by: The Localmart Advocate

       Globalization: the process of increasing interdependence and connectedness between the world’s economies, cultures, and populations. It’s characterized by the exchange of goods, services, technology, investment, people, and information across borders.
       While first major period of globalization of trade and finance began in about 1870, the most recent period began in 1989 and continues today. This has become very consequential in both the U.S. and other countries and has even begun to mold the political landscape in those countries.
       The case for free trade (an economic facilitator of globalization), was made as early as 1776 in Adam Smith’s book, “An Inquiry Into the Nature and Causes of the Wealth of Nations”. Using contemporary phraseology, he stated the Law of Absolute Advantage as follows:
Suppose that A makes widgets more efficiently than B, and B makes gadgets more efficiently than A. If A makes only widgets and B makes only gadgets and they then trade these between themselves, then the prosperity of both will be enhanced.
       As we in the U.S. began to make increasing purchases from Japan, Korea, Taiwan and then China and other countries, our own “widget” production in sections of the country cratered and the Rust Belt was created. Meanwhile, our importation of gadgets has ballooned to the point where our imports now exceed exports by nearly one trillion dollars annually. (Yes, that’s “tr” as in trillion.) To understand the extent of this disruption, simply view the country of origin of a sample of the products that you own or purchase and consider that 50 years ago, a similar sampling would indicate almost entirely U.S. made products.
The case for localization:
       From a purely economic perspective, it is difficult to dispute the simple logic of the Law of Absolute Advantage. However, if values other than economic and financial ones are considered, the situation is more nuanced. It is when we focus on effects at the community level that the disruption and even devastation of globalization can be seen. The closing of those widget factories did not just result in losses of jobs, but often on an individual level, a loss of self worth and a loss of sense of community. This was often accompanied by a general rise in societal ills in those communities.
Holistic commerce:
Holistic: Characterized by the belief that the parts of something are interconnected and can be explained only by reference to the whole.
       If we take a broader view of commerce to include a holistic dimension, the advantages of localization over globalization can become quite compelling. Returning production of goods to the local, community level holds the promise of reversing some of the adverse effects of globalization and might significantly help in regaining the sense of community that has been lost. As Localmart (Localmart.net) begins operation, it might start to play an important role in this process. Future posts to this blog will provide details.
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