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If hometown business enthusiast Michael Shuman has his crystal ball in working order, we now know where global insecurities about pandemics, terrorism and scarcity in the new century lead.
The affluence of the 1950s spawned prophecies about the end of ideology the collapse of the Soviet Union in the 80s led to predictions of the end of history mass layoffs at giant corporations in the 90s forecast the end of work.
But in this epoch, Shuman says, all the indices foretell nothing less than the end of Wal-Mart, a prognosis more likely to come true than all the others.
At the invitation of Green Enterprise Toronto, the local branch of Business Alliance for a Local Living Economy (BALLE), the Washington-based economist addressed a Toronto audience in late June, just prior to the release of his latest book, The Small-Mart Revolution: How Local Businesses Are Beating The Global Competition.
As local businesses learn they have nothing to lose but their chain stores and start fighting back, Shuman says we will witness “an epochal struggle between two dramatically different visions of capitalism, the outcome of which will define many interesting and important years of history to come.”
Shuman, the orchestrator of a number of local economic projects and a founder of BALLE, calls the conflicting visions Tina and Lois. Tina is short for global corporations that maintain that There Is No Alternative to the placeless way they do business, versus the Local Ownership and Import Substitution folks who stick with the people in their ‘hood.
Lois offers a local anesthetic to a lot of unnecessary pain and turmoil in a turbulent world. In an age when cheap conventional petroleum is burning fast, fuel prices will level the playing field for businesses with local connections. In an era when water is scarce, water-intensive ag exports don’t seem so wise any more.
At a time when overcrowding of animals and people creates wildfire zones for the spread of contagious disease, it becomes madness to permit meat exports. Think avian flu.
When power lines can be snipped by trees or terrorists who fall out of the sky, long-distant power makes little sense. When planners and politicians take these issues seriously and start looking closer to home for basic necessities such as food, water and energy, the case for what Shuman calls “Jurassic economic development” falls apart.
“Dependence holds a community hostage to mistakes, misdeeds and misfortunes totally outside its control,” he says. Lois companies already account for the great majority of jobs in a modern post-industrial economy, he points out. Think of the butchers, bakers, candlestick makers, cleaning men and women, renovators, landscapers, main-street retailers, childcare workers, nannies, bookkeepers, volunteers, housekeepers, mom-and-pop grocers who do the heavy lifting of day-to-day life and taxpaying.
The multiplier effect is the secret weapon of small and local business, since it creates about three times more local wealth and employment than distant firms that take local dollars and export the multiplier effect elsewhere. Against that background, the “penny wise and pound foolish” tactic of saving a few pennies or dollars by buying from, or putting public subsidies into, distant corporations becomes local self-abuse.
Making the decision to give a few breaks to local businesses will be hard for government planners, policy analysts and program managers. The U.S. pork barrel amounts to about $110 billion a year in government giveaways that lure distant corporations to please stay around, Shuman calculates.
By my guesstimate, a proportionate amount of subsidies goes out the door in Canada, albeit usually disguised as invisible hand-ups rather than visible handouts.
To give one example, there is no reward to local dairies and juicers who sell products in thick recyclable bottles and thereby avoid garbage costs. And there is no penalty for long-distance dairies and juicers that sell in single-use tetrapak and plastic containers that are recycled or landfilled by taxpayers at great expense.
U.S. and Canadian federal and regional governments both wrap an invisibility cloak around subsidies that prop up giant, nomadic corporations by forcing taxpayers to foot the bill for highways that carry all those long-distant goods.
An equally invisibilized subsidy to the nomads comes in the form of weak federal and regional laws protecting worker rights and minimum wages, the purchasing power of which has been allowed to slip in both countries by as much as 40 per cent since the 1960s.
Looking at their own modest incomes, small local businesses usually resist minimum-wage protection for their staff, because they fail to see that decent wages are key to their competitive advantage against the big guys.
“The living wage is to Wal-Mart what kryptonite was to Superman,” Shuman argues, since the nomads can’t function without reserves of cheap, de-skilled and casual labour.
It’s Shuman’s hope – and this is what makes his book a political manifesto – that the conflict between two ways of doing business will lead to the tilling of common ground between two seemingly diverse constituencies. These are independent businesses, now largely represented by ultra-conservative corporate lobbiestied to Tina firms, and progressives, tree huggers and cultural creatives who never felt entirely at home in the conventional left.
“Colour me neither red nor blue, but purple,” Shuman tells me.
His political odyssey started in 1976 when he dropped out of Stanford University to work with Friends of the Earth and campaign against nuclear power in California. The year-long fight ended in a major victory for anti-nukes that changed Shuman’s life.
“We felt this incredible jolt of power,” he says.
He’s been a positive energy guy ever since, even when he led the Washington-based Institute for Policy Studies, what he calls “the Jolly Roger of think tanks” during the 90s. He wrote Going Local: Creating Self-Reliant Communities In A Global Age almost immediately after leaving the institute in 97.
The rest is local history.
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