner of the globe. These have been hugely hopeful signs, and they should give all of us reason to hope that if we manage to build the enlightened movement for localization on both the political and grassroots levels, the change we bring will not only be revolutionary but will come with the speed necessary to tackle our global crises before it’s too late.

To be part of this worldwide localization movement, we posit the following five steps to action:

Connect: Change the “I” to a “we.” Find a group of like-minded individuals in your area to enhance the impact of your work and to offer each other strength.

Educate: See education as activism. Increase your own and others’ economic literacy. Go beyond dominant sources to find materials produced by activist groups and alternative media.

Resist: Join other groups in your region or country who are resisting economic globalization on a policy level by campaigning against trade treaties and against the further expansion of corporate power in all its manifestations. Spread the word about these movements and engage others in your community.

Renew: Focus on rebuilding local economic and social structures—from community gardens and local business alliances to localized renewable energy projects—and experience the immediate benefits. Work to your strengths!

Celebrate: Revitalize the practices, festivals and celebrations that connect us to nature, to others and to ourselves. This is a spiritual awakening that will not only give you the stamina to continue your work, it will encourage others to join you.

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