July 23, 2017

The Great Takeover and its reversal

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Published as chapter 26 of The Case Against the the Global Economy, Sierra Club Books, 1996, under the title “The last word – a personal commentary”.

Original note: There are no cosmetic solutions to the problems that confront us. They are the inevitable consequences of economic growth or development and in particular its globalisation which is the logical extension of this process to the world as a whole. Its main feature is that it involves the systematic takeover partly by the state but increasingly by ever-more powerful corporations of all those functions that throughout our tenancy of this planet have been fulfilled at a family and community level.

   The author tries to show that it is unfortunately only at these levels, that is, within the context of the ‘social economy’, that these junctions can he effectively fulfilled. This, particularly is true of democratic government and this is one of the main reasons why the economy must be localised, for only in this way can it provide the necessary economic infrastructure for the resurgence of healthy families and communities. For the author there is no other means of recreating a just and sustainable world, or even of assuring human survival on an increasingly beleaguered planet.


The development of the global economy, which has been institutionalised with the signing of the GATT Uruguay Round and the setting up of the WTO will, we were assured, usher in an era of unprecedented prosperity for all. However, as the contributors to this book have sought to show, this assertion is based on no serious considerations of any kind. On the contrary, it can only lead for most of humanity to an unprecedented increase in general insecurity, unemployment, poverty, disease, malnutrition and environmental disruption.

It is difficult for those who have had a modern education to understand why this must be so. We have all been taught that economic development, measured by an ever-increasing GNP, is the key to world prosperity and human well being. Hence, all possible efforts must be made to maximise GNP, which means Investing as much as possible in scientific and technological innovation, and making sure that the whole development enterprise is managed by ever larger and more ‘efficient’ corporations that cater for an ever bigger and ‘freer’ market.

However, this is precisely what we have been doing in the last 50 years, during which time development has been the overriding goal of governments throughout the world. Trillions of dollars have already been poured into development schemes by multinational development banks, bilateral aid agencies and private enterprises. Revolutionary new technologies have transformed agriculture, industry and services alike. Tariffs have been drastically reduced, and small companies, catering for the domestic economy, have been systematically replaced by vast transnational corporations (TNCs) catering for an ever expanding world market.

World GNP, as a result, has increased by sixfold and world trade by twelvefold. If conventional wisdom were right, then the world should have been transformed into a veritable paradise. Poverty, unemployment, malnutrition, homelessness, disease and environmental disruption should be but vague memories of our barbaric and underdeveloped past. Needless to say, the opposite is true. Never have these problems become more serious and more widespread.

By setting up the WTO, of course, governments are further accelerating the process of global economic development by removing all conceivable constraints on trade, and indeed on just about all the activities of the trans-national corporations that control it, regardless of social, ecological and moral implications. In other words, instead of accepting the incontrovertible empirical evidence that this policy can only increase the problems we face today, governments, under pressure from the transnational corporations, insist in pursuing it still further.

If we are really to solve these problems, as in their hearts, most people must clearly realise, society must follow the very opposite path. Instead of seeking to create a single global economy, controlled by vast and ever less controllable transnational corporations, we should create a diversity of loosely linked, community-based economies, managed by much smaller companies that cater above all (though clearly not exclusively) for local or regional markets. In other words, it is not economic globalisation that we should aim for but economic localisation.

In saying this, I am, in effect, calling for a reversal of economic globalisation and indeed of the very process of economic development, of which globalisation is but the logical conclusion. But this does not mean reconstituting the past. We have been indelibly marked by the experience of the industrial era, and the local economies that we will seek to create cannot be slavish imitations of those that previously existed. However, since, until recently, economies have always been largely localised, their experience must clearly be seriously considered.

To understand why economic development, leading as it must eventually do to economic globalisation, must be reversed, means looking very much more carefully at what it really involves and what are its inevitable implications. For perhaps as much as 95 percent of our tenancy of this planet, all those functions that today are fulfilled by the state and the corporations were once fulfilled by the family, or perhaps more precisely by the household and the community:

  • The household produced most of its food, though the more demanding tasks involved co-operation between households and sometimes by the community as a whole. The household made most of its own clothes and other artefacts, and acquired those that it did not make itself from within the community. It brought up the young and looked after the old and the sick.
  • The community administered justice, maintained social order and ensured that the traditional religious ceremonies were properly performed. It was thus largely self-sufficient and, indeed, self-governing.

Jeremy Rifkin refers to Labour historian Harry Braverman, who tells us that in the US as late as 1890, even those families living in highly industrialised regions, such as the coal and steel communities of Pennsylvania, were still producing virtually all of their food at home – over half the families raised their own poultry, livestock and vegetables, purchasing only potatoes at the market.

Of course, communities in New England were originally self-governing as well, as is amply testified by Alexis de Tocqueville in his Democracy in America; in parts of eastern France and in Switzerland, communities to a large extent still are self-governing today. [Layton, 1995]

David Korten refers to the largely non-monetised economy of the household and the community as “the social economy”. For him,

“social economies are by nature local, non-waged, non-monetised and non-market. Therefore, they are not counted in national income statistics, do not contribute to measured economic growth and are undervalued by policy-makers, who count only activities in the market economy as productive contributions to national output.”

But their function was more important than this. As Korten says,

“the very conduct of these activities serves to maintain the social bonds of trust and obligation, the ‘social capital’ of the community.” [Korten, 1994]

Korten also notes that

“a considerable proportion of economic growth in recent decades is simply a result of shifting functions from the social economy, where they are not counted in GNP, to the market economy, where they are.”

He might have added that this is what economic growth or development is all about. Thus, as it proceeds, food and clothes now have to be bought, the young are brought up in crèches, schools and universities, and which under the new regulations of the GATS are now to be privatised; the old and the sick are looked after in special homes and hospitals which are also now to be privatised; and so on.

In this way, all these and other critical functions are disembedded from their natural social context, commodified and increasingly privatised, and hence ever less available to the poor and the needy. In addition, in such conditions, the family and the community, stripped of their natural functions, can only atrophy and we get an atomised society made up of socially deprived and increasingly alienated people whose only remaining functions are to produce and consume.

If, until very recently, human families and communities were quite capable of looking after themselves without the intervention of any outside agencies, such as state institutions and corporations, so were the highly diverse ecosystems that make up the natural world, and it is largely on the inestimable benefits provided by their normal functioning and on those of the natural world as a whole, that human life and indeed the lives of all other living things have always depended.

As development proceeds, however, these critical functions are also taken over by the state and the corporations. Thus the nitrogen used to fertilise our land is increasingly produced at great cost in factories, rather than fixed by nitrogen-fixing bacteria on the roots of leguminous plants; and the water we use, instead of being stored for free in the aquifers beneath the forest floor, is increasingly stored in large, man-made reservoirs.

It is now even proposed by economists (and tame scientists concur) that, rather than cut down on emissions of greenhouse gases which are now on such a scale that the stability of world climate is overwhelmingly threatened, the Earth’s natural functions should be undertaken by vast geo-engineering schemes. Foremost among these schemes is a plan to site 50,000 100 square kilometre mirrors in space in order to reflect away the heat of the sun and keep the planet cool.

In other words, economic development is therefore not only the systematic shift to the formal monetised economy of the functions that were previously fulfilled for free by the ‘social economy’, but also a shift away from the “great economy” – as Wendell Berry refers to the economy of the natural world as a whole.

The consequences of such an enterprise are, of course, dramatic. It can only cause the demise of the social economy as the household and the community – its basic building blocks – are condemned to atrophy from want of use. It also signals the demise of the ‘great economy’ which must become ever less capable of fulfilling its natural functions, which, as I shall argue they alone are capable of fulfilling effectively and sustainably.

Community disintegration and its consequences

The family has, until recently, always been the basic unit of social life, but it has also been the extended family and included people who lived in the same household, though not necessarily blood relations. This is in contrast to the truncated nuclear family of the type we have today. What is more, the family of the past formed an integral part of the community within which all its members lived and worked – and into which it practically merged, rather than existing as an island of solidarity in a vast indifferent non-society, as it does today.

For this and similar reasons we should overcome our present prejudice against this irreplaceable institution, which we tend to see as tyrannical and claustrophobic, and whose virtues are only vaunted by heartless right-wing politicians, whose overriding policies – ironical as it may seem – can only lead to further social disintegration.

Much the same can be said for the community, which has also now fallen into disfavour. It is a basic, one might say natural, unit of social organisation – which it clearly, must be since we have lived in extended families and communities during the whole course of our biological, psychological and cognitive evolution. Alexis de Tocqueville, that great student of town democracy in New England, saw the community as natural, indeed God-given:

“Man may create kingdoms but the community seems to have sprung from the hand of God.” [A. de Tocqueville, 1981.]

Significantly, it seems to be only at the levels of the household and the community that most of the key social and economic functions can be effectively fulfilled – though, of course, to be able to do so these key social units must be sufficiently cohesive, imbued with the appropriate worldview, and in possession of the resources they require for fulfilling them.

Let us take an obvious example. One of the most serious problems our society faces today is a massive increase in all sorts of social aberrations, such as crime, delinquency, drug addiction, alcoholism and general violence. These problems are conspicuous by their absence in societies that have not been fully atomised. For instance, a visitor could walk in the poorest slums of Calcutta, where large numbers of people are homeless and sleep out on the pavement, in almost total security.

If this is so, it is largely that such people do not suffer from the terrible social deprivation that they do in an atomised society. They may be very poor and even hungry but the lives they lead within their family groups have meaning to them – which is ever less the case of the lives led by most people in the cities of the industrial world today.

In a traditional community, social order is also effectively maintained by an extremely powerful force: that of public opinion, reflecting traditional values -and crime and other social aberrations are reduced to a minimum.

We have been taught to regard the pressure of public opinion as an intolerable intrusion into our lives. One of the great advantages of becoming an anonymous inhabitant of a big modern city is that it ‘liberates’ us from the ‘tyranny of public opinion’ which imposes on us all sorts of obligations to our family, community, society and ecosystem.

But, no one has yet devised an alternative strategy for controlling crime and other aberrations, and hence for maintaining social order. The state can engage more and more policemen, spend billions on an ever more elaborate judicial system and build more and more prisons but all this has very little effect – and, in any case, it is but a means of masking the symptoms of a social disease, which by rendering a little more tolerable, such expedients can only serve to perpetuate.

Today, needless to say, as the global economy marginalises more and more people, this disease can only worsen and spread to those areas of the world that have succeeded, until now, in remaining relatively unaffected by it. Much the same can be said for the other serious problems that confront our modern society such as poverty, malnutrition, the annihilation our natural resources, the population explosion and so on.

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