April 2004: On Acting Local

Some alternatives to corporate globalization are already working
April 1, 2004

It’s time to move on from analyzing what’s wrong. Let’s acknowledge that some solutions have been tried--and found working! We now know, as does the WTO, that its principles don’t work, not even for free enterprise and certainly not for the vast majority of the world’s people. The opponents of corporate globalization--whom the French call alter-globalists--have identified some characteristics they would like to see in a new and better global systems: inclusion, ecological sustainability, human-scale operation, and subsidiarity.

Subsidiarity--the localizing of activities--may be the key to divesting ourselves of both corporate control and U.S. imperialism. It requires decisions to be made at the lowest level of competent governing authority and assigns elsewhere only those which are more appropriately done by overarching organizations. Rather like reverse devolution. Subsidiarity in the governmental sphere, as in consociation, concentrates responsibility at the local level--the level of maximum activity and accessibility by citizens.

Localizing economic activity offers similar advantages. The International Forum on Globalization (IFG), in its Alternatives to Globalization, lists these advantages:

• It puts faces on corporations and allows the supporting communities greater opportunity to influence their operations.

• To the extent that enterprises are influenced by the community, it exemplifies democracy in action. “Corporate globalization is something done to people rather than by them,” says the IFG.

• It usually concerns small, locally-owned operations which buy and sell locally, avoiding rising transportation costs, both financial and environmental.

• It responds more readily to local consumers’ needs and demands over those of the export market. Import substitution should flourish, keeping profits and jobs at home.

• The shift from a goods-based economy to services also favours the local.

Inherent in such localization is diversification--of products and production, of distribution and dividends. Under the alternative regime proposed by the IFG, strict controls would apply to a corporation’s activities, including labour and environmental representation on its board; mechanisms for effective accounting to the community and for public participation in its policy-making; limits on takeovers of local businesses and on capital mobility out of the community; and guarantees that profits remain primarily local. The thrust here is to ensure that community values are respected. Localization alone will not guarantee this, but globalization will ensure that they won’t be!

Two models of localized economic activity incorporate many of these safeguards: 1) community economic development, and 2) co-operatives.

The former has been defined by Stewart Perry, in Communities on the Way, as “the purposively stimulated expansion in the number, variety, and in the strength of locally valued, locally based institutional processes.” It addresses identified needs within the community with an appropriate community-based response.

Community economic development (CED) is carried out through a coalition of neighbourhood residents, implementing a program of activities for the benefit of the community. The core democratically-controlled institution--the CDC or community development corporation

--may see its main business activity become an investment program for new or expanding enterprises.

CED has developed in both the United States and Canada as a response to declining employment, particularly in depressed communities. A highly successful example is that of New Dawn Enterprises in Cape Breton, Nova Scotia. Incorporated in 1976, it is the oldest CDC in Canada. Its activities include housing projects, long-term care facilities and services, a career college, and a volunteer resource centre.

Co-operatives--including credit unions or financial co-ops--have been a vital part of this country’s economic history. A co-op is defined by the International Cooperative Alliance as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” Its governing principles, established by the ICA, reflect these goals and the values of honesty, openness, social responsibility, and caring for others.

Criticism has been levelled at some co-ops in recent years, accusing them of being “no different from the banks” or other retail stores. Yet there are whole regions of Europe and India where co-ops comprise the majority of business organizations--but with a difference. The difference is that profit is not the only bottom line. Members may choose other dividends of benefit to the group or to the community. They own and operate their business collectively, a process that translates into a more humane and fair workplace.

Of great significance to co-op watchers in Canada is the recent inauguration of a Master’s program in Management for Cooperatives and Credit Unions. This is the first Master’s program to integrate co-op thought into every business issue and management skill. It is offered by Saint Mary’s University in Halifax, and counts students from across the globe in its first year’s enrolment. Along with business administration, they will address matters such as the difference between a worker co-op and a worker-focused one, how to identify and measure a co-op’s return on investment, how to integrate the social with the financial for accounting purposes, how to reduce the ecological footprint of an enterprise--in short, to capitalize fully on the co-op advantage.

This approach defies WTO basics, giving priority to domestic rather than export markets, to investment in production rather than financial speculation, and, above all else, to co-operation.

* * *

In accepting the 2003 Right Livelihood Award, the alternative Nobel Prize, Walden Bello clearly defined the economy’s proper place in society:

“The primordial principle is that, instead of the market driving society, the market must be--to use the image of the great Hungarian Social Democrat Karl Polanyi--"re-embedded” in society and governed by the overarching values of community, solidarity, justice, and equity.”

The process of change starts at street level. And it seems to be well under-way.


(Judy Kennedy -- [email protected] -- is a retired lawyer and social activist who resides in the Annapolis Valley of Nova Scotia.)