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Regionalism: The Next Step for Globalization

by John Brian Shannon | June 7, 2016

Globalization was inevitable. Both the positives and negatives of globalization were inevitable. And we’re now moving into a more mature phase of globalization — a phase where common sense plays a much larger role.

After all, does it make more sense to import onions from thousands of miles away in Chile or Indonesia for example, or to grow them on the rooftop of your local big box grocery store?

Think of the CO2 emission savings alone as one way of many to demonstrate how unrestricted globalization works against our common good.

Globalization 3.0

Globalization 3.0 began around the year 2000 (with internet connectivity for large numbers of people and businesses) Image courtesy of www.intechopen.com Creative Commons Attribution License

For years I’ve talked-up the benefits of ‘Regionalism‘ where the largest share of goods and services are provided to consumers and business by producers and manufacturers within that economic or geographic region.

It’s not only in regards to fresh produce. With 3D printing and a regional facility ‘the latest thing’ can be manufactured in minutes, regionally, although the online order may have been received thousands of miles away — resulting in faster shipping and larger numbers of (regional) jobs, as opposed to the One Big Factory model, building ‘the latest thing’ in Shenzhen, China.

Of course it works both ways.

For Chinese consumers who want the latest Ford F-150 pickup truck, does it make sense to have one shipped from thousands of miles away in North America, or does it make more sense that Ford builds an assembly plant in China (and hires local workers) and fills orders from there?

I think there is still more growth to be milked out of globalization, but the next logical step is Regionalism which will cut costs, improve profits, and give consumers and business more and better choices. In high unemployment jurisdictions I would expect to see rates fall — perhaps dramatically, while low unemployment jurisdictions may see tiny improvements.

Although I agree with international trade agreements in principle, TPP seems excessively weighted toward corporate interests and not toward consumers or national sovereignty. For that reason I’m against it. The cloud of secrecy surrounding TPP certainly hasn’t helped. And the fact that someone of the rare and high calibre of Elizabeth Warren has doubts about it, tells me everything that I need to know about it. Full stop.

However, any trade agreement that enhances trade flows while enhancing national sovereignty and can show a distinct benefit to consumers and business alike should be aggressively pursued.

For me it isn’t about abandoning globalization, it’s about globalization reaching its full potential without destroying sovereignty, consumer trust, and entire segments of the economy.

It’s more about continuing to grow globalization (whenever that makes sense) and adding regionalism to the mix (wherever that makes more sense) and enhancing national sovereignty.

The day that Apple Computer is building iPhones in factories in every region of the world, that Ford Motor Company has assembly plants in every second country, every piece of clothing is manufactured regionally to the designer’s exact specifications, and most fresh produce is grown within 100 miles of its target consumer, that’s when we will see the maximum benefit from our investment in globalization.

We are where we are in regards to globalization and it has been a qualified success. But the potential of globalization + regionalism is one whole order of magnitude greater.

Related Article:

International Trade Agreements: Win-Win or Lose-Lose?

by John Brian Shannon | June 11, 2015

The secrecy surrounding these agreements is a complete non-starter for me.

The obsessive secrecy is enough to tell me everything about this being a corporatist agenda on the one hand — and a latter-day containment policy concerning China (or any country that crosses the U.S.A.) on the other.

It really muddles the difference between trade and governance as many commentators have said.

Elizabeth Warren, as usual, has it right; “If transparency would make it harder to sell the final product to the public, it raises serious questions about the desirability of what is being negotiated.” — Elizabeth Warren (paraphrased by Professor Dani Rodrik)

Yet, having said all of that, I’m strongly in favour of international trade agreements!

TTIP protest in London, UK

TTIP protesters in London, UK (Aug 2014)

What NAFTA could’ve been, vs. what it became

To this day I’m a strong proponent of NAFTA — but NAFTA had the potential to be so much more.

Instead, some of the more mediocre minds took over what was a grand overriding vision of peace, order, and good governance for all of North America — and one of the vehicles to help make that happen was the original NAFTA agreement, which was to be followed up by additional agreements, e.g. NAFTA II and NAFTA III.

But because it was handled so badly, the public mood turned against NAFTA and all talk of later NAFTA agreements were dropped like a stone

To state it a different way; The corporatist agenda greedily precluded the long term interests of North America.

And what did we get in exchange from corporations for opening up the North American market thereby allowing corporations to make additional billions per year?

They took their NAFTA windfall profits they had earned in North America to Asia, and 2/3rds of North American manufacturing jobs went to Asia, as well.

Thanks for that.

But it’s not the fault of corporations. They’re in business to make money for their shareholders — which increasingly, means the 1 percent.

To one person, the actions of these corporations might seem profoundly ungrateful to North America — while to another person, these corporations acted in their best interests.

It depends who you work for, I guess…

If you’re a person who works for 1 percent of the population, then this result is acceptable to you. If you’re a person who works for the 99 percent, then this is a wicked bit of business indeed.

Occupy Wall Street protests and other anti-corporate sentiments didn’t materialize out of thin air.

The Occupy movement happened because 99 percent of the population suddenly realized that both the corporations and government were ‘against’ the little guy — you know, the people who actually pay the bills and fight in wars — not the cabal of the 1 percent and their government acolytes

If we pass TTIP and TPP in a shroud of secrecy to further satisfy the corporatist agenda the #OWS protests will seem a minor historical disruption by comparison. (Just a friendly warning from someone who believes in trade agreements)

Some look for advantages between signatories of trade agreements

Which completely misses the point.

In the NAFTA example, many people were spending endless hours trying to decide if the NAFTA agreement benefited Canada? Did it benefit the U.S. more? Or perhaps Mexico was the main beneficiary?

NAFTA was about lowering barriers to improve the free flow of trade between the North American partners with the goal of making North American products and services more competitive in all respects — against other trading blocs or nations. Not against each other.

THAT is what NAFTA was about. Which many people missed originally, or have since forgotten.

It’s too bad that the subsequent windfall profits ended up strengthening the Asian economy instead of the North American economy where all of those profits had been earned

So; Are those corporations ‘traitors’ to North Americans — or are those corporations ‘heroes’ to their shareholders?

The answer is glaringly obvious.

If you’re a one percenter (or a government acolyte of the 1%) then these corporations were ‘doing their duty to shareholders’ under legal boundaries set by government policymakers and financial regulators, even though the optics look incredibly bad for both corporations and government policymakers.

If you’re a ninety-nine percenter you probably view these corporations as ‘traitors’ to North America — even though these corporations followed the letter of the law. Everything else is just spin for you.

A summary of NAFTA?

1. It could’ve been so much more.

2. The corporations made additional billions (maybe even trillions) due to NAFTA, and in that respect it scores a clear win for corporations — but they have lost much of the support and good will of ‘We the People’ in the process.

3. The additional revenue made by corporations due to the NAFTA agreement are now in China not doing a damn thing for the North American economy where those windfall NAFTA profits were earned, making NAFTA the third-largest transfer of wealth in modern history.

(a: The largest wealth transfer in modern history was from the Old world to the New world, b: the second-largest wealth transfer in modern history was from the West to the oil rich Kingdoms, since 1932)

4. NAFTA was a major instrument in the creation of the 1 percent and the societal problems that have since flowed from rising inequality.

Unprecedented in modern history, the 1 percent own more wealth than 1/2 of the world’s population and by 2030 the 1 percent will own 3/4 of the world’s total wealth.

Leaving only 1/4 of the world’s wealth for the 99 percent to exist on, going forward…

Can you say… inequality? Or how about… protest marches? This time with billions of protesters.

As productivity has only little room for improvement in the developed world, the only other factor to allow the present economic paradigm to continue is falling incomes for the 99 percent

If you don’t recognize that as a looming societal apocalypse, you’re not an economist.

If you are an economist, I apologize in advance for your nightmares.

It looks like it’s up to citizens to stop policies that are clearly skewed to benefit the 1 percent and are increasingly detrimental to the 99 percent.

Recommended reading:

International Free Trade Agreements: Blessing and Curse

by John Brian Shannon | October 13, 2014

International free trade deals are the sexy new thing for world governments.

From the U.S. and Canada, to Europe, China and Japan, trade negotiations are taking place with the goal of lowering barriers to international trade and thereby increasing economic growth. Which could be reasonably argued, is a very good thing.

But as is often the case, the devil is in the details.

TTIP protest in London, UK

Trans-Atlantic Trade and Investment Partnership (TTIP) protest in London, UK October 2014. Image courtesy of AP

Few people have trouble with free trade agreements that are negotiated in good faith and which serve our national interest by lowering the price of goods for consumers — while simultaneously increasing our ability to profitably export to other nations.

In principle, this is a fine idea in a world that’s rapidly becoming smaller. The essence of free trade is so logical, so timely, it’s difficult to argue against it.

Yet TPP and TTIP appear to be one-sided

The problem isn’t that China has better negotiators than Canada. Nor is it that the Americans are more skilled negotiators than the EU negotiators. Nor is it any bloc gaining unfair advantage against any other country or bloc.

What has occurred is that multinational corporations will gain generous clauses, stacking the deck in favour of corporations, so as to infringe on the sovereignty of nations and the rights of citizens and workers.

These unprecedented privileges afforded to corporations will help corporations exert veiled or overt control over our governments, our defence establishment, and on citizens and workers. It’s so prone to abuse that it will get worse over time, no doubt about it.

We didn’t elect our politicians to hand the keys of the country to foreign corporations

If TPP and it’s cousin the TTIP aren’t fixed soon, nations will have surrendered much hard-won sovereignty to the often faceless, ever-changing, and unelected executives of the world’s multinationals. Nations which lost hundreds of thousands of soldiers and citizens in WWI, WWII, the Cold War, the Korean War, the Viet Nam War and other 20th-century wars will have handed over much of what we and they have paid dearly for… to unaccountable and (sometimes) foreign corporations.

We fought those wars to guarantee our sovereignty and we won. Shall we now hand our winnings to multinational corporations?

Not that I have anything against corporations. They’re a part of our modern world. Without them, we’d live with much-reduced technology, less convenience, and every jurisdiction would need their own butcher, baker, and candlestick maker — and everything else for that matter.

Not to mention that each local auto dealership would need a tiny manufacturing plant out back, where each car would be built on a per order basis. Your car would cost $100,000 and take two weeks to build, and you would have to pay for it in cash, and in advance, without multinational auto manufacturers and multinational banks, and reliability might not be as stellar as today’s mass produced cars.

Similar would be the case for your cellphone, computer, home appliances, etc. (You’d need to pay in advance, and those things would be built and warranted by a local manufacturer, non-uniform quality might be a problem, and higher and non-uniform pricing would be a national irritant)

Without multinational corporations it’s safe to say that prices would rise and some goods may not be profitable in some markets. Meaning; Not available

Would northerner’s have fresh lettuce in the winter months without multinationals?

Maybe, but growing produce in northern greenhouses in the winter months is more costly than growing vast quantities of it in the south and then shipping it north.

The benefit of large-scale production that only multinationals can manage is that lower and more uniform pricing is the result. Aside from exchange rates, the price and quality of lettuce is pretty much the same across North America due to the large-scale production and shipping methods of agricultural and transportation multinationals.

We survived for thousands of years without multinational corporations and we could do so again if the need arose. They’re not as indispensable as they would like us to believe. Some countries operate without them or have only limited interaction with them.

But they do allow us more variety in the marketplace, lower and more uniform prices, uniform levels of quality, access to financing via multinational banking syndicates and year-round agricultural products.

So, mostly good. Until they try to take our countries on the sly

One of the major definitions of sovereignty is that nation-states have the right to create and pass legislation pertinent to their country.

In Canada, the country I live in, it has historically been the right of various levels of government to pass laws governing the actions of people, corporations, and of the government itself. Here, there are three levels of government, federal, provincial and municipal and most nations have parallel arrangements.

Notice the part where I mentioned the government can pass laws to regulate corporations?

In Canada, corporations can be regulated by three different levels of government. Which is a hassle for corporations as they must occasionally meet the regulations of all three levels of government. This is to protect the rights of citizens and workers.

Let’s say that I live in a small town and a large corporation wants to build a nuclear power plant next door. They want to buy many of the homes in the neighbourhood, tear them down, and install a nuclear power plant thirty feet from where I live.

They can’t do that in Canada because this is a developed nation and Canadian citizens have rights. All three levels of government would come together to stop such a plan from getting past the drawing board.

If you live in a developed nation, your town or city would likewise intervene if a corporation tried such a stunt. The government works for the people to prevent inappropriate development from occurring. Just one of the benefits of living in a developed nation.

But with the proposed free trade agreements governments will get sued by corporations for passing new laws or changing existing laws and regulations that could impact their operations. There is no legislation preventing the most frivolous of cases being brought against any level of government. Nor is there any limit to how many court cases (frivolous, or not) that corporations can bring against the government.

A profound change is about to hit our civilization — in ways we can’t yet imagine

Whether the corporations win every court battle or not may be completely irrelevant. If you represent a corporation you can choose to tie up the court system with challenges to new or changing laws — or merely threaten to tie up the court system with legal challenges. And of course, corporations can be quite active in the media with some owning entire media chains.

All of this could leave government employees (both elected and civil servants) afraid to do their jobs in case they, or their department, get sued by a foreign multinational corporation. Which has already happened.

At that point, we no longer live in a democracy

Hundreds of thousands of valiant men and women died in wars and in conflicts to defend our rights and freedoms. And they didn’t make the ultimate sacrifice so that neophyte trade negotiators or accomplices of the multinationals (choose your terminology) could hand over those hard-won rights and freedoms to a (possibly foreign-based) corporation.

It’s completely normal for corporations to want to diminish the power of governments as this gives them more latitude to operate and may increase profits.

The question is; Should we give them unique levers of power over our elected governments? Levers that citizens don’t have!

Again, it’s not that corporations are evil. It’s not that the people running corporations are evil. But corporations are in business to profit their shareholders, wherever those shareholders live in the world.

They’re not in business for the citizens nor should they pretend to be. Their industry is what matters to them, consequently, they have their own agendas which can conflict with national sovereignty, with the democratic rights of free people, with civil rights of citizens and worker rights.

Benito Mussolini created the word ‘fascism.’

He defined it as ‘the merging of the state and the corporation.’ He also said a more accurate word would be ‘corporatism.’

This was the definition in Webster’s up until 1987 when a corporation bought Webster’s and changed it to exclude any mention of corporations. — Adam McKay

See what I mean?

Corporations aren’t in business for us! They’re in business to make a profit for their shareholders — and while that’s not a bad thing — it can conflict with the role of governments, with the rights of citizens, and of workers.

Conversely, governments exist to protect national sovereignty, democratic rights, the civil rights of their citizens, and worker rights.

Cut to today’s Western economies…

The corporations don’t have to lobby the government anymore. They are the government. — Jim Hightower

Handing-off our hard-won rights and freedoms to corporations will not increase our rights and freedoms, nor does it strengthen our democracy — no matter what corporate spin is put on it.

We elect our leaders to guide and protect us from threats to our society. CEO’s of foreign corporations are not elected by our citizens, are not accountable to us, cannot be removed from office at elections, and can be faceless people moving among us, yet may soon have more power over us than the people we elect to protect our interests!

Not only that, but CEO’s tend to be nomadic by nature. If one CEO gets too much heat due to a particular policy or an unpopular project, they simply leave that corporation to become a CEO somewhere else — leaving the whole mess behind with little in the way of personal punishment.

Did firing the CEO of Exxon magically fix the Exxon Valdez oil spill? No. Did firing the CEO of BP magically fix the blowout in the Gulf of Mexico? Of course not. Did firing the CEO’s of major financial institutions in 2008 magically repair that damage to the economy and to the financial situation of millions of people? No.

All of them walked away from those situations and were simply hired somewhere else after a short vacation in some exotic locale. Not what you’d expect, yet it’s a common practice.

I’ll bet you can’t even remember the names of those CEO’s

If you or I commit gross errors or outright frauds which later cause untold economic or environmental damage we’d go to prison for life.

But if you’re a CEO, you get fired and you pick up your multimillion dollar bonus before you leave town on your way to a nice vacation spot. Then you settle in as a CEO of a corporation down the street from your old office. Just like that. See? No problem. Except for the truth that he or she might have destroyed the environment, or the economy, or people’s livelihoods — or all three.

In Andrew Jackson’s time 1767-1845, we were warned about the dangers of corporatism

Unless you become more watchful in your states and check the spirit of monopoly and thirst for exclusive privileges you will in the end find that… the control over your dearest interests has passed into the hands of these corporations. — Andrew Jackson
I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. — Thomas Jefferson

Both Andrew Jackson and Thomas Jefferson worried about too much power concentrated in the hands of too few industrialists, which is exactly what played out in the former Soviet Union — is now a concern in the West today — and was well expressed by such groups as the Occupy movement.

Cut to modern America…

Multinational corporations do control. They control the politicians. They control the media. They control the pattern of consumption, entertainment, thinking. They’re destroying the planet and laying the foundation for violent outbursts and racial division. — Governor Jerry Brown
If our elected leaders and their negotiators fail us, it could eventually change everything about our way of life. Whether they do it in cahoots with multinational corporations or will be outclassed in negotiations remains to be seen.

That’s almost irrelevant, however. What really matters is preventing corporations from unduly influencing elected politicians and civil servants so that our democracies become permanently stuck under the corporate thumb, our citizen rights and worker rights become weakened, and citizens and governments alike become mere extensions of multinational corporations.

That isn’t what millions fought and died for.