Shop global, vote local

The demand for cheap goods and strong government might be too much

One of the catch cries of the environmental movement urges us to “think global, act local”. This slogan points to how our actions in our community can have an impact on a bigger scale. Paraphrasing this in the title of the blog refers to how the economic and political actions of some can work in opposite directions. When out shopping, we often get lured in by cheaper goods on offer thanks to globalization, while many are voting in opposition to the global economy that keeps prices down. With people being tugged in both directions, there might not be a way out.

From the consumer’s point of view, globalization has resulted in a bonanza in terms of a growing selection of goods at low prices. Everything from clothing to computers has benefited from production being coordinated on a global scale. Globalization can achieve more for less because it increases the size of the market for many businesses. In general, a larger number of goods being produced at one place will typically have lower costs. So it would be cheaper in most cases if goods can be produced in large quantities and then shipped around the world (especially if transport costs are low). This approach also means that production can be situated where it is most efficient rather than close to where the goods will be consumed.

The lower price tags for global goods means that we can buy more, but also that production for international markets is also likely to shrink. The reason being that higher levels of output acts as a spur for automation which involves more machinery and fewer workers relative to the output. Offshoring of manufacturing jobs and basic service-sector work has added to this trend within industrialized countries where the wages are higher than elsewhere. The result is that most people are global consumers to a certain extent, while fewer and fewer people provide goods for the global market.

On top of this, global jobs have increasingly become concentrated mainly in the cities, stripping many other places of high-paying work. The more the pay packets of the locals in such communities take a battering, the greater the attraction of the cheap products that globalization is good at offering up. Even though neighbourhood businesses are likely to suffer due to this, the government has little power to mitigate the impact especially as social solidarity is on the wane. It is not surprising then that many people left behind in the wake of these changes end up feeling powerless and abandoned. Not only have jobs disappeared but individuals have been left with few meaningful ways of contributing to the economy so as to earn a wage.

With the negative effects of globalization being concentrated in specific places, location has become a more important issue in politics. Many people see their own prosperity as closely tied to the economic wellbeing of their own neighbourhood. When this manifests itself in political terms, the nation state thus becomes the obvious flagpole to rally around for those on the economic backfoot. But this resurgence in patriotic sentiment has come with its own problems, and rather than providing solutions, has split society into rival camps that do little but bicker.

An obvious solution would be to get more people to “shop local” as promoted in many corners of the world. Although buying things from stores in your neighbourhood does help a bit, it matters more where the goods are produced (although lots of services are produced locally). The trend to buy locally source agricultural produce (particularly common among people in city who would tend to “vote global”) is a step up but unlikely to be substantial enough relative to the size of global economic flows.

If those who “vote local” can only afford to “shop global”, the situation seems more likely to get worse especially since the political system seems to offer little scope for improvement. Democracy would normally find a way to mediate between competing claims but the traditional split between left and right is not set up to cope with these issues. Instead, it is our politics that is also being cheapened by the division that globalization has wrought. And it is something for which we might have to pay a lot more for as the situation is only likely to deteriorate.