Regional Councillor Debbie Hewitt is quite right that should the Ruataniwha Dam go ahead it will be “absolutely transformational” (quoted in Hawke’s Bay Today April 2017). You need only look to Mid-West rural America, whose communities were also sold the same slogans and promises of nirvana for local business and community. Now they are disillusioned with it all, and vote for a hoped-for saviour in Donald Trump.
The consequences of large commodity programmes without consideration of ownership, community and environment can all be seen by looking at places like the Mid-West. The small towns wither, and the hamlets cease to be. The trend to outside corporate ownership certainly ‘transforms’. They take out profits and expenditure, and the local communities lose all the significant economic multipliers from having local ownership and high wages spending locally through many hands.
The health of a local economy is very much dependent on how much money circulates and distributes. When all you hear is a sucking sound as it is extracted to somewhere else, especially if the social and environmental costs remain, then you know you are being colonised.
It can be worse than merely having land aggregated and owned elsewhere. The Ruataniwha Dam will create commodities. Processing commodities depends on scale to cut costs, so expect more centralised processing out of the district. Yet more money lost to local circulation.
The economic analysis of simple input:output models presumes that the money generated from the farm will cycle through the local community the same, whatever the structure of ownership and processing. It won’t. Colonisation, commodity supply chains, and big corporate models make us poorer, not richer – with the exceptions we all know.
Then there is the nature of employment. Agribusiness corporates focus on cutting costs rather than creating a premium price, and so they focus both on scaling up and substituting capital for labour. Less labour is employed, and increasingly sourced from cheaper migrants who send much of their money home, further compounding the loss of local money circulation.
That is the combined trend of ever-larger agribusiness; less begets less, begets less. Studies from the 1940s demonstrate that most important for the economy of a region is a strong mix of locally owned and creative enterprises – in direct contrast to the model of a few outside owned extractive corporates.
Local ownership is not just better economically because of money staying and circulating through the layers of a community. There are further benefits in civic pride, hope, creating yet more enterprise, and to the care of their place, including their environment. It helps build belonging, in contrast to some reduction of life to a meaningless resource unit.
You won’t hear about any of this from neoliberal economists, because they don’t think about or even believe in community. They think people and the environment are simply resources, all the better to put in a spreadsheet with a cost attached. Then it’s easy to exploit, because why care about a figure in a spreadsheet.
There is a much better way to do things than this extractive approach to commerce, community and place. We can focus on creativity, value and diversity. We can see the quality of our community and environmental as keys to that high value and diversity approach; trust, hope and community engagement are strongly linked to creative and dynamic economies and communities. We can recognise that local ownership and local secondary processing really matter. We should never endorse what is effectively a cheap resource (people included) colonial model. We’ve been there. We don’t want to go down that path again.
It is good economics to care about your community and your environment. It isn’t about trade-offs.
We will see none of this thinking within the bloodless computer models and spreadsheets of those who advocate for the dam because they conveniently assume that none of it matters. They do not know the history of the world, nor contemporary examples.
They do not even look to the real world models that have been staring them in the face for the last 40 years. Middle America is one model. You could as easily look to colonial models of South America. These models are real. They aren’t in a computer. They have real people in them, with real history. They have real rivers running through them and real children swimming. They have real land degradation, and ownership appropriation. And they have real people voting for Trump or some other personality cult, because they have lost all hope as they watch all that they produce and work for flow out of their counties to someone who lives far away. With names like Trump.
Should it go ahead, the Ruataniwha Dam will transform Central Hawkes Bay. But whoever wants this sort of soulless ‘transformation’ for the benefit of a few, it isn’t the rest of us.
Chris Perley is an affiliated researcher at Otago University’s Centre for Sustainability with a governance, research, management and policy background in provincial economies, rural sociology and land use strategy.
Donation to Thoughtscapes Blog
Donations are welcomed with my sincere thanks. It also allows me to get rid of the pesky advertisements! And it's a nice way to say thank you. Thank you 🙂