When Globalism Hits Home
Do you ever think about where your money goes after you buy something?
In a sort of classical scenario, your dollar ripples out through the community and actually has an amplified benefit on its health. I’m not sure I could explain the economic theory behind it, but it’s known as an economic multiplier. This dollar gets divided between profit, employee benefits and payroll, raw materials (or wholesale goods purchases), building maintenance, advertising, accounting, taxes, and so on. Every business providing a service or good that enables your purchase at that store takes a small cut, and your dollar helps to support many families and businesses in the process. When these people and businesses pay taxes, they in turn support police and fire departments, upkeep of city infrastructure like roads and power lines, hospitals, schools, and much more. The economic multiplier effect makes it possible for a community to be relatively stable and thrive, and it depends solely on the recirculation of money within a community.
When we introduce globalized corporations into the mix, however, things become perverted quickly. These companies are so large that governments can’t help but look at the expanded tax base and new jobs they represent. They’re often so dazzled by this, in fact, that they can do a lot of damage to their communities in wooing these behemoths. Large corporations are focused almost exclusively on profits and shareholder return, to the extent that they will often even break the law because paying fines is cheaper than doing things legally. In retail situations, these stores usually move into town with the intention of taking market share from other businesses in the area, usually by competing on the basis of price. This would be excusable if they didn’t also push so hard to hold down costs that they engaged in ugly employment practices, paying much lower wages than competitors and actively maintaining high turnover levels to make sure they don’t have to pay a workforce that has seniority. Since they don’t use the services or products of other local businesses, these accountants, advertising outlets, and other services quickly starve as the new store seizes market share.
In all cases, such large corporations search ceaselessly for the optimal economic situation for themselves. If taxes or property values go up too much in their location, they’ll often close that location of simply move to another town. When this happens, the same governments who were star-struck at the thought of so many new jobs and so much more tax revenue are faced with a large vacuum. The city has expanded its infrastructure to accommodate the new demands of the company, including new police and fire stations, new schools, more miles of roads and utilities. However, when the company leaves town, the city now has to continue supporting a now-bloated infrastructure using a tremendously reduced revenue stream. If the company was a retailer, the downtown is probably dead, hollowed out by the predatory marketing practices and centralized, remote services used by the now-departed retailer. In any case, the mobility of the company has far outstripped that of its former local employees, who now find themselves dependent on social programs in an overburdened city. This sort of departure represents a shock to the local job market, and many of the people who rushed to new jobs when the company came to town are now left with bleak prospects.
I know this is going to be hard to believe, but I didn’t write these three posts on the importance of localism out of negativity or some sort of fatalistic view of the world. Nothing could be further from the truth. Over the past couple of years, the things I’ve read about the environment, our dependence on oil, and the modern American political system have led me into this cyclical near-depressive funk. At times, I really didn’t know what to think about my own prospects for the future, living in what could easily become a crumbling society and a barren landscape. Believe it or not, I tend to have this strong conviction that personal effort can overcome nearly anything. Suffice it to say that in the past couple years, I’ve gotten a look at a monster so big it made me question this conviction.
The silver lining to all of this bleakness is that we have a path out of the gloom. By turning our attentions toward building rich, strong local communities we can reduce our dependence on oil, stop the rape of our economy and wholesale export of our meager wealth, and come to realize the consequences of our actions on the environment. In short, we don’t have to live like this. We can vote with our hard-earned dollars. We can spend a little effort finding and patronizing those businesses that are healthy for our communities. Most of us spend our days pursuing mindless consumption, with some sort of misplaced hope that the next thing or level of income is all we need to be happy. Then, when we get it, we realize that, no, it’s that next one that we really need. And on and on.
They say that life is what happens while you’re making plans. Look around you, don’t you wonder why you don’t really know your neighbors? I have a strong dislike for the place where I live, and I’ve spent a lot of time convincing myself that it’s because of the commercialism and attitudes to be found here. However, one thing I’ve learned in about the last year is that the community I’ve been longing for exists even here; I just have to actively seek it out. This is one thing I think we’re starting to forget as Americans: life isn’t passive, and happiness doesn’t just come floating down the river, buoyed by ad campaigns. We have to seek it out. We have to care. We have to choose the life and community we want, and then make as much of our effort count for building those things as we can.
I was almost beaten into quitting on this post by the sheer negativity of the things that happen in typical cities…these things that I see happening here, and in Kansas, where I grew up. These terrible things are not inevitable. More people need to know what’s going on around them, and then we all need to make a conscious choice about the type of world we want to live in.