It is difficult to find a “silver lining” in the political chaos that has gripped Washington since the election of Donald Trump. However, there may be one. If so, it is a shift toward local economic renewal, or to a philosophy called localism. All across the country, in cities and small towns, mayors and councilmen/women are turning their backs on the Washington circus and starting to carve out their own path, with tangible results. As the academic discipline of economics continues to evolve, more attention has been paid to the idiosyncrasies of the human condition, and with that has come recognition that such human sentiments as trust and morality are in fact economic variables. It may be that the election of the most untrustworthy president ever has brought the trust requirement in economics into full relief. People trust their neighbors; they trust those with whom they share a place, share a community. This is enabling local economic development.
Localism is not new. Jane Jacobs, a self-taught economist and urban planner, is one of several intellectual leaders of a localist movement that can undercut the seduction of globalism. Staring in the 1970s, Jacobs argued that as we outgrew national economies, the correct move was not to one large global economy, but to countless small local economies. Her most cogent economic argument to that end was published in 1985 and called Cities and the Wealth of Nations. If not the originator of the concept of “import substitution,” she certainly popularized the concept. Cities and their hinterlands, she argued, need to look around and identify products that are produced elsewhere and imported into the local community. They should then pool their resources and start producing those products as an act of import substitution.
Today, knowingly or not, localities are embracing the Jacobs agenda and rejecting globalism, so much so that corporate-supported think tanks have already moved in to attack. The “Foundation for Economic Education,” for instance, published a scathing essay entitled “Economic Localism is No Better Then Economic Nationalism,” in 2016 (the message is that only globalism works). But cities and small towns, all across the country, are taking matters into their own hands, in some cases voting to tax themselves to generate business start-up funds for local operations that will replace products previously imported into their community. As an example, Ord, NE, population 2,103, added a 1 percent local sales tax to fund new business start-ups and improve community infrastructure, such as parks, safety, etc. The results have been impressive. Ord’s Scratchtown Brewery is a good example. Craft brewing, in fact, is a growing local phenomenon. Tiny Hordville, NE, population 150, now supports a modern local brewery called Banana Rams, a business created by a Hordville native who returned to his hometown to pursue his passion and bring life back to his small community. There’s a huge local food movement underway. Farmers markets have proliferated exponentially in the last decade. Communities are investing in solar and wind energy, and an array of community-supported efforts are underway to improve the lives of the previously forgotten, i. e., the homeless, the uninsured, the disabled. The Manna House in Memphis is a locally run safe house near downtown Memphis where homeless individuals can come for coffee, shower, and receive clean clothes during a five hour window each day. It is staffed entirely by local volunteers.
One unwitting contribution of the Trump presidency may be that he has made the downside of global economics more visible by dismantling every regulation that might have slowed the degradation of our environment and the overheating of our atmosphere. Jacobs, speaking in her last book about the growing localism confronting the destruction inherent in globalism, noted that “at any one point in time it is difficult to tell whether the forces of cultural life or death are in the ascendancy.” Trump makes the contrast stark and perhaps that will be the trigger that renders localism truly revolutionary. Too often, people view contemporary circumstances as the end of one slow evolutionary procession, more or less on a path toward progress. History does not support such a view, however. In fact, a little history might demonstrate the possibility inherent in turning local.
An economist named Mark Blyth argued that there were two defining philosophical shifts during the twentieth century, one during the 1930s and the other during the 1970s. In the1930s, amidst exigent circumstances, people reacted against the unrestrained swings of the market by ushering in a period of economic regulation combined with social programming and a progressive tax structure designed to lift the fortunes of ordinary working class Americans. Throughout the ensuing decades (aided by victory in World War II with no cost to America’s cities or infrastructure), the United States became the middle class envy of the world. But by the 1970s, the wealthy corporate shareholders who benefited least from the 1930s transformation actively began to work for institutional changes that would remove economic regulation, curtail social programming, and do away with a progressive tax structure. Corporate shareholders had a champion in Ronald Reagan during the 1980s, a decade of progress in what Blythe calls the twentieth century’s second great transformation. Far from being one long evolutionary procession, economics in this country has been defined by pronounced philosophical shifts.
It may be obvious in 2019 that the corporate shareholder agenda benefits a small segment of the population, but as the transformation was playing out, it was not understood that way. The second transformation was touted as an economic strategy that would “lift all boats,” that would bring greater prosperity to all segments of the American population. Reagan’s tax cuts were sold as a “revenue generator,” based on a new economic theory advanced by a young economist named Arthur Laffer. Laffer argued that if you cut taxes for the wealthy, they will be incentivized to work harder, since they will be able to keep more of their money. The argument embedded in what became known as the “Laffer curve,” was that cutting taxes for the wealthy would actually increase federal revenue. It didn’t. To the contrary, it created record levels of national debt in a very short time.
The fact that the Laffer curve proved to be bogus was hardly the end of the second great transformation. In fact, Laffer remains a hero to the super-rich despite his shortcomings as an economist, and recently received the Medal of Freedom from Donald J. Trump. The economy rebounded from Reagan’s 1987 crash with the advent of the internet and the “dot com” explosion, and thus the idea that elevating the fortunes of corporate shareholders might help everyone, lived on—in both political parties. De-regulation, tax cuts, and cutting social programs became the official tripartite platform of the Republican Party and garnered enough support from Democrats to make each of the three pieces a reality. Things changed in the fall of 2008, however. The American economy stumbled, and stood at the brink of a total collapse. It is likely too early to tell, but the 2008 crash may well prove to be the first catalyst in a transformative philosophical rejection of globalism in favor of localism.
Enter Jane Jacobs (and a host of others, E. F. Schumacher, Wendell Berry, Herman Daly, and Vandana Shiva to name a few). Thanks to their insights, another path is now visible. Localities all across the country are taking that path. Localities all across the country are working to harness the strength in human community; they are working to improve their own economic well-being, as well as the health and productivity of their place on earth. If there is a “silver lining” to the chaos surrounding Donald Trump, it may well be that people all across the country are turning local.