Relocalization: “Reshoring” the US Garment Industry

photo credit: seattlemade.org

The creation of the World Trade Organization in 1995 would lead hundreds of US corporations to shut down their American factories and “offshore” them to third world countries with lower wages and fewer environmental regulations. This trend was most pronounced in the textile and clothing industry. Between 1900 and 2011, US employment in apparel manufacturing dropped by over 80% from 900,000 to 150,000 jobs.

Thanks to the largely grassroots relocalization movement, this trend seems to be reversing. According to economist and author Michael Shuman, rebuilding local economies devastated by trade deregulation is one of the most effective tools for dismantling corporate rule. For every dollar spent in a local business, 45 cents remains in the local economy – in contrast to 10 cents for every dollar spent in a corporate retail chain. (See 2010 Harvard Business Review)

America’s Burgeoning Sewn Goods Industry

While most local economy activism has focused on food production and banking, the last decade has also witnessed numerous attempts across the US to “reshore” sewn goods production. Efforts in New York, Los Angeles, Detroit and Portland have been the most successful. Consumer research suggests the most important driver behind this movement has been growing consumer demand for corporate transparency and accountability. A  2014 Nielson Survey reveals that 42% of consumers are “willing to pay more for products and services provided by companies committed to positive social and environmental impacts.”

Consumers are also increasingly concerned about the environmental profile of the textile and clothing industry, the world’s second most polluting industry (behind oil). Third world dying mills, which use 200 tons of water for one ton of fabric, cause serious contamination when they return the water to local rivers untreated.

They’re also really wary of a particularly environmentally destructive trend known as “fast fashion”. The latter produces cheap, poorly constructed clothing to be worn once or twice and discarded.

Seattle’s Experiment with Sewn Goods Manufacture

Seattle is the latest city to attempt to foster the development of a local sewn goods industry. In 2015, the Seattle Good Business Network (SGBN)* received a Duwamish River Opportunity Grant to investigate opportunities for expansion of sewn goods manufacture in Seattle.

Sewn Goods Case Studies by Rachel Beck and Molly Parkhan, the report of this investigation, is a fascinating read. I was particularly intrigued by their detailed descriptions of the origins thriving sewn goods industries in New York, Los Angeles, Detroit and Portland. The report finishes with some optimistic predictions and solid recommendations for the successful expansion of Seattle’s local sewn goods industry.

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*Founded in 2010, SGBN is a “network of residents, local businesses and non profit and municipal organizations dedicated to building a vibrant and sustainable local economy based on shared environmental and community values.”

Relocalization: Opting Out of Corporate Society

Diversidad: A Road Trip to Reconstruct Dinner

Solutionary Pictures (2010)

Film Review

Diversidad tells the story of a 35-day bicycle trip the Sierra Youth Coalition took from Vancouver to Tijuana in 2003. Their goal was to visit West Coast rural farming communities as a prelude to their participation in the 2003 anti-WTO protest in Cancun Mexico.

The goal of the fifth ministerial round of WTO negotiations was to resolve a dispute between developed and developing countries over agricultural trade. North American and Europe hoped to use the WTO to force developing countries to drop all trade barriers that were blocking US and EU agrobusinesses from dumping cheap food on agricultural nations. By 2003, NAFTA*, the precursor to the WTO, had allowed US agrobusiness to put two million Mexican farmers out of work by flooding their markets with cheap corn.

Building Alternatives to the Corporate Economy

The most surprising aspect of the cycle trip was the discovery of a vast network of rural communities and urban neighborhoods that are busily creating an alternative to the capitalist economic system by consciously decreasing consumption, changing consumption choices and building strong local economies

In Olympia, Washington, for example, they discover that Evergreen State College is training students in organic agriculture techniques, as well as new economic models, such as Community Supported Agriculture, to increase access to cheap, locally produced organic foods. In 2003 Thurston County (where Olympia is located) already held a national record as the country with the most CSAs.**

In Oakland, they stay with an African American group which had started a large organic garden in the Oakland ghetto. Likewise in Watts, they stay with the “Seed Lady,” an African American woman who got a scholarship to study organic farming in Cuba. After learning how to grow organic food in containers on concrete, as they do in Havana, she returned to engage her neighborhood in launching the Watts Garden Club.

This is in stark contrast to what the fifteen cyclists discover in Salinas, where they meet with Hispanic farm workers and and discover the corporate farms they work on have lost all their topsoil. Because the remaining soil has been destroyed through mismanagement, it no longer supports crop growth without heavy application of chemical fertilizers and pesticides.

Cancun WTO Negotiations Collapse

Diversidad ends with dramatic footage of the anti-WTO protests in Cancun, attended by farmers from all over the world. The protest would attract global media attention after one of the Korean farmers mounted the heavy iron fence barricading the protest area and killed himself with a knife.

Buoyed by the ferocity of the protests outside, the third world WTO delegates refused to cave in, as they had in 1999. (See This is What Democracy Looks Like)

Why TPP Was Negotiated in Secret

By 2010 when Diversidad was released, the industrialized world had given up on the WTO as a vehicle for consolidating profits for their multinational corporations. However, unbeknownst to the filmmakers, Obama was already negotiating a new pro-corporate trade treaty called the Transpacific Partnership (TPP) to replace the WTO.

TPP negotiations were conducted in  secret to circumvent the massive popular opposition that repeatedly shut down WTO negotiations. However thanks to Wikileaks, which leaked portions of the secret TPP text over a period years, TPP is highly unlikely to be ratified owing to massive popular opposition to TPP in all 12 partner countries.*** (See Rock Against the TPP)

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*The North American Free Trade Agreement (NAFTA) is an agreement signed by Canada, Mexico, and the United States, creating a trilateral rules-based trade bloc in North America.

**Community-supported agriculture (CSA) is an alternative, locally based economic model of agriculture and food distribution in which consumers advance purchase a share in a farmer’s crop and receive regular distributions of fresh fruits and vegetables in season. (See Top 10 Reasons to Join a CSA)

***Both Donald Trump and Hillary Clinton officially oppose TPP.

 

Local Dollars, Local Sense

Local Dollars, Local Sense

by Michael Shuman

(Post Carbon Institute, 2012)

Book Review

Michael Shuman’s latest book, Local Dollars, Local Sense is valuable for three different groups of readers: sustainability activists seeking financial support for small locally owned businesses; local business owners seeking start-up and expansion capital; and investors seeking to move their IRA accounts and other Wall Street holdings to safer, more profitable and more socially responsible and environmentally friendly investments.

There is growing consensus among economists and anticorporate activists about the importance of relocalization as the centerpiece part of any realistic solution to the economic, energy and environmental crises that face us. Across the planet, thousands of neighborhoods and towns are coming together to opt out of corporate agriculture and energy production in favor of local food and energy production schemes. The biggest obstacle they face is finding sustainable funding to support their work.

A Dearth of Funding Options for Local Business

At present options for small businesses seeking start-up funding for organic farms, solar installation companies and similar “green” enterprises are extremely limited. A small business owner needing finance has two basic choices. They can take out a time-limited loan at interest or they can sell shares and allow other people to become part owners and share in the profits (or losses).

Even prior to the 2008 economic crisis, it was virtually impossible for small business owners to find conventional bank loans. Nearly all the neighborhood banks we grew up with have been bought out by global investment banks, which have no incentive to make loans to small local businesses. The recent move by millions of Americans to move their accounts out of global banks to local banks and credit unions – which do support local business – has been a move in the right direction. Yet as Michael Shuman points out in Local Dollars, Local Sense, this is merely a drop in the bucket compared to the $30 trillion Americans have invested – mostly through IRAs and pension plans – in Wall Street Fortune 500 companies.

Shuman, a member of the Post Carbon Institute and partner at Cutting Edge Capital makes, a compelling case for moving half ($15 trillion) of it out of Wall Street and investing it locally.  He presents strong evidence that local businesses provide a higher and more reliable return than the Wall Street casino, as well as providing a host of benefits for society and the environment. Unlike multinational corporations, they have to be accountable to local residents who patronize them. This translates into a strong incentive to be environmentally responsible, to treat workers fairly and to contribute positively to the community.

How Banks and Corporations Game the System

Although small local businesses produce 50% of the US GDP, as well as providing 50% have the jobs, fewer than 1% of Americans’ combined savings and investments help to finance local business. Most Americans still keep their short term savings (if they have any) in large multinational banks. In most cases, their only long term savings are tied up in IRA plans and pension funds. With the exception of municipal bonds, nearly all of this is invested in Fortune 500 corporations with no loyalty whatsoever to any community, state or country.

The main reason most Americans invest in Wall Street is because powerful bank and corporate lobbies give them no choice. There are serious legal obstacles preventing people from investing in local business. Outdated securities laws passed during the Great Depression make it virtually impossible for “unaccredited” investors (approximately 98% of Americans) to invest even small amounts in local companies. “Accredited investor” is a term delineating the qualifications needed to participate in “high risk” investments, such as seed money, limited partnerships, hedge funds, private placements, and “angel” investments. In the US, an accredited investor must have an income of $200,000 (for three years) and a net wealth of at least $1 million (excluding their residence).

A new business seeking funding from “unaccredited” investors is required to register with the SEC and state regulators. This, in turn, requires the creation of a disclosure and other legal documents at a cost of $25,000-150,000 in attorney fees. The U-7 or SCOR (Small Company Offering Registration) form alone is 39 pages, and each form must be accompanied by 14 disclosure documents.

There seems little hope of reforming these archaic laws while powerful Wall Street lobbies control both Congress and the White House. However according to Schuman, communities across the US are trying exciting new financing models that circumvent existing securities law:

• Worker and/or consumer cooperatives – workers and/or workers and consumers pool their resources and share ownership in the local business they are starting or taking over from a prior owner.

• Pre-sales Contracts – companies generate start-up funding by lining up customers to pay in advance for their products.

• Local Investment Opportunities Networks (LIONS) – local networks deliberately cultivate relationships between business owners and potential investors (the SEC and state regulators often waive the requirement for a SCOR if the investor is a family member or “friend”).

• BIDCOs (Business Development Companies) – a type of investment club. BIDCOS aren’t required to register with the Security and Exchange Commission (SEC) but must provide managerial and technical assistance to beneficiaries as well as capitol. No Small Potatoes in Maine is an example of a BIDCO

• Low cost DPOs (Direct Public Offerings) – if the business is limited to operating within state or offers the investment opportunity without public advertising, it may qualify for exemption from registration requirements. The business owner will still need to fill out a SCOR, but a number of public interest attorneys are seeking to streamline the process by creating “fill-in-the-blank” software.

• Crowdfunding – a technique for pooling of large numbers of small contributions, usually via the Internet, for a specific project. If there is no expectation of return (except for a token gift or premium), there is no requirement to register with the SEC. Small business owners can register potential projects for crowdfunding at Kickstarter.

• Local/Regional stock exchanges – in 1985 there were approximately a dozen regional exchanges (for example the Pacific Stock Exchange and the Boston Stock Exchange). Most were bought out by either the NYSE the AMEX or the NASDEQ. However according to Shuman, Mission Markets in New York is the most promising model for what future regional exchanges will look like. Mission Markets calls itself a “private marketplace” because obtaining SEC approval to become an “exchange” (where shares are traded) would involve major bureaucratic hurdles and cost half a million dollars.

• Local Savings Pools – issues interest-free loans for a fixed period. According to Shuman, there is less risk of fraud as lenders and borrowers are more likely to know one another. Since there is no expectation of financial return, there is no requirement to register with the SEC or state regulators.

• P2P (person-to-person) lending – www.kiva.org, an international microlending (providing loans as small as $25 to third world entrepreneurs) website, is the best example. Inspired by the Grameen Bank founded in Bangladesh by Muhammad Yunis, Kiva has many imitators.

None But Ourselves Can Free Our Minds

Emancipate yourselves from mental slavery, none but ourselves can free our minds – Bob Marley, “Redemption Song”

Bob Marley tells us to emancipate ourselves from mental slavery, and it appears people are finally taking his advice. Throughout the industrial world, young people especially are refusing to be sucked in by the constant individualistic pro-consumption messaging. It turns out this ideological strait jacket (see Public Relations, Disinformation and Social Control) we all wear to some extent is incredibly superficial. Given the right circumstances, it totally unravels. The corporate elite is fully aware of the global awakening that is undermining their ability to control us ideologically. In my view, this explains their growing reliance on the military and militarized police to suppress dissent.

Why Now?

One of the most valuable lessons I learned from emigrating to New Zealand concerns my own indoctrination with American individualist, exceptionalist ideology. When people are exposed to different cultures, ethnicities and philosophies – through education, travel or community engagement – it doesn’t take long to realize that all the pro-capitalist jingoism that’s been rammed down our throats is nothing but a pack of lies.

Intense personal crisis can also lead people to reject their basic ideological programming. A continuing economic crisis leaving millions struggling with joblessness, homeless, depression, suicide ideation and marital breakdown has been a major force leading people to reject the pro-corporate ideology that’s been drummed into them.

Civic engagement and community building activities that Susan Clark and Woden Teachout write about in Slow Democracy: Rediscovering Community and Bringing Decision Making Back Home can have a similar effect. In Sacred Economics, Charles Eisenstein writes of a profound inner emptiness that can never be satisfied – an emptiness stemming from the breakdown of social networks human beings have relied on for most of our 250,000 year existence. People respond to pro-consumption messaging in a desperate attempt to fill this void.

The global relocalization movement Clark and Teachout refer to directly addresses this emptiness by working to rebuild neighborhood and community networks. Here in New Plymouth, it has been totally awe inspiring to watch the natural high people experience from engaging in group effort for the first time. In case after case, the biological reward for collaborative effort far exceeds the fleeting pleasure of purchasing yet another consumer product, no matter how expensive or glamorous.

New Plymouth’s Relocalization Movement

Here in New Plymouth, a loosely knit Community Circle of 50 or so “active citizens” has taken up the challenge of rebuilding our neighborhood and community networks and civic organizations. Working through a variety of local groups, our projects range from organizing neighborhood barbecues and street parties, to simple street reclaiming projects (to reduce car traffic) to assisting specific neighborhoods in building Superhoods by setting up food, tool-sharing and cooperative childcare schemes and neighborhood crisis management plans (for emergencies such as earthquake, tsunami, floods, and flu epidemics) preparedness.

The Superhood neighborhood rebuild on Pendarves Street received financial support from New Plymouth District Council (thanks to a government grant NPDC and stakeholder groups applied for to increase walking and cycle). In another Superhood, like-minded neighbors actively recruit friends and acquaintances to purchase empty homes as they go up for sale.

Below an Australian example of neighbors working together to build a Superhood:

photo credit: danny.hammontree via photopin cc

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In celebration of read an ebook week, there are special offers on all my ebooks (in all formats) this week: they are free.

This includes my new novel A Rebel Comes of Age and my memoir The Most Revolutionary Act: Memoir of an American Refugee

Offer ends Sat. Mar 8.

Sacred Economics – Life After Capitalism

Sacred Economics: Money, Gift & Society in the Age of Transition

by Charles Eisenstein

2011,  Evolver Editions (link to free download)

Book Review

The title Sacred Economics sounds like a New Age treatise on spirituality. The book is actually about the end of capitalism. It offers an extremely well-researched discussion of the history of money, capitalist economics and the world wide movement for economic re-localization. By avoiding simplistic clichés about greedy corporate CEOs and amoral banksters, Eisenstein arrives at some startling conclusions. Tracing the western conception of money back to its earliest origins, he makes a strong case that money itself is responsible for rapacious growth and resource depletion, greed and the demise of community.

Money and the Loss of the Commons

The main focus of Part I is an exploration of the profound effect money has on human thinking and psychology. Part II focuses on economic relocalization and other practical steps activists can take to restore the original gift economy.

Part I begins with an analysis of the dual illusions of separateness and of scarcity. Both, Eisenstein argues, are mistaken beliefs stemming from the privatization of communally owned land. This, in turn, was an early consequence of the introduction of money.

Prior to Roman times, land, like air and water, was considered part of the commons and couldn’t be owned. Under Roman tradition, there was no way for an “individual” (a Greek invention related to the concept of money and personal wealth) to legitimately take possession of common lands. Thus the Roman aristocracy had to seize it by force, just as Europeans stole the communal lands of Native Americans, Maori and indigenous Australians.

During the many centuries our ancestors had access to communal lands for their herds and crops, they enjoyed a sense of interconnectedness and interdependency. This was lost when the wealthy began fencing it off as private property. This loss of interconnectedness has left all of us with a profound inner emptiness we experience as never having enough.

How Money Destroyed the Gift Economy

Part I also describes the gift economy that characterizes all primitive cultures. Public gift giving was the primary mechanism all early societies used to satisfy basic survival needs. As civilizations became more complex, gift exchange and barter were impractical over long distances. This led money was introduced as a common medium of exchange.

An early artifact of the introduction of money is the mistaken belief that the basic necessities of life are in short supply. This illusion underpins all western economic theory. In fact many textbooks define economics as the study of human behavior under conditions of scarcity. As Eisentein points out, this is a ludicrous notion in a world in which vast quantities of food, energy and raw materials go to waste.

The Origin of Greed

Eisenstein attributes greed to this illusion of scarcity. He can see no other explanation for low income people giving away far more money, relative to income, than their rich counterparts. Rich people worry about money more and are more inclined to perceive scarcity when none exists. Einstein talks about the immense anxiety people in rich countries experience over “financial security.” No matter how much they accumulate, it’s never enough.

Debt, Usury and Perpetual Growth

Sacred Economics argues that what economists commonly refer to as growth is the expansion of scarcity into areas of life once characterized by abundance. Fresh water, which was once abundant, has become scarce following its transformation into a commodity most of us are forced to pay for.

The fractional reserve banking system, which allows bankers to loan money they create out of thin air, accentuates the pressure to convert more and more of the commons into commodities. The amount of debt created is always greater than the money supply. Current global debt ($75 trillion) is more than twice global wealth ($30 trillion). This results in constant pressure to create more goods and services to repay personal, corporate and public debt.

Growing pressure to repay debt only hastens the rate at which natural resources, such as fossil fuels, minerals, forests, fish and water, are converted to commodities. A parallel process is causing the social, cultural and spiritual commons to be dismantled. Stuff that was free throughout all human history – stories, songs, images, ideas, clever sayings – are copyrighted or trademarked to enable them to be bought and sold.

Einsenstein’s Confusion About Marxism.

The only weakness of Sacred Economics are some mistaken and contradictory assumptions Eisenstein makes about Marxism. He makes the assertion in Part I that capitalism needs to be replaced, but not in a “Marxist” way. He claims this would remove any “monetary” incentive for people to produce goods and services that are useful to the community. This seems to contradict his call for the a return to a gift economy in which people contribute to the community for intangible rewards (public recognition, status and esteem) rather than monetary reward.

Below Eisentein speaks briefly about his book.

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In celebration of read an ebook week, there are special offers on all my ebooks (in all formats) this week: they are free.

This includes my new novel A Rebel Comes of Age and my memoir The Most Revolutionary Act: Memoir of an American Refugee

Offer ends Sat. Mar 8.

Deliberative Democracy

Slow Democracy: Rediscovering Community, Bringing Decision Making Back Home

by Susan Clark and Woden Teachout

Book Review

Slow Democracy is about a process known as “deliberative democracy.” This is a type of direct democracy in which community members play a genuine role in local governance decisions.

The book is mainly about the growing number of communities (in New York, Chicago, Washington State, Oregon, Maine, Gloucester Massachusetts, Boulder Colorado, Austin Texas, Canada, India, Eastern Europe, Australia) that have incorporated deliberative community meetings into decisions involving planning, governance, and budgeting. In the US, the 2008 global meltdown has led to ongoing state and municipal budget deficits. Cutting services is always unpopular. Thus there is strong motivation for local officials to involve the community in tough budgeting decisions.

Clark and Teachout see three alarming trends occurring in industrial society. Both public resources and governance decisions are moving towards increasing centralization and privatization. Increasingly private corporations usurp resources that rightfully belong to the public, while simultaneously making governance decisions that used to be made by elected officials. Meanwhile the public response to the corporate takeover of society has been apathy and disengagement from public life.

The authors see the deliberative democracy movement as the ideal prescription to counteract these destructive trends. The process goes by different names in different areas – study circles, charettes, meetings in a box, Who Decides, Portsmouth Listens, Living Room Conversations. Yet all seem to operate by the same underlying principle: a commitment to identify potential solutions to community problems through a public process based on good information and respectful relationships.

The New England Town Hall Meeting

Clark and Teachout begin their book with a description of the New England town hall meeting, in which residents themselves serve as the legislative branch of government. Hundreds of towns in six New England states still govern themselves via town meetings, as they have done since pre-revolutionary times. This type of direct democracy was hard to transplant to the sparsely populated settlements of the Wild West, though it was revived briefly in the Populist and Progressive movements of the late 19th century. Outside of New England it virtually vanished with the massive expansion of federal government that occurred with the New Deal, World War II, and the Cold War. Between 1945 and 1990, hundreds of thousands of federal, state, and municipal workers gradually took over decisions that were previously made in public meetings.

Slow Democracy’s Track Record

The most dramatic success Clark and Teachout describe is when the residents of Gloucester Massachusetts ousted Suez, the French multinational that ran their water supply, and galvanized the community to start their own water company. Through a similar process, the residents of Boulder Colorado replaced coal-based Xcel Energy with their own renewables-based electric company. Slow Democracy also describes the multiple successes of the local sovereignty movement, in which the Community Environmental Legal Defense Fund has helped communities in the Northeast and on the West Coast pass ordinances banning hog farms, toxic sludge, fracking, GE crops, and aquifer depletion for bottled water plants.

Cultural Cognition

For me the most valuable chapter was about the Yale Law School Cultural Cognition Project  (See earlier post Are Right-Left Labels Obsolete?) and other tools to enhance effective deliberation among groups with opposing political views. The authors begin by dispelling the myth that the US is hopelessly split into left-right ideologues. In 2007 the Cultural Cognition Project interviewed a random sample of 5,000 Americans. As predicted, the interviewees didn’t self-select into neat left-right or liberal-conservative camps. Instead their core beliefs could be plotted on a two dimensional grid depending on their views about hierarchical authority vs egalitarianism and individualism vs collective responsibility. The study results are available at Cultural Cognition Project.

It turns out that living in the same community causes residents to share many of the same concerns, despite profound differences in their worldview. Clark and Teachout give examples of successful community conversations between groups with opposing views on climate change, the Israel-Palestine conflict and abortion. All were successful in finding some areas of agreement, while simultaneously discovering the media was playing a major role in fanning the clash between them.

The book includes valuable appendices on ground rules for local officials and ordinary citizens seeking to set up effective “study circles,” as well as organizations willing to help facilitate the process and publications offering additional tools.

Originally published in Dissident Voice

World Change Starts in Your Neighborhood

A liberated lawn

Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not – Dr Seuss

Through the re-localization movement people are taking back power from corporations and reconnecting with nature and other human beings. An inspiring film from Australia describes how to make your own block a Super Hood.

We’re building our own Super Hoods here in New Plymouth (check us out at our Transition New Plymouth Facebook page). I started one in my street by liberating my front lawn to plant potatoes and silver beet (chard).

If and when summer arrives, we’re going to close the road down for a street party.

Photo credit Manawatu Harvest Festival

Solutions: Taking Back Our Power

Nothing like a nice government shutdown to remind us that the federal government is hopelessly dysfunctional. Congress and the White House are so focused on the needs of their corporate donors that most of the laws they pass hurt ordinary Americans rather than helping them. Fortunately a growing number of local groups have discovered that the most meaningful form of political change happens outside of official political channels. Together with family, friends, and neighbors, they’re opting out of the “corporate” lifestyle and inventing more meaningful grassroots models for meeting human needs.

The Story of Solutions

Annie Leonard, who produced the world changing video They Story of Stuff in 2008, has just released a sequel The Story of Solutions. Like her first film, it challenges a society built on ever increasing economic growth and accumulating more stuff. However the focus of The Story of Solutions is more on community organizing to move our economy in a more sustainable and just direction. To quote from the film promo:

“In the current ‘Game of More’, we’re told to cheer a growing economy – more roads, more malls, more Stuff! – even though our health indicators are worsening, income inequality is growing and polar icecaps are melting. But what if we changed the point of the game? What if the goal of our economy wasn’t more, but better – better health, better jobs and a better chance to survive on the planet?”

The nine-minute video includes inspiring real-world examples of ways in which communities are mobilizing for change – through programs as simple as “tool-sharing” libraries. There’s absolutely no reason why every American needs to own their own lawnmower, power drill, and chainsaw.

Here’s the original The Story of Stuff for people who missed it when it first came out.

photo credit: net_efekt via photopin cc