Bryant: Towards A Centripetal Economy
With the pandemic upending globalization, national economies should favor small- scale, local resilience.
At risk of stating the obvious, the COVID-19 pandemic wreaked havoc on the global economy. Trade volumes plunged in spring 2020, only to recover at a breakneck pace in the following months. Though the direct effects of the pandemic were short-lived, COVID-19 has played a supporting role in a tectonic shift of the global economy that began with the Great Recession. After the decades of “hyperglobalization” that followed the Second World War, the 2008 financial crisis sparked a reaction against the ever-globalizing world. In the West, economic nationalism gained a new popularity, especially in right-leaning political parties. In the U.S., we saw this trend in the 2012 Tea Party movement and more recently with Trump’s high-tariff presidency. The developing world was similarly disaffected by the Great Recession through the loss of foreign aid and private investment. This growing skepticism of globalization was only confirmed by the pandemic: The global economy can collapse with little warning, leaving its benefactors high and dry.
Where do we go from here? The past two decades have revealed the deep vulnerabilities in our international economic system, and yet we do not seek to improve upon it. As the global economy recovers from the pandemic, businesses and consumers have the opportunity to reframe their relationship with international markets, to reposition themselves with greater resiliency for the next crisis. In the face of this opportunity, our priorities must shift in favor of small-scale, local economic strength, while maintaining international markets only insofar as they support small-scale priorities.
On paper, this reprioritization makes plain common sense. According to textbook economics, people will trade goods and services only if it actually improves their individual, small-scale well being. The fact that global economic priorities have shifted away from individuals in the first place is cause for concern. Unfortunately, this shift in priorities is all too evident in international markets: Low-skilled workers in developed countries lose out to an ever-globalizing labor market, and agricultural producers in developing countries tie their wellbeing to the fickle fluctuations of global commodity prices. When the economy cannot perform its intended purpose — to make its individual participants better off — those participants must rethink their priorities. We need to return to that noblest of economic sensibilities that the free exchange of goods and services returns its benefits to those at the smallest scale: the individual worker and the individual consumer.
In the U.S., at least, the pandemic has necessitated a return to these principles. After decades of industrial offshoring, supply chain disruptions and COVID-19 lockdowns have incentivized the “onshoring” and “nearshoring” of U.S. industries. When supply chains are shorter, they are more resilient to world-upending crises like the pandemic.
They also keep the benefits of economic transactions local to their particular community and culture, binding communities together. Author and activist Wendell Berry wrote that, “A human community, if it is to last long, must exert a sort of centripetal force, holding … local memory in place.” The impulses of the modern global economy are entirely diffusive: They fling production and consumption to the ends of the Earth. The components of an iPhone, for example, come from at least 17 different countries. Berry sees the cultural loss implied by this centrifugal force: “A good community is, in other words, a good local economy.” When production and consumption are localized to a particular geography and culture, a centripetal force binds the region together. A community whose economic relationships are tight-knit also enjoys greater cultural health.
There are two things that this local emphasis does not imply. First, I do not advocate for protectionist trade policy, and I certainly do not advocate for the “America-first” economic sensibilities that dominate a portion of Republican party ideology. It is simplistic to assume that a nation’s economy exists on a one-dimensional spectrum: either globalist and without tariffs, or myopically local and completely protected from foreign competition. Rather, a country can relate to the global economy in a number of ways, leveraging the gains from international trade for a variety of purposes. I am not arguing for a shift away from trade, only for a reprioritization of local industry — and the resulting culture — over and against global concerns. After all, each of us is, first and foremost, a local creature. Why should we care about the state of something like the global economy if the neighborhoods we live in and the jobs we work are not healthy and resilient to crises?
Second, I recognize that global markets seem to provide resiliency against local crises like droughts, crop failures or industrial accidents. When a particular firm or local industry faces a crisis, goods from elsewhere in the world can provide stopgap support. Though the global market appears to be the hero of this scenario, it is also, in significant ways, the villain. Take, for example, the recent national baby formula shortage caused by a flood at a Michigan factory. This local incident metastasized into a national disaster because of the specialization caused by global markets: The majority of America’s baby formula was produced by one plant in one town. A local orientation in baby formula production would have many plants that serve specific regions of the country, thereby offering redundancy and resiliency if any one of the plants fails. In this sense, bigger is not always better. A perfectly integrated global market will transmit crises across the globe, whereas a series of smaller regional markets will provide a buffer against those crises.
The question remains: how do we achieve this local reorientation? It may well be the case that globalization damages local culture, but is there a better solution? To these questions, I have no magic wand. Mandating a local reorientation via tariff policy would only cause undue pain for all involved. Any long-lasting solution can only really come through a change in consumer preferences. The pandemic represents an opportunity to reorient our consumption towards local options, which are — at least for the moment — increasingly cost-effective compared to global goods.
Berry takes the long view with this solution. He understands that this local reorientation does not serve immediate financial interests, but rather fosters a set of economic conditions that will withstand the test of time. He compares the work of a local economy to that of a forest topsoil: It slowly collects leaves and pine needles, preserving local resources and, over time, returning those resources to the roots below. Soil, Berry wrote, “[does] in a passive way what a human community must do actively and thoughtfully.” A community must “build soil, and build that memory of itself — in lore and story and song — that will be its culture.” By maintaining a local economic orientation, a community preserves and regenerates those pieces of itself that are most valuable. A community must “build soil” in its day-to-day life, by buying and selling and recycling its resources over and again within itself. In doing so, it preserves a collective memory of culture that will last as surely as the trees stand.