The End of Globalization

From Global to Local: The Making of Things and the End of Globalisation

by Finbarr Livesey

Profile Books Ltd (2016)

Book Review

In From Global to Local: The Making of Things and the End of Globalisation, Finbarr Livesey challenges the common neoliberal claim that globalization is the be-all and end-all of global prosperity.

Livesey’s premise, which he supports with an impressive array of data, is that globalization peaked shortly after 2008 and the world economy is in a period of deglobalization. World trade is slowly declining as a percentage of GDP, and many companies who moved factories to the third world are improving their bottom line by reshoring them to the US and Europe.

Livesey contends that, to a large extent, last year’s vote for Britain to leave the EU and for a US president who promised to withdraw from the TPP and bring back American jobs, merely reflect an economic trend that began nearly a decade ago.

The present deglobalization was triggered by the 2008 financial crash that sucked trillions of dollars out of the global economy. However, Livesey identifies a number of other factors that influence this trend – chief among them the volatility of oil prices and shipping costs (containers must be booked months in advance) and the growing cost of labor in China and neighboring countries. At the same time, technological advances, including 3D printing and “additive manufacturing,” have led to an upsurge in “on demand” industries and consumer frustration with being limited to millions of identical mass produced items.

At present many companies find it more profitable to shorten their supply chain by producing most or all component parts locally or regionally. Between 2010 and 2015, over 1300 companies brought production back to the US. Even Apple and Google have started to reshore significant manufacturing operations.

At present three-fourths of everything bought in the US is made in the US.

Originally published in Dissident Voice

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.”