Globalisation, Localisation and Sustainable Livelihoods

Geoffrey Lawrence, Reidar Almas

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351760461
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This title was first published in 2002. One of the greatest concerns facing the world is how to ensure that sustainable outcomes are generated as globalization proceeds apace. Quite simply, many people are finding their life chances deteriorating - with resistance to globalization being a common response. The question is: is it possible to guarantee sustainable livelihoods for individuals, families and communities as global processes increasingly shape local social relations? This volume is a collection of 16 chapters from leading rural sociologists and human geographers based in Europe, Australasia, and the Americas. The book, in three parts, deals with globalization and food; the restructuring of local agriculture; and communities and resistance in a globalizing world. The introduction to the book compares and contrasts the various experiences of communities in countries such as Australia, Brazil, Finland, Norway, South Africa and the United States as they "struggle" to cope with globalization and its effects. Each chapter discusses options to ameliorate the local consequences of global change.

Part I
Globalization and Food

Chapter 1
Introduction: The Global/Local Problematic

Reidar Almås and Geoffrey Lawrence

The Meanings of Globalization

The nature and extent of the impacts of global processes on local communities and spaces is occupying the minds of researchers, from a variety of disciplines, throughout the world. Is globalization destroying local social systems? Is it creating opportunities for economic growth? Does it impact positively or negatively upon the natural environment? Is the nation state in a position to mould global forces to the advantage of its citizens, or is it complicit in the expansion of neoliberalism to enhance profit making among the corporate elite? Finally, can globalization be harnessed for the good of local people, and if so, how? These are but some of the issues being discussed by academics, policy makers and, perhaps more importantly, by members of local communities, in an effort both to understand, and to seek to derive benefits from, globalization.

For the purposes of this book we define globalization as a process through which time and space are ‘compressed’, as new technologies, information flows, trade, and power relations allow distant actions to have increased significance at the local level (Gray and Lawrence, 2001). We are observing, in other words, an increasing intensity – a widening, deepening and speeding up – of global and regional interactions (Held et al, 1999). What appears to be missing is a critical appreciation of the consequences. What we address in this book is the degree to which global processes are impacting upon local communities, the ways those impacts are occurring, and the extent to which global processes provide – or fail to provide – a basis for sustainable livelihoods, particularly in rural and regional communities.

In the early 1990s Ross and Trachte (1990, p.223) identified the activities of what were prototypical global firms – ones which viewed regions of the world as a ‘mosaic of differentiated sites of potential investment’ and which, because of their mobility, were actively disciplining both labor and the state. The authors recognized a reluctance on the part of the state to impose new taxes on these transnational firms, just as they recognized the state’s retreat from so-called welfare state policies in the face of possible declining investment from those companies.

Others, such as Drache and Gertler (1991), identified the creation of a policy environment in the 1990s in which businesses were able to move their capital around the world with minimal restriction, and where deregulation of the labour market was being viewed as crucial by both firms and by nation states as a basis for continued capital accumulation. Firms were competing globally and, as such, adopted new sophisticated and productivity-generating technologies as well as seeking ways to minimize labour costs and improve profits.

Teeple (1995) argued that a global regime had emerged from an earlier ‘international regime’. The international regime of capitalism had its beginnings in 16th Century trade between nations. Up to the Second World War such trade was reliant upon national capitals, controlled by nation states. The period from the Second World War to the 1970s represented an ‘interregnum between the age of competing imperial powers and the coming of the global economy’ (Teeple, 1995, p.57). The international regime following the war was one based on US hegemony – linked to the expansionary needs of US corporations. With the development of economies outside the US, there was a growing interdependence between nations, and between the branches of companies located within, and outside, specific nations. Regulatory and other mechanisms were set in place to liberalize world trade, contain socialism, promote legislation favourable to capitalist expansion, and to aggregate world markets.

The formation of the EC, NAFTA and other recent trade groupings can be viewed as part of market aggregation, something considered by Teeple (1995) as having been crucial for the promotion of free trade regimes in the 1980s and beyond. But global trade also represented a threat to the sovereignty of the state. The growth of corporate power had provided enough strength for capital to demand the dismantling of national barriers to trade. The growth of foreign capital and currency markets meant that economic decisions were being undertaken outside the context of the nation state. A ‘global’ system was seen to have evolved after 1970. Its features were the removal of tariff – and other – barriers to world trade, and the demise of US ‘paramountcy’ as corporate entities from Japan, Korea and other nations began their global spread in search of profits (Teeple, 1995).

It is undeniable that the growth in transnational corporations (TNCs) has continued apace since the 1970s. During the 1970s about 7,000 TNCs were in operation, but by the mid 1990s there were over 39,000 parent companies (with control over some 270,000 affiliates) and by the end of the century there were some 60,000 parent companies controlling 500,000 foreign affiliates. It is estimated that the parent companies and their affiliates contribute 25 per cent of the value of total world output (Paddon, 2001, p.98) and about two thirds of world trade (McMichael, 2000a, p.95), with the market value of individual corporations being greater than many nation states.

The corporations have understood well the profit making opportunities of intrafirm global trade. As McMichael (1995, p.90) has noted:

TNCs subdivide production sequences according to technological or labor skill levels. Moving labor-intensive activities to Third World export platforms is routine. Typically, high technologies remain monopolized by First World firms, with component processes (assembling, etching, and testing computer chips), component goods (pharmaceutical stock, engines, auto parts), and consumer goods (cameras, electronic games, TVs, and video-recorders) moved offshore for production in the Third World.

For McMichael (2000a) the so-called ‘globalization project’ is a coherent approach to corporate profit making, creating conditions where trade is organized on a world basis by a largely unaccountable political and economic elite. The latter groups act as a power bloc to ensure that producers and consumers are connected, across space and time, within a global marketplace – one increasingly regulated by supranational entities, such as the World Trade Organization (WTO). A neoliberalist discourse usually accompanies the new pattern of investment. It is one which highlights the social benefits of self-regulating markets, endorses the theory of comparative advantage, and lauds the prospects for entrepreneurialism to bring benefits to local economies (Gray and Lawrence, 2001). Its promise is the delivery of the products of global industry to all peoples, and the extension of democratic principles across the entire globe. But is this happening?

Capitalist development has been, and continues to be, uneven development (Held et al., 1999) and while some areas might be prospering, others are not. Communities are assigned particular roles in the global economy, with the orchestration of product manufacture and distribution occurring centrally by corporations and with local regions having to perform particular tasks as part of the overall global plan. Flows of finances and products have allowed TNCs to flourish at the same time as they have increased the economic instability – and vulnerability – at particular sites of production. The threat of capital withdrawal, in the context of the lack of control by the nation state over foreign firms, has eroded national sovereignty over domestic policy (Hamilton, 1996). For some regions (such as Asia in the 1970s and 1980s) the combination of profit-seeking TNCs in concert with a compliant state has meant the ‘unlocking’ of relatively cheap labour, and with it a raw and unforgiving form of economic development, often accompanied by environmental degradation (see Beck, 2000; Hamilton, 2001). For others it has meant the withdrawal of capital from economic activity once sanctioned under a corporatist mantle that saw labour engage with capital on a much stronger footing (McMichael, 2000a). Here, accompanying the removal of legislation that once provided for tripartite (business, labour, state) decision making in economic matters, has been the flight of capital – leaving workers with several choices: accept reduced wages and/or increase productivity, or lose jobs. Protest has also been an option, albeit one that has not necessarily advantaged the workers (see McMichael, 2000a). As Jones (2001, p. 13) and Gray and Lawrence (2001) have suggested, the typical policy mix adopted by states seeking to capture the transnational investment dollar has included:

• Internationalization of the economy via the lowering of barriers to foreign trade and investment;
• Deregulation and privatization of sectors formally controlled by the state;
• A movement away from Keynesian macro-economic policy to one of controlling inflation via monetary policy;
• A greater trust of unfettered market forces to resolve issues of resource distribution;
• Changes to industrial relations systems enhancing individual contracts and marginalizing unions;
• A winding back of ‘welfare state’ policies that provided both an improved ‘social wage’ and a safety net in the event of sickness and unemployment; and
• The lowering of taxes on corporate profits, capital gains and high incomes along with the implementation of ‘user pays’ principles for state-based services.

Jane Kelsey’s (1995) account of the so-called New Zealand Experiment implemented by a Labour government in 1984, and continued by a conservative National government throughout the 1990s provides dramatic evidence of the social and economic malaise that accompanied the policies above. Stagnation, recession, growing unemployment and social polarization were the main outcomes of policies aimed, ostensibly, at forging transnational connections with the New Zealand economy. Epp and Whitson (2001) argue that similar policies in Canada have been responsible for what they term the ‘writing off of the rural west’, while Pritchard and McManus (2000) describe contemporary rural Australia as a ‘land of discontent’ as a consequence of the destructive forces of rural restructuring under neoliberalism. As Jones (2001, p. 13) has commented:

In many countries, such measures served to shift socio-economic patterns of income, wealth, and life chances from a diamond shape (with a bulge in the middle signifying a large middle class) towards an hourglass shape (representing growing segments of haves and have-nots and a shrinking middle class).

The New Zealand economy, like that of many other nations adopting the economic rationalist policy framework described above, certainly received the foreign capital investment that had been anticipated. Despite its misshapen form, investment capital flowed in, increasing foreign ownership (Kelsey, 1995). But what of those nations unable to persuade capital to move to their shores? Castells (1996) has employed the telling phrase ‘structural irrelevance’ to describe those regions (such as many of the rural regions of nations such as India, China and Latin America) which have no likelihood of securing global capital. For Castells (1998) such structural irrelevance will be worse than any economic dependency that might have resulted from global investment. Hoogvelt (1997, p.240) describes the fate of those unable to enter into global circuits of investment and production:

Performing neither a productive function, nor presenting a potential consumer market in the present stage of high-tech information-driven capitalism, there is, for the moment, neither theory, world view, nor moral injunction, let alone a programme of action, to include them in universal progress. Developmentalism is dead, containment and exclusion rule OK!

It is the future of these regions which will, no doubt, occupy the minds of activists, planners and community members over coming decades, particularly if the outcome of containment and exclusion is political anarchy (Hoogvelt, 1997), the weakening of democracy (Beck, 2000) and the growth in the militancy of marginalized groups (Held et al., 1999; Waterman, 2001).

Global Meets Local

Perhaps as a result of the nebulous nature of the catchall term ‘globalization’, perhaps because of the complex nature of the social and economic arrangements that foster global/local interrelations, or perhaps because of the inability of social scientists to grasp the multiplicity of social forces that are both driving, and responding to, globalization, it remains that there is no clear understanding of the relationship between global change and local community viability. It is difficult to generalize. What can be stated, however, is that patterns of global/local interaction are changing and that we can trace such changes through an analysis of concrete social relations as evidenced in such things as employment and working conditions, industrial restructuring, local culture, and the environment.

Working conditions and industrial restructuring have been discussed briefly above. There is evidence that as globalization proceeds, wage workers experience job intensification and employment insecurity (Hoogvelt, 1997). According to McMichael (2000a) as transnational capital moves to low wage zones of the global economy, downward pressure is placed on workers’ salaries and benefits in other, more developed (and unionized), regions. The sequence is as follows: policies are put in place to entice capital to invest – usually meaning state concessions to capital including mechanisms to lower wages; lower, or stagnating, wage levels decrease purchasing power and reduce the capacity of the state to raise revenue; there is a reduction in public expenditure thereby removing part of the platform of support that workers and communities have won in previous struggles; wage workers experience a standard of living decline at the same time as corporate capital’s export expansions bring profits to shareholders. If and when the company finds it is more profitable to move to a cheaper location, it does so. In the meantime, it takes the opportunity of reminding the workers that they should not complain – at least they are in paid employment! This is part of the so-called ‘race to the bottom’ scenario for workers.

We should recall, however, that when jobs are exported to developing nations, there can be considerable benefits to those recipient regions. Such benefits include the challenge to feudal economic and social relations that impede the spreading of benefits to the poor (Seitz, 1995), increased employment opportunities, investment in local infrastructure and skill-based training. Women can enter the workforce, improving family income and women’s status (Mittelman, 1996). The WTO-promoted dismantling of trade barriers has the potential to give developing nations greater access to markets in the developed world (Legrain, 2001). Foreign capital can lean upon recalcitrant governments to improve education and to provide housing for workers. Expenditure by those in jobs can generate local industry – particularly knowledge intensive services (see Kanter, 1995). It is when paid work takes the form of exploitation and there is a clear violation of human rights that questions are raised about the supposed benefits that corporate investment brings (Barnet and Cavanagh, 1994). The question of the real beneficiaries of globalization must also be asked. As Legrain (2001, p.43) asserts:

Free trade is indeed a wonderful thing; it is a pity that rich countries do not practise what they preach. Not only do rich countries conspire to keep out poor countries’ main exports, agriculture and textiles, they are also busy carving up world markets through preferential pacts tha...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Figures and Tables
• Notes on Contributors
• Acknowledgements
• PART I: GLOBALIZATION AND FOOD
• PART II: THE RESTRUCTURING OF LOCAL AGRICULTURE
• PART III: COMMUNITIES AND RESISTANCE IN A GLOBALIZING WORLD
• Index