By Brian Carnell

Thursday, December 4, 2003

The last thing I expect to read is a semi-coherent opinion piece by George Monbiot, but lo and behold he managed to churn one out in September in a piece criticizing the cult of localism that seems to have sprung up among some anti-globalist Leftists and Greens.

Monbiot opened his article by noting that what the developing world needs is "fair trade" (we'll skip for the moment the numerous problems with this idea). But some on the Left would reject even that idea, favoring an extreme form of localism which would pretty much halt all trade.

Monbiot wrote,

Few people in the rich world now admit that they wish drastically to reduce the value of exports from the poor nations, but several prominent campaigners are promoting policies which lead to this outcome. When, in June, I suggested that "localization" (the proposal that everything which can be produced locally should be produced locally) would damage the interests of poorer nations, Dr Spencer Fitz-Gibbon, the press officer of the Green party, sent me a furious letter of complaint. Localization, he insisted, would help the poor by permitting them to be self-reliant and by reducing trade's contribution to climate change. "We are advocating a world of relatively balanced, relatively self-reliant economies. That ultimately means the poorer country manufacturing its own frying pans and computers and pencils." It sounds sensible and obvious, until you take a moment to examine the implications.

. . .

Just as dangerously, while self-reliance may be feasible for the richer nations, most of the poorer countries simply do not possess a domestic market of sufficient size to make the manufacturing of complex products worthwhile. Suggest to an Ethiopian economist that her nation should have a computing industry of its own, serving only its own market, and she would laugh in your face. Because the market is small, each computer would cost many times as much as those produced in the rich world. Their comparative purchasing power would then become even weaker, and the technology they wanted would fall still further out of reach. If Ethiopian businesses, hospitals and universities were to be viable, they would have to import their computers from abroad, as they do today.

For this they would require foreign exchange. But, under the Green party's system, they would find it even harder to obtain than they do at present, for the rich world will also have been striving for (and will be far likelier to obtain) self-reliance in manufacturing. The blindingly obvious result is that the only products the poor countries can then sell to the rich ones are raw materials.

Who would have imagined Monbiot sounding like a latter day Adam Smith with all this talk of comparative advantage? There might be hope for him yet.

The fundamental problem with the global trade today is that rich countries insist on resorting to protectionism in its various guises while hypocritically insisting that poor countries adhere to a system of free markets -- ironically a system supported by politicians and interest groups who are generally on the Left.

Rather than punishing African farmers, Vietnamese textile workers and Russian steel workers, the developed world should take the single biggest step it could toward helping the developing world achieve the sort of economic success that those of us fortunate enough to live in wealthy countries have enjoyed -- tear down those trade barriers.

Source:

The myth of localism. George Monbiot, Guardian UK, September 9, 2003.

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