Wednesday, 17 October 2012

De growth is in harmony with market mechanisms

Why is degrowth actually in harmony with market mechanisms?

There are two reasons: we are free to choose and market mechanisms are going to make increasing globalisation too expensive sooner and later -  Sooner in food stuffs.

As we see with local population lead initiatives like the Bristol Pound, individuals are seeking aware of the natural human sense of community. This is actually the first condition necessary for a market- trust and cooperation to make a physical market or a cyber market.

I often used to say that spending money in your local community is the greatest act of charity because it keeps people employed and locks margin locally. Usually market mechanisms enable local communities to reach a balance point of income and affordability. To some extent national economies like Britain which outside the City of London, the satellite financial centres and Aberdeen Oil, is largely based on service industry which locks some margin of the value creation locally at a provincial city, town, village and parish .

Also the concept of reduction, recylcing and replacement means displacing wasteful and destructive global supply chains. A key issue now is that international capital is not flowing into investment in local or national industries: it is flowing to property and global businesses. In future also, the ability to raise cash on the stock market and expand into new local communities will be erroded by this lack of cash supply and that remote delivery will more and more happen on a centralised internet basis rather than the ineffecient "out of town" shopping complex. People will spend more of their income on food and more of their income in local services- dining, entertainment and acts of supporting the local value retention consciously.  Investment in local businesses will be more local and involve more people. Banks and credit unions which accept a higher level of risk in small business loans will find higher rewards. However the local investment cycle is somewhat self regulating- if enough people are active in starting businesses and choosing to work for less take home, then the local market becomes both competitive and of a slow capital growth.

We go back to a pre-stock market series of pico economies which however continue to interact with regional food supply, national goods and global wares and services via the internet. Supermarkets will still be a major place of spending in metropolitan areas, but will be in semi rural areas forced by economic factors to take short-travelled food and b y demand for favourite local produce.

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