Economists and politicians have been lauding the benefits of globalization and open markets for many years now. Undoubtedly, the consolidation of supply chains, the availability of cheap labor and products, the advantages of export-based specialization, the lowering of trade barriers, and the integration of markets have greatly benefitted those who could ride the wave of globalized markets. But for many localities, it has meant the loss of jobs and wealth, environmental degradation, increased social inequities, the decrease of competition due to the monopolization of industries, and persistent economic marginalization of those unable to participate economically. Taking a very different approach to wealth accumulation, LE advocates for local economic self-reliance as a way to maximize a locality’s ability to meet its local needs.
Local self-reliance does not foolishly assume that every locality in the world has an ample supply of resources to become entirely self-sufficient. However, it does urge communities to utilize their resources and capacity (material and human) in order to meet their own supply and demand. It recognizes the well-known economic concept that the more capital circulates locally, the greater the multiplier effect and hence, the more prosperous the community becomes. Non-local economic interchanges, on the other hand, result in the leakage of capital and resources as people take their wages and profits out of the community to invest elsewhere.
Key strategies for achieving local self-reliance include the encouragement of import substitution and local production, local ownership of business, and local hiring. By ramping up the local economy through this self-reliant approach, residents will be able to find jobs and spend their money locally and local businesses will be able to localize their capital flow by purchasing from each other. Further down the line, once this bottom-up economic approach creates prosperous localities, there will be greater scope for more trade and integration among equally healthy economic units. One day, a more equitable, ecologically sound, and stable global economy can be attained, built on the foundation of self-reliant communities.
Tags: decentralization, localization, local production, local capital, local hiring, import substitution, leakage, local labor, globalization