Networks and Centralization: Part Three

Commerce in our time is a global phenomenon. Goods and raw materials move by ship around the world. Similarly money flows around the world with very little friction. As a result, manufacturing has mostly moved to the lowest cost, least regulated countries, which turned manufacturing powerhouses like the United States into formerly industrialized countries.

Presumably, there's enough wealth, and work, and things to do in every locality, region, and country. For example near my home in Ohio, there are several Amish neighborhoods. They are generally located in rural areas. The roads in the areas are built so cars can easily drive through, but are more suited to low speed travel with buggies, wagons, and on foot. The types and number of business per capita in the areas probably resemble what the United States was like before the widespread use of cars.

One of the features of the Amish areas is that many goods are produced locally. For example, within 30 miles of my house, (which is only about 10 miles from Amish areas), there are many more sawmills per capita than in cities. The sawmills serve local craftsmen and home builders. Additionally, there are many, many small businesses. The businesses exist because the people are there, which seems like a no brainer. Where people are, there should be business, industry, and manufacturing. More people, should be more business.

Albert Duce / Creative Commons

However, in the global economy, the businesses are not attached to any locality or group of people. They are structured to extract wealth from a large region and transfer it to owners, creditors, and shareholders. Retail outlets, like WalMart, Home Depot, or even Amazon, are international in scope built on international transportation systems and financial systems. Goods are delivered from a central system, only a tiny fraction of the store's sales are paid out as wages, and the bulk of the sales are hoovered out of the locality and transferred to owners, shareholders, and creditors around the world.

Where I live, this system exists side by side with the Amish economy. The Amish live the way they do by choice. Furthermore, the Amish actually take advantage of the global system, but don't seem to let it take advantage of them. The global economic system has been thrust upon people through numerous well known laws.

This trend, then, which seems to take advantage of and possibly been propelled by "forces" like economies of scale, was created according to a plan. The wreckage that's in it's wake is really the wreckage left by monopolists and businesses moving on from areas to take advantage of a new system. The people left behind were disenfranchised even when the businesses used their labor. The tendency toward centralization and monopoly tends to create monoculture economies in cities and towns. The picture above of one of the ruins of Detroit is a prime example of the danger of relying on one industry and on national or global markets that feed it.

So, back to the question--is it laws and customs, or is there some underlying phenomenon that drives centralization? Dude, it's laws.