In reply to Ed:
Well, I can certainly appreciate your experience and to a large degree it
was reflected in my family as well, but you are talking about the
experiences of the depression and I was referring to the experiences of the
50's. That two decade difference is a big difference.
I guess the personal story I was trying to tell Douthwaite was based on the
complaints I heard from my grandfather as he watched his 5 sons leave the
farm. He maintained that it was the price the cities were willing to pay
for farm production and that because they controlled the market and the
capital, the farmer was forced to take what he could get. Grain in a
granary has no value, so withholding his production from the market and
waiting for a better price wasn't an option. This transfer of wealth from
primary industries in local areas is the "profit" that makes cities
possible. Cities on their own cannot build without wood, manufacture
without metals, eat without large agriculture and that is not to say that
cities provide no benefits - it is to say that miners and loggers and
farmers don't set the price - the markets of the cities do. And there in
lies the distortion. People will stay on the farm or in the bush if they
can make a decent living. That means that those small communities with
their required infrastructure create a lifestyle that is equal to the city
lifestyle and many would choose it. The economics of capitalism and power
reduce the amount of money in the countryside while the rich in the cities
grow richer.
Now we talk of the global economy. This idea is driven by the myth of
lower prices. The idea as I understand it is that business should be
allowed to produce where costs are lowest and sell in markets where they
can receive the most and that this differential will provide them with a
higher rate of return on invested capital. The glitch in this scenario is
the found through one of our fellow posters, Jay Hanson. A global market
only works when the cost of transportation is low. Once the true price of
gas and oil comes into effect, there will be a huge surge of capital to
local markets because goods that are carrying the price of high
transportation costs will be more expensive than goods created for local
(and by local I would generally mean within a radius of 100 miles) markets.
This is the de-massifying effect predicted by Alvin Toffler and Marshal
McLuhan. I might add that the increase in communication technologies
assists this reversal by bringing all the advantages of the city to the
rural. Douthwaite and I observed in our lifetime the denuding of our
respective rural communities and the massive increase of our cities. Now,
with large hydro companies being forced to allow local generation, we can
begin to see the start of this trend. It will happen in monoculture
agriculture as farmers find that tomatoes from Florida and California can't
compete because the cost of transportation has risen past the point of
greenhouse and hydroponic gardening using waste heat from local
co-generation. Even things like coffee will be grown locally once the cost
of fuel rises sufficiently.
So why is all the smart money betting on globalization. While fuel prices
are cheap, the most capital can be accumulated with a global strategy.
When fuel prices rise, the ones with capital will be able to invest in and
dominate local economies. For a capitalist, the strategy is always
remarkable simple - to keep your eye on the ball - always invest where the
rate of return is the largest. These guys will have no trouble getting out
before the global collapse of trading because they are all drinking the
same brandy as the oil producers and will have advance warning on when to
convert investments into capital and re-invest locally. The oil producers
don't care, we are a petroleum economy and we will need petroleum for local
rural communities as long as it lasts.
So, why MAI, NAFTA and other international treaty's. If I am right, they
won't be worth the paper they are written on in 10 years as their will be
little or no global economy. However, until then, let's weight the
roulette wheels for the highest rate of return and besides it sets up all
the investors not in the know as they see the big guys trying to protect
themselves, not realizing it is feint.
So, Ed, even though we had slightly similar experiences we have drawn
totally different conclusions. I think that as we de-massify, which is
happening in Canada with Quebec leading the way and the rest of the
Provinces demanding more rights and more local taxes, that when the fuel
prices go up, the governmental infrastructure will be in place. Even those
capitalists who make it into rural economies are going to have to change,
because as Douthwaite pointed out, local owners have to invest in their
community rather than taking capital out.
Respectfully,
Thomas Lunde
