Community Economics

Community Economics:

Local Empowerment

Article by Wayne Visser

There are a growing number of critics who claim a direct link between the advancement of industrial development based on neo-classical economics thinking and the erosion of communities. This erosion has in turn exacerbated numerous other social problems and created negative effects such as economic dependence, community disempowerment, cultural breakdown, social diseases and environmental destruction.

The call by a growing number of new economists is for a more community-centred economics. This includes various concepts, such as person-in-community, self-reliance, counter-development and eco-communitarianism. On a more practical level, the establishment and support of community businesses and other organisations, as well as of local currencies or exchange systems needs to be encouraged.

The benefits of this community approach are wealth creation, empowerment, social cohesion, ethical conduct, sustainability and fulfilment of human needs.  These are all the subjects to be briefly introduced in this chapter. Many of the concepts and ideas will be dealt with in more detail in other chapters. The theme, however, is a thread that runs throughout the book, namely that we need a new economics with a human face and planetary perspective.

The Effects of Industrial Development on Community

The Specialisation Trap

One of the fundamental principles of neo-classical economics is the division of labour through specialisation. For many communities or countries, however, specialisation can lead to dependence. Developing countries, for example, have found themselves reaping a bitter harvest for decades due to declining prices and terms of trade in primary goods. Often, these patterns of specialisation have been reinforced by conditions imposed by the World Bank or International Monetary Fund. This leaves countless communities, as new economist Guy Dauncey (1986) puts it, “at the mercy of the international trade winds, which can destroy a mono-crop economy overnight.”

Absentee Executives

Another aspect of economics dependency is the tendency in industrial development for economic power to become concentrated in the hands of large, usually transnational, corporations. The result is that the destiny of local economies becomes subject to the whims of managers making decisions in distant boardrooms, or shareholders chasing the highest returns on their computer screens, neither of whom have any appreciation for the impacts of their decisions on real communities. Offices are transferred, retail outlets moved or factories shut down with little concern for how this affects the economic viability of the local communities in which these activities operate.

Community Disempowerment

Closely related to economic dependence is the loss of any sense of self-determination in communities, a situation exacerbated by international trade agreements and roller-coaster financial markets. This in turn changes people’s behaviour, with increasing levels of passivity, apathy and people abdicating personal responsibility – a phenomenon which community development activist Helena Norberg-Hodge (1991) observed in the remote area of Ladakh. New economist Paul Ekins (1986) calls this “learned helplessness” and ascribes it to the trend in industrialised countries of replacing neighbourhood communities with “communities if interest”.

Cultural Imperialism

Another claimed effect of industrial development is the reduction of cultural diversity and creation of a monoculture.  Individuals experience a loss of identity, as they feel pressured to conform to …

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Cite this article

Visser, W. (1997) Community Economics: Local Empowerment. Money Values online column.

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