Policies for the City Region – serialised: Part 6, radical economic localisation

We continue the serialisation of our report, Policies for the City Region. In this  installment we explore the idea of “Economic Localisation” something that certainly distinguishes our approach from that of others suggesting policies for the city region.  And there’s plenty more to come!  But if you can’t wait: download it here. You can also see out policies page HERE and our publications page HERE.

5. Economic localisation

In the report that launched SSM we argued:

To meet the twin challenges of planetary limits and accelerating resource scarcity, we need to look at a strategy for re-localisation of the economy. This means arranging production, distribution, ownership of means of production/assets, trade and enterprise so that much more of the economy is localised within the city, and the surrounding bioregion.” p. 24.

Localise West Midlands defines localisation in terms of,

Local trading, using local businesses, materials and supply chains

  • Linking local needs to local resources

  • Development of community and local capacity

  • Decentralisation of appropriate democratic and economic power

  • Provision of services tailored to meet local needs.1

Localise WM’s extensive literature review2 found evidence that more localised economies had superior indices of return on investment, quality of life, jobs per capita, income equality, the local multiplier, job creation and unemployment reduction, and income growth.

Despite the evidence there seems little enthusiasm for a strategic localisation of the economy among orthodox economists and leaders. As we point out elsewhere,

The viable economy uses the concept of strategic localism which means that things that can be sourced locally should be. ……….This means not just playing to the strengths of local economies but actively building those strengths. It does not mean turning our back on the world, but playing a responsible part in the world while becoming locally more sufficient. Finally it means living in greater knowledge of our own bio-region, its strengths, its delights and its vulnerabilities. (p. 12)3

We therefore argue that a viable alternative economic strategy needs to include an explicit strategy for localisation4 as a way of stabilising and strengthening the local (viable) economy. There are already elements of localisation in existing strategies and the proffered alternatives: the need is to make localisation a cornerstone of the strategy which will also help in addressing the many other issues that challenge us.

  1. 5.1 Reduce reliance on long, vulnerable, global supply chains.

Policy 5.11: GMCA to adopt economic localisation as a policy aim and produce a localisation strategy.

The thinking behind it:

If re-localisation is a valid principle for a more resilient Greater Manchester that shares its wealth with its people and that treads lightly on the planet, then it is worth adopting as a strategic principle and aim together with the detailed strategic and implementation planning that will be necessary across all sectors. We suggest that a start is made on those sectors where imports could most easily be substituted locally and whose ecological footprint is the greatest. This therefore requires a combination of sound business economics together with ecological literacy.

Policy 5.12: Measure and monitor the scale of imports to the region.

The thinking behind it:

This follows from the previous point: we need to understand where we are now. What do we import, from where, with what consequences and with what risks?

Policy 5.13: Discourage wasteful trade contraflows (e.g. dairy products exported and imported).

The thinking behind it:

Product contraflows (our term) take at least two forms.

  1. Products (e.g. non-speciality cheese) are produced in area A and sold in area B while identical or equivalent products are produced in area B and sold in area A.

  2. A product (e.g. milk) is produced in area A, processed in area B and then taken back to area A for sale and consumption5.

Orthodox economic measures such as GDP and GVA are blind to this absurdly wasteful situation. Indeed cash value of (say) potatoes exported plus that for potatoes imported are both added to those measures, incentivising this unsustainability, something akin to pointlessly digging holes and filling them in in the name of economic activity. Policy incentives therefore need to be devised to make this situation less likely.

  1. 5.2 Work near home.

Our roads are clogged with traffic. People spend a significant part of their working day travelling. Moving people and vehicles around generates carbon emissions and air pollution. It is a pressure on incomes too.

Policy 5.2: For each institution, devise incentives for employees to live locally.

The thinking behind it:

This is an example of how a policy initiative can bring together several desirable things, in this case, of anchor and other institutions supporting their local economy (since more of the salaries they pay will go into the local area), the improvement of work-life balance as less time is spent away from home travelling6, and carbon reduction. Such incentives have been deployed before. Back in the 1970s, Manchester City Council would make a contribution to the legal costs of buying a house for staff living within a certain radius, and paid for rent if a purchase was made in the first six months of employment. More recently it ring fenced its lower paid jobs for city residents. Each of these has its flaws but indicates that employers can incentivise local residence. It is up to the participating institutions to devise schemes that enhance social and economic equity while reducing resource use.

5.3 Just Trade

Policy 5.3: Establish co-operative arrangements with producers of selected products elsewhere.

The thinking behind it:

Localisation does not mean forgetting our responsibilities to people in other parts of the world. Establishing such co-operative arrangements (for tea, sugar for example) can help ensuring just terms of trade while reducing transaction costs otherwise paid to “middlemen”. This would build on but go beyond Fair Trade so that the key institutions and industries of the region all pursue “Just Trade” in their procurement and trading relations – an approach adopted by the Ethical Trade movement7. A “Just Trade” mark could be developed to aid in this.

…..to be continued, or if you want it now, download here:  https://steadystatemanchester.files.wordpress.com/2017/03/policies-for-the-city-region-the-longer-version-v3-final.pdf

You can also see our policies page HERE and our publications page HERE.

Notes.

4Further resources: Local Futures. (n.d.). Going Local: the Solution-Multiplier: short introduction to economic localization. http://bit.ly/2jVdoEo Norberg-Hodge, H. and Read, R. (2016). Post-growth Localisation. Greenhouse think tank. https://t.co/SqPoMaXgE4

6Lobel, B. (2016). National Work Life Week: Working near to where you live pays off. Vitesse Media. http://smallbusiness.co.uk/national-work-life-week-working-near-live-2534427/

7Ethical Trading Network (n.d.). Ethical trade and fairtrade. http://www.ethicaltrade.org/issues/ethical-trade-and-fairtrade

This entry was posted in Greater Manchester City Region, key concepts, Policies for the City Region and tagged , , , , , , . Bookmark the permalink.

2 Responses to Policies for the City Region – serialised: Part 6, radical economic localisation

  1. Pingback: Meeting the twin challenges of planetary limits + accelerating resource scarcity. – johobbsblog

  2. Pingback: Policies for the City Region – serialised: Part 6, radical economic localisation – johobbsblog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s