The severity of the current economic crisis has been compared to The Great Depression of 1930s.
There is much talk of the need to avoid the mistakes of the decision-makers at the time and the consensus is that a major mistake then was failing to ensure enough credit flowing into and through the system. There is also strong talk about the need to maintain open international trade and avert a swing to economic nationalism or trade protectionism.
Consequently, governments everywhere are now investing unprecedented sums of public money in ‘stimulus packages’ to support businesses and banks, and to encourage economic activity. Our own, New Zealand government has also been signing a cluster of free trade agreements with Asian nations.
While comparisons continue to be made with the 1930s Depression, and the need to learn from this by ensuring that the flows of trade and credit are maintained, little attention is being paid to roles ordinary people in their localities can play when they can come together. Not only can they help one another to cope more effectively, but they can also help to create the innovative new economy that is needed to bring us all out of these difficult times.
From traditional and even in modern societies until around the 1970s, factors supporting social and sometimes even economic survival and well-being have included local social and economic infrastructures, where people knew their community, including who could help and who needed help.
Societies since the 1980s have become more fragmented and individualized while also becoming more dependent on large-scale, bureaucratized delivery systems, whether governmental or commercial.
The model of the personally responsible individual who is expected to cope with all manner of circumstances has also taken a hold in many aspects of life.
However, the increasing reality is that many of those who have taken on burdens of personal responsibility are finding themselves struggling to manage major developments that they have little or no control over, such as the loss of retirement savings, significant reduction of property value, and jobs that have been retrenched or outsourced offshore. Increasing numbers of people are feeling threatened by the spectre of not being able to meet their needs, and bureaucratic agencies are seen as a costly and cumbersome alternative, including by the present New Zealand government.
In light of these trends, this government has just held a jobs summit to consider ways to protect current jobs and to create new ones. Various sectors were invited to contribute. However, representatives of the sector that can contribute to the ability of people to support one another in tough times where they live, in their localities, and then to develop the innovative, outward looking economy that is going to be needed to come through the recession, were not invited.
As Rod Oram, well known New Zealand business and economic commentator noted, “the summit was very inward looking,” and although the international perspective was raised in the beginning, “it was hardly ever reflected in the discussions.” As Oram pointed out, “what’s going on in the world is big and it’s going to have an impact on us” (Nine to Noon, Radio New Zealand, 3 March 2009)
Since the 1980s successive governments have opened New Zealand up to the global economy. However, they have not seen any serious need to equip New Zealanders to connect more effectively with the wider world and its cultures so that they can relate successfully to it. Consequently, the substantial yearly trade deficits that began to occur in the 1970s have continued to mount year after year. Refer to: NZ’s foreign debt soars to danger level New Zealand Herald, 23 December, 2008).
Now simply signing free trade deals with large Asian countries where we already have major negative trade balances, such as has been done with China, Korea, Singapore, and now the 10 nations of Asean, is not going to reverse the trade deficits. As things stand, signing such deals is more likely to mean walking, as unaware ‘innocents abroad,’ into more costly disasters like the Sanlu milk scandal in China. Or, alternatively, becoming so cautious about getting fingers burned that we fail to see, and make the most of the opportunities that might be there.
Until we become much more knowledgeable about Asia and about Asians, and much better able to connect with them than at present, we will not know how to process, package and sell premium products at premium prices. Depending on selling them bulk agricultural commodities to transform our huge deficits into surpluses would result in unimaginable disruption to our environment, particularly so given the scale of surpluses needed to turn the present economic situation around.
There are other products that can be sold on a large scale in Asia that are not agricultural. The Finns have done this with new, technological products, notably their Nokia cell phones in places like China. See Why Nokia is No. 1 in China
I would like to propose a new ‘solutions-based’ approach which, put simply, involves people in their localities learning to use Internet and film technologies to better connect with one another locally and thence, also, beyond. Such projects would result in local people being able to better support one another on two levels:
There would be much to gain by investing in projects in localities that network the technologically and artistically skilled with locally-based immigrants.
As they came to permeate various localities around the country, such local communications projects would also help to enable a whole nation of people and organizations to connect productively with one another and with those in the wider world for many purposes on many fronts.
I would like to suggest, finally, that a country with programs for the kinds of locally-based development projects described in this blog would come out of the current slump more quickly, and be much better equipped to contribute and thrive in the new and very different world that will emerge.
Do you agree or disagree? Why?