Monday, October 03, 2005

Localization - Cities of the Future

Local food, local energy, local water, local money. Tonight I listened to a download of Dr. Jason Bradford of Willits, California organizer of Willits Economic Localization (WELL) Program. Bradford began by hosting free public screenings of The End of Suburbia about a year ago. The screenings grew to a size that became unmanageable for one person and at that time, more citizens became involved. They created working groups under the topics of water, energy, food and shelter. Steering committees grew from the community groups and a statement focusing on a re-localization of services was prepared and later endorsed by the Willits City Council.

Bradford’s vision for Willits is inspiring. In the next 20 years, he would love to see 40 community supported farms surrounding Willits, providing jobs at the local level. The farming he envisions helps put people back in touch with the cycles of nature. It reconnects children directly to the food that they eat. Through Harvest Festivals the community as a whole is connected back to the earth. He envisions a city that produces its own energy and manufacturing. It creates a diversity of jobs so that young people don’t feel the need to migrate to larger metropolitan areas. He also sees pedestrian activity and bicycles populating the streets and sidewalks. He sees a city where, “Life and the way we live it becomes terribly satisfying.”

His emphasis on localization is not only a response to Peak Oil but to national security. Bradford sees our constant influx of products, energy and food from thousands of miles away as placing us in a vulnerable position. We are by no means self-sufficient.

This past Sunday, the Spokesman-Review published an article entitled “China’s military has ‘sharper teeth’.” The article says, “The course of the 21st century will be determined in part by the relationship between China and United States,” and China is placing a growing investment in its military capabilities. Mike Ruppert, author of Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil, said recently on his website (http://www.fromthewilderness.com/) that our true enemies in a political sense, are not the “Axis of Evil” but China and India. These are the countries that are growing exponentially and these are the countries that will want the world’s resources as much as we do.

The situation is all the scarier considering that China holds most of our bank notes through their purchase of US Bonds. Richard Heinberg, a core faculty member at the New College of California, has an in-depth essay entitled, “The Endangered US Dollar”(www.museletter.com/archive/149.html). He sees the dollar as our Achilles Heel and believes that Europe and Asia recognize this as well. Our ‘petrodollar’ is floated on tithes created through the buying and selling of OPEC oil. If OPEC decided to switch to the Euro instead (which is what Saddam Hussein did in 2000 and Iran has discussed doing in March of 2006) this could create a run on the dollar completely destabilizing our economy. Heinberg believes that increased localization of goods, services and currency is a valid and potentially hopeful response to this mess.

In the midst of all of this, it is great to hear about what is going in Willits, California. Cities and towns throughout the country, that are becoming more aware of the importance of localization are looking to Willits for organizational strategies and vision. Let’s hope the word gets out quickly enough.

For lots of great information and interviews on localization got to: www.globalpublicmedia.com/topics/relocalization

1 Comments:

At 2:03 PM, Blogger John Nephew said...

I love the idea of increasing economic localization, in many areas. We've started to buy a lot more at the farmer's market here in St Paul (especially meat...just as well to have grass-fed beef from a family farm nearby, to minimize BSE risk). It would be great to see more communities develop more local self-sufficiency, particularly in areas like decentralized energy generation. Rising transportation costs may help encourage this, actually.

I am concerned about the likely decline of the dollar in coming years (something I've hedged against with investments in some gold stocks and a precious metal holding trust), but I don't think it will have a lot to do with petrodollars versus euros, any more than if traders use metric versus imperial measurements for their transactions. Nobody needs to truck barrels of US-minted hundred dollar across international borders in order to pay for oil...it's just the current convention to use dollars as the unit of account.

What's more important is the attractiveness of the US as a place to deposit the earnings from oil (Saudi Arabia) and international trade (China), whether those earnings are measured in dollars or euros or shekels. So far, foreigners have continued to be happy to finance our government deficit and trade deficit by buying assets -- stocks, bonds, government debt, real estate, etc.

If the dollar suffers major collapse and/or volatility as a result of an inflection point in those capital flows and the willingness of the rest of the world to lend us money, it might be worth the while of oil producers to move away from the dollar to a more stable currency. That would be a pretty big technical challenge, just like the European banking system moving from local currencies to euros, and not one that would be done lightly. After all, some commodities are still traded in pounds sterling because there's never been sufficient cause to change... So if there was a change from "petrodollars" to "petroeuros," my belief is that it would be an effect, not a cause, of US currency troubles.

Also, keep in mind that OPEC alone would have trouble forcing the whole market to change its unit of account, even if it wanted to. They are big, but they only represent 40% of the world's oil production (http://www.opec.org/library/FAQs/aboutOPEC/q13.htm).

As a business owner, I don't particularly care if the dollar or the euro is the international standard for trade in the coming century. My concern is that it be a stable currency - low inflation, high liquidity, universal availability.

The idea of localizing currencies in some way (like each state or municipality issuing its own floating currency) gives me hives. I suppose the whole point would be to add barriers and friction to inter-community trade (by effectively taxing such trade with commissions on currency exchange, requiring businesses to raise markups in order to provide a cushion for currency fluctuation, etc.), but I don't like the inevitable result of stifling the economy. Maybe it would be good in some theory to disincentivize Minnesotans from buying Wisconsin cheese or California wine, but there are many areas where goods just are not possible without the economy of scale afforded by selling to a broad market. I don't know if my company could survive without our international markets, for example (at least, not without a dramatic increase in prices). An unintended side effect of increased currency localization might be to favor mega-businesses (which have the volume to justify investment in the infrastructure to deal with increased administrative overhead, currency risk hedging, etc.) over the small and mid-sized businesses.

 

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