A World of Possible Transitions:
Mega-Cities vs. Agrarian-Based Localization
by Marcel Idels
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Ecosolidarity believes that the crisis of corruption in the political, social and economic spheres must be addressed and solved simultaneously by bold programs that restructure Colombia and other strife-torn countries. Only then can real progress be made toward sustainable development, ecological protection and peace. Land reforms, agrarian reforms and sustainable growth are only successful when there is a fundamental restructuring, as in Nicaragua, Cuba, Korea, Taiwan, Japan, China. The South American elite's violence and intransigence - backed up by the US - has caused the failure of every agrarian reform in South American history. [1 footnotes].
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The poor countries face a world dominated by the US and its corporations. [2 footnotes] These hegemons will continue to insinuate their investments and influence everywhere. Debt burdens will increase everywhere and more of the assets of poor countries will be sold to pay for short term public finance. Poor country budgets and national profits will leave these countries to pay off debts to the rich.[3 footnotes]. Oppression and poverty in rural areas will flood refugees into hopeless Mega-Cities.[4 footnotes]
This reality requires that they pursue a transitional program of shared austerity and nationalization (reverse-privatization for localization). Regional integration can assist this transition. Mutual austerity can become abundant productive sharing as seen in Porto Alegre and Grande do Sul in Brazil where since 1999 growth and employment have risen more than in the rest of Brazil. [5 footnotes]
Leadership from Brazil could assemble a whole new South American continental community and trading zone to oppose NAFTA and even the WTO - A “Quasi Autarchy” on one resource rich continent. Redistributive policies and real democracy could drive out corruption and waste while shifting budget allocations away from the military and over to social investments. This would energize the masses and release the productive capacities of the region. [6 footnotes]
This Requires Redefining Economics for a Post-US World and A Common Sense Awakening
In the rich countries we have lost touch with everything. We don't know from where or how the food comes. What are the real costs of a car-gasoline-throw-away culture? Did you forget to vote for crowded highways and carcinogens in your water? The WTO and the right-wing free market privatization (corporatization) of everything that they can grab removes most of our decision making power as democracies and turns them over to economics - market "choices." Few people study politics and fewer study economics. Worse yet, it is almost impossible to get a real education in economics or politics with out combining them with everything else - and "They" frown on that. There isn't much democracy left and if you don't understand economics - well, you may "think" that you are participating, but they have you by your wallet-sized ignorance.
The people of Latin America have figured this out and they know how to vote. Viva Lula, viva Lucio, viva Chavez, viva Evo Morales!
To examine the transitional economic programs that face the grassroots left in Latin America we first examine the longterm global goals that will create a gradual and rational transition for poor countries and the rich toward a sustainable planet: The IAPE.
A Soft-Landing Transition:
INTERNATIONAL ACTION PLAN FOR EARTH (IAPE)
THE IAPE GOAL: TO CREATE A WORLD OF DIVERSITY, EXPERIMENTATION
AND TOLERANCE WHERE CIVIL SOCIETY CAN IDENTIFY AND IMPLEMENT
POLICIES TO PROMOTE AND PROTECT EQUITY, SOCIAL JUSTICE AND THE
DEVELOPMENT OF ECOLOGICALLY AND SOCIALLY SUSTAINABLE
COMMUNITIES - A GLOBE OF AUTONOMOUS VILLAGES [7 footnotes]
THE 7-POINT STRATEGY : Exert concerted pressure in the streets, legislatures
and international forums to force governments and international institutions to adopt
the following programs and policies:
1. A moratorium on public and commercial debt payments by the poorest 100 nations
until an international economic structure of sustainability and localization replaces the
WTO neoliberalism
2. Debt forgiveness for the 50 poorest countries and any countries to which significant
reparations are owed for past exploitation OR environmental damage [8 footnotes]
3. Guaranteed and automatic funding for a comprehensive international program of land
reform, agrarian reform and ecological rural development accomplished through taxes
on international trade and finance and additional taxes on all stages of the production
and consumption of fossil fuels. This people-decided social investment program would
replace the World Bank, the IMF, their clones, all foreign aid programs, and all corporate
investments outside of their home nation [9 footnotes].
4. Penalties for countries spending more than one percent of GDP on the military.
5. A ban on weapons sales worldwide [10 footnotes].
6. An end to most farm chemical use in the OECD countries and an end to agricultural
production or export related subsidies in the OECD [11 footnotes].
7. Enforcement mechanisms for the Earth Charter and the IAPE: tax increases for
non-compliance, international boycotts and asset seizure. [12 footnotes]
The neo-liberal free trade and structural adjustment programs of the IMF, World Bank and US multinational corporations (WTO World Government) have failed to reduce poverty and are now threatening to create chaos around the world by destroying rural economies and increasing urbanization. [13 footnotes]
The IAPE replaces the World Trade Organization, the IMF and the World Bank with a global tax on trade, finance and fossil fuels. These taxes would be administered by the UN as the International Social Fund for Sustainable Development. Education, health care and support for subsistence farmers, including crop subsidies, will be the priorities. Sustainability guidelines, research and education can help keep this new economic structure on target. Existing models of successful programs in Kerala, India; Cuba; Bangladesh; Brazil and elsewhere can be adapted to fit the cultural and unique situations around the world [14 footnotes]. A new economics of localization and longterm environmental planning is necessary for realizing any meaningful change.
People are eager for something beyond neoliberalism and its Democracy of the Façade [15 footnotes].
A New Economics of Localization: An Alternative Import Substitution
An economics of Democratic Localism with the priorities of a small farm society can avert the escalating instability of poor countries, by reducing waste, pollution and corruption; redistributing income; raising farm productivity with fewer inputs; improving rural standards of living and halting urbanization. A sustainable and democratic future will have no global corporations, limited long-distance trade and will be fueled by a cooperative peaceable economy of sharing and renewable resources. [16 footnotes]
This economic alternative supports a market economy, but it does not allow for corporate capitalism or market influence by individuals or foreign speculators. [17 footnotes] Corporate Capitalism destroys democracy, markets and small enterprises. It leads to an unequal distribution of wealth property and incomes. Corporate Capitalism makes bad decisions against the will of the people and the sustainability of the future. The savage capitalism that stalks the world today has nothing to do with a free market or what Adam Smith and the original free marketers believed a free market economy should be [18 footnotes]. Democracy is not what it should be either.
For many decades corporations have received subsidies for investment, insurance and export promotion - and billions of dollars worth of government and university research assistance, grants and training (corporate socialism for growth) [19 footnotes]. Now it is time to reverse this bias of subsidies for the rich and powerful and make reparations to the people, small enterprises and low-tech green investments.
Localization is about shortening the distance between producers and consumers. It is not against all trade, but rather it is about reducing to an absolute minimum the waste now caused by having everything from butter to raw logs crisscrossing the globe.
Neo-liberal economists and even many well-meaning development organizations will dismiss the ideas of Localization as protectionist [20 footnotes]. And that is exactly what they are -a protectionism that is socially just and ecologically sound because it protects local producers and the natural resources (soils, streams, forests) and it is the best assurance of adequate supplies to local consumers.
Localization is not isolationism. The principle of subsistence (low consumption/reduced waste) is the best guarantee of a marketable surplus from a region. Peace and neighborliness will lead to expanding ripples of charity and aid to the less fortunate. Regional integration ideas supported by Chavez in Venezuela and Lula of Brazil could compliment a localization transition. [21 footnotes]
THE BASICS OF ECONOMICS REDEFINED
Commonsense Exchange and an Exchange of Common Sense
Agriculture and photosynthesis are the most important renewable resources of most countries. Even poorly endowed places must take advantage of whatever will grow. Trees and riparian areas protect the water and biological resources (biodiversity). Some food, fish or export crops are necessary outputs from all places. Protecting renewable resources like the soils, forests, estuaries and fisheries is a duty and the basis of natural wealth. [22 footnotes]
Issues surrounding agriculture touch on everything else: water, infrastructure, environmental protection, land use, and trade. Many of these are types of public goods or else they impact public goods allocation and protection.
Policy makers want to keep economics a secret so they never discuss the foundations of economics that are really just a decision about "what kind of country you want." The rich want a world designed to keep them fat and in control. Few political parties anywhere challenge these assumptions of salvation through growth. Policies of inequality and growth are promoted. The main purpose of economic growth is not to make the rich richer (though it does that well), it is to fool the poor into thinking that the economic system makes sense - that it just takes time and hard work to get rich. -This creates a kind of "lottery society" where no one cares about the poor or fairness because they live in the time of opportunity and they will "hit the big one" someday.
The US and the West in general need a strong dose of the "Common Sense Awakening" that is now energizing most of South America. This awakening grasps the lies spawned by the corporate-government elite and so, every-day people are re-defining the "Dismal Science" and with a New Economics of Social Prioritization
PUBLIC GOODS
Air; water; minimum electric service; the airwaves; health care (nutrition); watersheds; clean environments; public open space, parks, pastures; education; and military defense are public goods. These are things that can not be left up to the market because their benefits accrue to all and to the future. The mentality required to safeguard and distribute these goods is not profit or efficiency but instead, safety, fairness and social peace. [23 footnotes]
PUBLIC "BAD's"!
Externalities can be negative or positive (education, health care, clean water…). Negative externalities are things like pollution, garbage, toxic residues, trade wars, and global warming that are not captured in the price of the thing that causes these Bads. One pays for gasoline but the price does not include the suffering, deaths and illness that result eventually from the pollution, the congestion (lost time), accidents, junk car disposal and wars for oil. Other examples of public Bads are genetically modified organisms (GMOs) and complex technologies (nuclear power, modern medicine, computer manufacturing). [24 footnotes]
Locally derived and manufactured technologies (usually just knowledge) can improve the general welfare. Complex technologies imported from "expert" countries - and requiring their advice, repair and replacement - are almost always detrimental. They create dependence and often alter the locally adapted cultural practices and useful traditions. [25 footnotes]
When change is slow societies can debate and adjust. But since the 1970's rapid modernization, industrialization and urbanization have uprooted billions of people and overwhelmed cultures and an ages-old traditions. In this situation there is no time for enlightened public planning, input or democracy. Did Pakistanis working in the oil fields of Arabia vote to leave their families in order to survive? Would US citizens of the 1950's and 60's have voted to design cars so that they can only be worked on by specialists?
PRICES
Price is what people are willing to pay and what sellers are willing to accept: the intersection of a mutual agreement. This is only a short term phenomenon as low prices (low profits) will encourage suppliers to switch to something more profitable. It is government's job to regulate this especially when it comes to basic goods and longrun security.
Low prices for locally produced goods are public Bads that can result from unfair trade or from bad policies. High domestic prices are good and help local producers. The spin-off or multiplier effect is high when fair prices are paid for sustainable activities. [26 footnotes] Government subsidized housing, education and health care can help the poor and offset the higher food and other prices in an import substitution alternative economy. [27 footnotes]
US oil policies (foreign and domestic) are a good example of what not to do. Tax breaks to giant oil companies and US foreign policy keeps the price of imported oil low while it does nothing to increase the output of renewable domestic energy resources or efficiency. [28 footnotes] Of course, oil is really an excuse for military intervention and corporate insertion.
Structures, Policy Basics and Sustainability
The "Who" of farms determines the wealth distribution. If a few individuals control the prime farmland then they will control the crops grown and the technology used. Policies favoring the use of capital intensive machines and chemicals will keep wages low and make it difficult for small farmers to compete.
The "What is Farmed" determines the food dependency/food sovereignty of a place. If export crops and non-food crops are the priority then the country will be at the mercy of the market which has been unkind in recent decades to most export crops. A diversity of crops and support to basic foods producers protects food sovereignty and reduces the vagaries of the market.
The "Where" of farming determines the impacts on the ecology and the longrun productivity of the country. Over-production near rivers, bays, estuaries or steep hills has a potentially large impact. Most river areas and hillsides should be left wild or lightly used in rotation with light grazing and tree crops.
The "Why" of farming determines the importance of culture, respect, sustainability and the importance of life (lives and spirituality) and also the connection of the people to the ecology that they depend on and live in. The "How" of farming is connected to and grows out of all of these other views and factors. Or is it the other way around?
Government policies determine these factors of the Who, What, Where, and How of farming and this permanently shapes the nature and development of rural areas and thus the whole nation and ultimately the culture. Investments and trade polices accelerate or else control the trends in production and growth and thus they affect all aspects of rural life, the identity of a country and its relations with neighbors. [29 footnotes]
LABOR MARKETS AND THE ALLOCATION OF MUSCLES AND BRAINS
After deciding how to utilize natural resources, land and the ability to grow things, the most important decision left to a government is what to do with all the people who want jobs - and those who don't. Is labor a type of public good? So far, we have shown how most important things are public goods because their availability and quality affect everyone. Government policy determines access (prices or rationing) to these basic goods and even the distribution of income can affect the longrun prices of many items. [30 footnotes]
Governments intervene in labor markets to help constituents (corporations or workers) and to increase the efficiency of the country (profits or social cohesion). They affect labor markets indirectly through education funding, the distribution and use of land (taxes, agricultural subsidies, environmental regulations), trade emphasis and especially through investment policies (capital or labor subsidies). Capital is what is taken from the workers be it privately (profits) or publicly (taxes). [31 footnotes]
In most of Latin America the agricultural sector of the economy has been taxed (exploited) to invest in the urban industrial sector. These investments have usually been capital (money and imported machine) intensive. This is a tragedy in that it under-utilizes the two most abundant (cheap) resources of these countries: land and labor. Industrialization might make sense for small countries that lack abundant farm lands like Singapore, Taiwan or the Netherlands, but the pursuit of rapid industrialization in Latin America has only resulted in devastated rural areas, crowded cities of the unemployed and massive foreign debts. No wonder people are fed up. Of course endemic corruption and foreign corporate profit extraction have played a large role as well. [32 footnotes]
Governments shape labor policy directly through minimum wage laws, child labor laws and a host of other labor issues such as, unionization, immigration and public employment. So, we can't ignore governments' role in labor markets. As with other public goods the decision-making concerning labor should not be determined by maximizing efficiency or profits because it has longrun impacts on the whole society (economically, politically and culturally).
There are two paths to follow: One path is a friendly (or not so friendly) Fascism: workers are kept compliant and work hard (taxes and profits) for the corporation. The alternative path encourages the engagement of the workers and the whole society in decision-making through associations, assemblies, unions, councils and political parties. This sounds like democracy - a popular and participatory economic democracy like the PT and Lula support in Brazil. [33 footnotes]
The path of democracy requires labor policies along the lines of the COLACOT plan for Colombia. [34 footnotes] In this model the market is regulated by dispersing power among several actors: the free market, the state and the Solidarity Economic Sector of collectives, worker-managed enterprises and associations of small producers. This program is similar to those used in Nicaragua (1979-1990), Cuba and Hungary (until 1986).
COLACOT emphasizes the social nature of production and the important need to train workers and society about the benefits of a Solidarity Sector and a mixed economy. Education programs would be directed to study the new economic program and train people to fill roles in this new program. The need for the Solidarity Sector to establish vertical and horizontal links is also apparent in the experiments of the worker self-management movements (WSM) in Argentina, Peru, Bolivia and Chile. [35 footnotes]
An import substitution program utilizing tariffs would protect the evolving (infant) industries of the Solidarity sector of the economy (cooperatives and worker-controlled enterprises). Justification rests at the doormat of neoliberalism and the tremendous social debts that it created. The first decade of the Latin American import-substitution period (1966-1990) was positive, but corruption, bad investments and the US and corporate economic and political interference ruined the program. The alliance between white-collar bandits - the Latin American elite - and the US sponsored "extortion (debt) economics" replaced the import substitution program with neoliberalism. [36 footnotes]
TRADE, but Who, What, Where, How? WHY ?...
Trade (travel) is always "Bad" (a sign of problems) from a localization viewpoint. It is also a valuable set of information. Trade indicates a lack, a shortage and something you would pay a lot to get. Trade means that some other person, town or country produces something that you can't or won't; something better or more cleverly (cheap) made. Trade is always bad because it creates pollution, waste, complexity (like war) and hidden or long-term costs. The waste results when resources (labor, land, capital, knowledge, sustainability) are diverted to the trade (transport) sector. This includes ports, harbors, airports, trains, highways, trucks, cars, boats, ships, planes, jets, warehouses, bridges, horses, customs bureaucracy and even bicycles. Trade hides pollution in oceans or in other countries. [37 footnotes] It introduces non-native pests and diseases. [38 footnotes]
GROWTH AND ENERGY USE
Increasing trade leads to increased energy use. To make any sense (profits) out of trade, investors utilize economies of scale and build bigger ships, mega-ports, canals and jumbo jets. All of these trade infrastructure investments require continuous inputs in the form of energy, personnel, maintenance and replacement. The costs of all this would show up in prices except governments often massively subsidize all aspects of trade, transport and travel - or they pass on the costs to future generations to manage. This is corporate socialism. [39 footnotes] Often powerful countries use trade and maintaining trade stability as excuses for military bases and resource wars.
Trade is also bad because it usually is not fair. One seller is more desperate or ignorant than the other is. This is accentuated when powerful corporations or rich countries trade with the less powerful. The more trade and the farther it travels the more waste is produced. [40 footnotes]
NICE TRADE
There are wonderful attributes to trade (travel): variety, innovation, relaxation (escape), learning and changes in climate. Most of these could be accomplished close to where people live: 200 miles in most of the world. One can easily ride a bicycle 300 miles in a week. When trade and travel prices are adjusted to include all of the hidden costs, people will chose to improve, diversify and beautify their region and neighborhoods so that they don't have to trade/travel as much.
If you are starving and have some diamonds then by all means trade them for food. Not starving is a good thing, but obviously it would be better to grow your food. [41 footnotes] People will always trade and travel, but this can be regulated so that it is not destructive. [42 footnotes] Whatever one's opinion on trade it would be foolish to ignore the impacts or the long history of exploitation by wealthy countries of the poor: slavery, plantation economies, oil wars, and the IMF/World Bank fiascos. [43 footnotes]
SOCIO-ECONOMIC PRINCIPLES OF LOCALIZATION
Localization requires the prioritization of our efforts and resources to meeting the basic needs of all people in sustainable ways.
- Neighborhood : People ask what they can do or provide for one another, and they find answers that they and their place can afford. This is part charity and part economic. There is significant charity in just prices
- Subsistence: Everything needed locally cannot be produced locally. A viable neighborhood or community, like a viable farm, protects its own production capacities. It does not import products that it can produce for itself. And it does not export local products until local needs have been met
- Rural Support: Cities are wasteful and not sustainable
- Values of a New Economics: wisdom, interconnection, sustainability, caution, conservation, sharing, "enoughness," and Earth and community-centered
- Prioritization of small farm, low-input agriculture and regional self-reliance
- Protectionism that is socially just and ecologically sound protects local producers and natural resources : soils, streams, lakes, reefs, estuaries and forests
- Support for subsistence farmers including crop subsidies
- The Precautionary Principle: Place burden of proof on those who argue that a proposed activity will not cause significant harm. Decision-making must address the cumulative longterm and indirect consequences of human activities. Adopt patterns of production, consumption and reproduction that safeguard Earth's regenerative capacities, human rights and community wellbeing. Rely on renewable energy. Internalize the FULL environmental and social costs of goods and services in prices. Provide universal health care. (Earth Charter)
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TWO COMPETING VISIONS: EXAMPLES
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Modern Global Economics
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The Economics of Localism and Rural Rejuvenation
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a. Urban bias [mega-cities]
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a. Rural support
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b. Technology dependence
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b. Wisdom, interconnection and sustainability
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c. Risk taking
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c. Caution and conservation
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d. Synthetic and artificial
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d. Natural and recycled
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e. Fast-paced and hectic
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e. Leisurely and rural-paced crop cycle (seasonal orientation)
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f. Concentration of wealth, power and land.
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f. Egalitarian, broad distribution of income/power
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g. Short-term profits
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g. Long-term yields
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h. Scarcity and Hoarding
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h. Sharing and enoughness
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i. Self-centered
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i. Earth and community centered
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j. Mass-Society-Mass-Consumption-Culture
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j. Diversity, tolerance and respect for cultural uniqueness
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POLITICAL ECONOMY
Markets and democracy are only good things when they work together. A democratic society keeps markets functional and serving human and community needs and security. A democratic government regulates any problems caused by imperfect markets. The safest way to do this is to keep all the market players of similar size, knowledge and security. [44 footnotes] Complex markets or complicated choices for a democracy make it likely that prudence is lost among poor information and the rush of events. The experiments with participatory budgeting in Grande do Sul, Brazil (a state of 11 million people) suggest that average people can solve these problems simultaneously. [45 footnotes]
Solidarity Economics, Localization and Regional Cooperative Integration
The Solidarity Economics model of the Latin American COLACOT group is part of the goal that the left in Latin America should aim for. Their program includes:
Solidarity, cooperation, and democracy as norms that all people and organizations follow to be part of the Solidarity Economy; the importance of labor and the dignity of workers; an increase in social ownership and worker control of enterprises; and the construction of a social state, which encourages a mixed economic structure in which the solidarity sector, the state sector and the market sector all fulfill their functions according to the demands of human development. [46 footnotes]
Though designed for Colombia, the full COLACOT document contains extensive analysis of the problems and policy choices that face any left government in Latin America.
The key to any left program will be a new type of participatory local democracy, like the examples from Porto Alegre and 100 other Brazilian communities [43 footnotes]. Also relevant is the knowledge that people are gaining from the collapse of Argentina and now Uruguay, Paraguay, Colombia… The formation of new organizations of civil society, like the Unemployed Piqueteros and the Popular Assemblies of neighborhoods, communities and regions, dramatically illustrates the creativity of the people - and a wide-spread yearning for _expression and popular involvement. [47 footnotes]. Groups in Caracas, Venezuela are also practicing grassroots community improvement in the poor slums of a potential coastal megacity [48 footnotes].
CONCLUSIONS AND NEW DIRECTIONS
This paper seeks to define economics and the economics of localization. The political challenges to introducing these programs are substantial.
There is hope in South America because there is passionate anger that has a clear focus: the rich elite and the foreign imposed neoliberalism. It also has a clear goal: popular economic and social policies that retain local control and sharing of the benefits or traumas of the changes ahead. Corruption, waste and phony representative democracy will no longer be tolerated or even allowed. If development, aid and civic society groups from the region and the world unite behind the IAPE and the participatory and solidarity platforms of Lula and other reformers then a dramatic change will blossom across Latin America and beyond. If consensus is split or sufficient mobilization fails to develop then a long struggle lies ahead and precious time and lives will be lost.
We all know what needs to be done as illustrated in this article and its many supporters and citations. The question is political and moral: do we have the will and the conviction to do the right thing - or will we surrender to apathy and allow the corporations their final victory.
At the Rio+10 Earth Summit in Johannesburg the corporations and the energy gluttons of the world - orchestrated by the US - committed global terrorism and smashed hope of a peaceful or rational transition to a sustainable world. Those who struggle to avoid a total meltdown of this planet must unite, fashion new weapons of analysis and common-sense discourse and seize opportunities that present themselves. [49 footnotes]
– Marcel Idels
CONNECTING ISSUES: The US-Imposed Drug
War-Eco-War-Corrupt Economic Exploitation.
CONNECTING PEOPLE: Students, Workers, Asambleas Populares,
Unemployed and Landless.
CONNECTING VOICES: Workshops, Research and Publications
SHORT LIST OF PUBLICATIONS: Ecosolidarity Andes
1. "Crossroads of War and Biodiversity;" Covert Action
Quarterly, No. 68, 1999.
2. "CIA Cocaine Death Squads;" Earth First!
Journal, Mabon, 1999.
3. "The Bush Dark Age Begins;" Editorial, Earth
First! Journal, Samhain, 2001.
4. "Andes on Fire;" Bluegreenearth, March 2002;
Anncol
5. "Fair Trade: Reality; Colombian
Farmers;" Peaceworks, April 2002
6. "Political Economy of a Narco-Terror
State: Colombia and Corporate Profits;"
Z magazine, October 2002; Znet; Anncol,
Bluegreenearth.
7. "The New Latin America and US Lies: Colombia
and the Keys to Lies,"
Buegreenearth.com, November 2002.
8. "Fair Trials for Heinous Outlaws ?" Anncol.com,
November, 2002;
Anncol
9. Transitions in Conflict Part II: Conflict and
Transition to Sustainablility. The Political Economy of Economic Collapse and Social Solidarity.
10. The Shot Not Heard Around The World: Pain in
the Andes, Anncol, December 2002
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