Globalization & The Rural-Urban Divide

Tyler Durden's picture

Authored by Charles Hugh-Smith via OfTwoMinds blog,

The Neoliberal Corporate-State Order had all the power, and rigged the game to its own advantage.

Many pundits have commented on the remarkable asymmetry of counties won by the Democratic Party (blue counties) and in 2016 and those won by Republican Party (red counties): the Democrats won big in heavily urban counties and the Republicans won most rural counties.

This visible division prompted numerous article such as this: Cities vs. Trump: Red state, blue state? The urban-rural divide is more significant. "Like most red-state cities, Idaho’s capital is remarkably short on conservatives. Last November, while Hillary Clinton mustered only 27.5 percent of the statewide vote, she hit north of 75 percent in some of Boise’s urban precincts. Politically, the city might as well be on a different planet from towns that lie a couple of exits away."

The article follows a simple and superficially appealing narrative: the reason for the divide is cultural: cities are liberal, the countryside is conservative.

But there must be more to the divide than values and political culture; difficult social issues like addiction that once were defined as urban problems are now rural problems: American Epidemic: The Nation’s Struggle With Opioid Addiction (34:26 min)

Correspondent Bart D. (Australia) recently submitted an insightful description of the decimation of rural economies. Though he is describing rural Australia, anecdotally I see evidence for the same trends in the U.S., Japan and Europe.

I worry that the collective memory required to nurture self-employment and self-reliance have already been lost to much of the populace.

The thing that disturbs me most about the fate of the rural region I grew up in is the huge loss of economic diversity. A list of businesses/function my childhood town used to have but now does not:

--Bank
--Post office
--Council office
--Roadworks/council depot/workshops
--Mechanics workshop
--2 small convenience stores
--A small ‘all goods’ shop (surviving as a tea/coffee and cake eatery)
--There is a tiny junior school that has been under threat of closure (lack of pupils) for the past few years.

These are the basic building blocks of an economic community. Sporting clubs have perished as have social clubs (and even the tavern is only just staying alive) as the people, and their families, who once worked these family businesses disappear into the state capital with it’s bubble priced housing and much reduced sense of community cohesion. It’s not just my home town either... there are 3 others near by that have gone the same way.

The only economic activity left is big Agri-Biz. The number of family farms has reduced by about half in the last 30 years; so the scale of operation is huge and the debt matches it. Little of the farmers' money goes into the 'local' or even 'regional' economy. It goes to the multinationals: Bank Corp, Chemical Corp, Fertilizer Corp, Fuel Corp, Machine Corp … the economic centres for which are not even in our Nation let alone state or region.

Also worth noting that the cascade of losses was very rapid. Once we lost our council depot, the town basically withered up economically in just a few years.

We, the people, are being steadily herded into mega-cities. On the surface it seems like a voluntary migration to pursue economic opportunity... but reality is it’s forced.

Those of us that want to return to these communities to raise the next generation of kids... can’t. There are no viable economic activities to pursue... even with the alleged benefits of internet based opportunity which should make it possible to do most things from most places.

These towns all have beautiful, huge, old stone houses, with huge gardens at prices that are actually affordable to an ‘average’ wage earner... if they could find a way to make said wage living there. Instead we have to cram ourselves into bubble priced houses made of paper and fibro-cement sheeting, crammed onto tiny blocks, where you can hear your neighbours fart from opposite ends of the buildings.

We fool ourselves into believing this style of living is a choice ... that we are 'going where the opportunities are' ... but we lie to ourselves. It’s exciting for a while as a teenager, then when proper adult perspective kicks in you find yourself trapped in suburban bleakness and servitude."

We can see the outlines of a large-scale dynamic that has hollowed out the incomes and local economies of rural regions around the world: globalization, i.e. the borderless flow of capital, credit, goods and services, a flow dominated by large corporations that work hand in glove with international institutions and governments.

This article gets close to the reality. (Note that "liberal order" doesn't refer to political liberalism vs. conservatism, it refers to the "neoliberal order" that promotes "free trade", borderless flows of capital, international institutions such as the World Bank, etc.) The Liberal Order Is Rigged: Fix It Now or Watch It Wither: We did not pay enough attention as capitalism hijacked globalization. Economic elites designed international institutions to serve their own interests and to create firmer links between themselves and governments. Ordinary people were left out. The time has come to acknowledge this reality and push for policies that can save the liberal order before it is too late.

The local economies in rural counties are especially vulnerable to "lower prices always" supply chains that bring in agricultural, mining and forestry products from far away at prices below domestic production costs.

When these industries are gutted by globalization's low costs, there isn't much of a service sector left to support employment. Rather, the service jobs in rural areas depend on the ag/ mining/ forestry jobs. When those jobs vanish, the service jobs evaporate as well.

People have to move to find jobs, and that further pressures the remaining businesses.

There is a much deeper pool of capital and service employment in cities, and so it follows that cities are where the jobs are.

Why is this so? Production and production employment are tradable (following Michael Spence's work), meaning they can be traded on the global marketplace as interchangeable goods: a computer chip made in China and one made in Japan are interchangeable (quality may vary of course, but as long as the chips perform the same function, they're interchangeable.)

Service sector employment is largely untradable, as getting a haircut (for example) isn't something you can have done overseas for less money. Healthcare, education, legal services, restaurants, government--all these job-rich sectors are untradable.

The net result is globalization has an outsized impact on rural production employment and very little impact on urban untradable employment.

Although I don't have the statistics on hand, I suspect 90% of urban employment is untradable services rather than tradable production. If employment in government, education, healthcare, legal/professional services, tourism, etc. is abundant, all those untradable jobs support a large secondary service sector of other untradable services: cafes, brewpubs, night clubs, etc.

But as the Foreign Affairs article states, this Neoliberal Order is rigged against small businesses, local production, and localized economies. Globalization sweeps all of these away as "uncompetitive."

But the playing field was never level: the Neoliberal Corporate-State Order had all the power, and rigged the game to its own advantage.

No wonder the rural regions are rebelling--not against the cities, but against the Neoliberal Global Order that has stripped the economic diversity from rural economies.

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GunnerySgtHartman's picture

 

The article follows a simple and superficially appealing narrative: the reason for the divide is cultural: cities are liberal, the countryside is conservative.

And this is why leftists want to do away with the Electoral College, replacing it with a "popular vote" for president - they dominate the urban centers and want those urban centers dictating the nation's direction - urban cesspools like Chicago, Baltimore, and so forth.

espirit's picture

 

I’ll take ‘Rurban’ for $100, Alex.

 

Déjà view's picture

Green Acres is the place to be
Farm living is the life for me
Land spreading out so far and wide
Keep Manhattan -  just give me that countryside

No, New York is where I'd rather stay
I get allergic smelling hay
I just adore a penthouse view
Darling,  I love you but give me Park Avenue

The chores
The stores
Fresh air
Times Square

You are my wife
Good bye...city life
Green Acres....we are there!

http://www.appletothecore.com/tvshowthemesongs/greenacres.htm

securitized-debt's picture

she was a waitress in a cocktail bar now she owns a jet... http://bit.ly/2jdTzrM

Stud Duck's picture

Deja, have you ever notice how that slick hair Texas senator that Sally Yates handed his ass to him, looks  and sounds like Mr Haney??

roddcarlson's picture

Manufacturing, agriculture, and mining are untradeable in any society that wants to live for the long term. These are the sources of all new wealth. The other crap like hair cutting is just a trade on that generated wealth. City people are suffering because of Joomenomics too, they are just too stupid to see it. Fewer and fewer of them own a house or car polishing their toilets at their service house jobs, but they walk around to the cattle cart transportation playing with their iPads thinking they are doing well. Always one paycheck away from being homeless like the money manipulators like it. In other words the city people are the poorest of all, they have the fast flowing action of a toilet bowl. Lots of water motion but only downward. The city people are what I call the foolish leasors, the blessed Turkish Hebrew converts of the Pharisees effectively have their rentier money changer cows and they are called urban cattle..

Teja's picture

With Manufacturing etc you are absolutely right, but I do not see at all why car ownership or living in a suburbian house instead of a condo would be a sign of poverty? Cars are waste of money and blight of the cities. Small high density towns w/o car traffic would be a dream to live in, especially for families with children.

Just because you probably were born in an age where cars were the symbol of success, you should not think this will remain so in the future. Nowadays, fast cars are a symbol of losers, young people with marginal jobs leasing racing cars for almost no money, for their inner city nightly races. Sick.

roddcarlson's picture

Teja I would agree with you on the idea that owning cars or houses might not be for everyone. The point is that owning a car at very minimum could be a shelter from living in the elements and it could get you away from the high cost burdens of a city if say you were to lose your job. To me owning something is much better than owning nothing, even if just to have a roof over your head or offer you a new life in a new place.

Precisely why the elite want people living in their stacked cardboard houses and not owning a way to escape their monetary abuse and feudal system. Notice how the government has an agenda to outprice cars for the average man? How say Portland Or has an agenda to force public transportation on the cattle? I mean they want to take your license for the smallest offenses. This is part of the scam to make sure the lords of the feudal lands can maintain their peasants on the alloted reservation lands. Believe me the idea is to keep people in a state of dependency so they can't rise up and compete against them or at very minimum to escape their gravitation of manipulations.

Also nuclear annihilation is most likely coming. The last place you'll want to be is in one of those liberal cities, stacked up on top of each other, owning no way to escape.

Trader200K's picture

Yep, and riding that Agenda 21 bicycle four miles in a 40 mph Jan icestorm with six plastic bags of groceries is something you are going to see in sophisticated North Bigtown also.

NidStyles's picture

No one is leasing a fast car anywhere.

 

Fast cars are built, not bought.

 

Then again, I don't make pretenses to assume that only people in debt up to their eyes can build something of such a nature.

WarPony's picture

"Fast cars are built, not bought." ... FAIL

Dodge Demon - blown 840 hp - 0-60 in 2.1 secs

 

August's picture

Heck, my Grandad's '71 Dodge Demon was that quick, too.  Well, almost....

http://www.allpar.com/cars/plymouth/duster.html

Verniercaliper's picture

Eva was cute, but I wanted to swim in the water tank with the girls from Petticoat Junction

The Wizard's picture

Millennials are taking up more residence in inner cities. It's a matter of being aware of a potential storm on the horizon. Anyone with any sense realizes it is not too smart to be located in these compact cess pools with hungry people at the doorstep. Don't expect the educational system to provide them with tools or common sense.

ipso_facto's picture

There is a reason whites fled the cities over the last 60 years.  Curiously public education does not seem to include such in the curriculum.

Stud Duck's picture

Millenials are in those cities looking for pussy and a job, all wish to score and then get out, at least the smart ones. There is no hope for the dumb ones. It is gonna be hard to turn away those that come to me for salvation from starvation, sorry but the grandsons come first and my only concern. you made your choice to live there and party. I made mine to run 75 miles daily, do the job and return. Raised mine in rural, set them up farming and in cattle deals. They are doing just fine while I watch the debt bomb work it web around all others. My family learned the hard lessions in the Dust Bowl in the Panhandle of Olkahoma, I experienced the Great Depression/Deflation of the AG sector in the 80's.

I worked as an insurance adjuster for 34 years, worked rural field but did travel to Hurricanes, Hugo, Andrew, George, and Katrina, I have seen those cess pools up close and in high stress. When this Greater Depresssion occurs  those people setting on their pile of rubble waiting for the calvary to come are going to be the first to die. Beleive me, I have seen it, especially Andrew and Katrina!

stitch-rock's picture

Anyone, at this point, who is arguing 'left vs right' is perpetuating the means of control.

GunnerySgtHartman's picture

How does pointing out the fact that the political left controls the urban centers "perpetuate the means of control"?

Benito_Camela's picture

Because by and large it's not the political "left" it's the neoliberal pro-Wall Street cabal who controls all the urban centers. Sure, you're more likely to find left leaning people there, and they're more likely to vote for centrist Democrats, but calling any of the neolibs the "political left" is pretty dishonest. 

frank further's picture

Vote for centrist democrats?  You mean like  Bill de Blasio?

Lucky Leprachaun's picture

You're correct. Traditional distinctions between left and right have disappeared.

Doesn't invalidate Hartmann's basic point tho.

NidStyles's picture

Nonsense, the terms left and right were given to us by a Jew political philosopher. They were meant to fracture the European unity that existed before it was used first in the French revolution.

 

They were never our terms, or a part of European politics. They were always a political weapon wielded by the Jews.

AGuy's picture

"And this is why leftists want to do away with the Electoral College, replacing it with a "popular vote" for president - they dominate the urban centers and want those urban centers dictating the nation's direction"

When Everyone is on one side of the trade, its time to move to the other side.

As I recall, Farmers round up livestock into a confined space, offer the cattle lots of food to entice them to go into the corral. Then its off to the Slaughter house!

FWIW: I am in the process of relocating to a Rural area. I think its time to get out of dodge before Dodge lands on me!

NoDebt's picture

Agenda 21.

Not an accident.

 

ejmoosa's picture

Yes, there's a reason every major city is working overtime to increase their densities.  

 

Ever heard of Accessory Dwellings?

https://accessorydwellings.org/

They are now experimenting with rezoning residential properties to allow tiny houses to be added to their lots, and still be in compliance.

 

espirit's picture

 

Check out Phase 4 of Dudaville, in the affluent city of Viera FL.

 

An accessory dwelling on the same property as the main dwelling to satisfy the requirement for affordable housing.

 

Serfs can walk to work…

   

bloofer's picture

As with Ireland during the potato famine (and prior): Food production, even if all the potatoes died, was more than adequate to feed the population, but it was all being exported by the British landowners.

PresidentCamacho's picture

We are now into agenda  2030 these are 15 year plans. Agenda 2030 has zoning guidlines that your community most likely accepts and the forcing of people into (urban corridors ) is prescribed.  all agriculture will be contolled by corporations and people will not be allowed into the countryside other than to maintain corporate infrastructure. 

 

A. Boaty's picture

The globalists want us to import everything we consume, and export everything we produce, so their parasitic middlemen can rake off the top at every turn. Sure, we can see some diffuse benefits (cheap stuff at the dollar store), but the acute damage to jobs does far more harm.

44magnum's picture

The parasitic (((globalists))) want us to import everything we consume, and export everything we produce, so their parasitic (((middlemen))) can rake off the top at every turn.

Teja's picture

I wonder how many of the anti-globalist hero crew at ZH boycot Wal-Mart and Amazon, systematically?

"No, we can't afford the small shops, too expensive, and, also, it is so practical doing the Saturday shopping at Wal-Mart"

NidStyles's picture

Sure, and when the small shops come back, and they have everything you could actually need, they will be patroned.

 

Until then, how about we use the existing laws to break up some monopolies and enforce the law as it stands instead of giving the Jews free run to rape everything in sight?

A. Boaty's picture

If you think globalists only come from one tribe, then you have a lot to learn.

Oldwood's picture

Overton window.

homebody's picture

When the starving time comes, some will find out where the important sector of the economy exists - there is no sustainability in the concrete jungle.

Government needs you to pay taxes's picture

Yet somehow the world fails to run out of cockroaches . . .

RightLineBacker's picture

Or politicians.

Or lawyers.

Cockroaches are preferable to either of the above.

CRM114's picture

Why do scientists use rats instead of lawyers in laboratory experiments?

 

Easier to extrapolate the results to human beings.

 

 

What do you get when you cross a cockroach with a lawyer?

 

Nobody knows - there are some things even a cockroach won't do

East Indian's picture

I agree.

No cockroach ever tried to swindle me out of my savings.

OverTheHedge's picture

If there is a sudden crash, then cities will implode / explode violently. But, if there is a slow, gradual grinding down, people will have time to adapt. Slums exist across the planet, and somehow people survive in them. Some of the mega-cities seem to be predominantly slums. Could this be the view of the future?

https://www.forbes.com/2007/06/11/third-world-slums-biz-cx_21cities_ee_0...

Forget about Utopia or even the dystopian Los Angeles depicted in Blade Runner. The future of the city is a vast Third World slum.This year, the world will pass a milestone so profoundly significant that 2007 will become a touchstone for future historians. For the first time, more people will be living in cities than in the country. The individual who tips the scales might be a baby born to a city dweller or an adult migrating from the countryside, but in either case, it’s likely that his or her new surroundings will include flimsy walls, disease and an enveloping stench of sewage and trash. The newcomer will have arrived in a Third World slum.By 2030, an estimated 5 billion of the world’s 8.1 billion people will live in cities. About 2 billion of them will live in slums, primarily in Africa and Asia, lacking access to clean drinking water and working toilets, surrounded by desperation and crime.Already these slums are huge. According to Mike Davis, author of Planet of Slums, nearly 80% of Nigeria’s urban population, or some 41.6 million people, live in slums. The comparable numbers in India are 56% and 158.4 million. Many of these slum dwellers are also squatters, lacking leases or legal title to their homes.

http://4.bp.blogspot.com/-1JSJt9IWmHQ/TVk-f4s3y0I/AAAAAAAAAFA/Ek-Qr5XqWR...

East Indian's picture

Welcome to Mumbai; or Delhi; or Kolkata; or Dhaka; or Karachi.

Colonel's picture

"Service sector employment is largely untradable, as getting a haircut (for example) isn't something you can have done overseas for less money. Healthcare, education, legal services, restaurants, government--all these job-rich sectors are untradable.

The net result is globalization has an outsized impact on rural production employment and very little impact on urban untradable employment."

 

It's a two-pronged attack on employment in Western countries. GlobalTARDS import crimigants to take alot of those "untradable" urban service sector jobs. So those asswipes found a way to wreck those jobs too. On a scale similar to the jobs sent overseas. Chuck should mention that too.

CRM114's picture

Zoning is enslavement.

ToSoft4Truth's picture

Zoning is for serfs.  If rich friends of Government want to drop-in a casino or sports stadium, the existing zoning is shredded. 

But if you or I toss up an unpermitted shed in the backyard, it's an arrestable misdemeanor.

bloofer's picture

Rural economies have been largely destroyed by two things: Agricultural policies (regulations and subsidies) have destroyed the small farmer. The small farmer can't sell meat or dairy products without jumping through hoops or conforming to regulations that make profitability impossible. Plus Big Ag enjoys subsidies that allow it to out-compete the small farmer on price--even if the small farmer is next door to you, while Big Ag's products may have to travel a thousand miles (or from China). Small farmers in my area can sell high-quality meat, dairy, and produce at prices that are competitive with Big Ag's prices for shitty products; they just aren't allowed to.

The second factor is the destruction of small businesses by over-regulation, taxation, artificially high rents, and subsidies to their larger competitors.

Look at the Sanborn Fire Insurance maps for 1900 of small towns across the US. These maps show the businesses in your little town in 1900. What I see for the small rural town nearest me is an equal or greater number of businesses, at a time when the population was about one-third what it is today. Here are the ones from Missouri, but you can probably google to view digital maps for your state. http://library.missouri.edu/specialcollections/bookcol/sanborn/

 

Teja's picture

I do not see the difference between the first and second factor, both are basically "regulation". While that may well be true, Big Agriculture also would work even more efficient without any regulations. Austrian economy would not help you very much in the fight against it. Size is efficiency, if small farmers are to survive, we need to tolerate and subsidize some inefficiency.

Small businesses are surely killed in rural areas, all over the developed world. The problem might just be that a car gives its owner a range allowing him to reach larger towns (better prices, more selection) within a reasonable timeframe. Or ordering via Amazon etc.. What is the most obvious difference between 1900 and today, if you walk through a town? Hint: Has 4 wheels...

AGuy's picture

"Agricultural policies (regulations and subsidies) have destroyed the small farmer. The small farmer can't sell meat or dairy products without jumping through hoops or conforming to regulations that make profitability impossible"

I think thats only one part of the issue. The bigger issue is that younger people don't want to do farming. Its hard work. Younger people that grew up on farms left to find other work. Average age of US farmer is about 60.

Another issue is that there were a lot of factories in rural areas. After WW2 factories moved out of the cities to avoid the high taxes. Fast forward to the end of the 20th century, Factories were moved overseas.

OverTheHedge's picture

It's not the hard work part that is the problem - it is the hard work for zero return, and probable bankruptcy that turns people off. Bizarrely, people want to be lawyers, despite the 80hour work week and huge pressure  to perform, possibly because there is a future to be had, or at least the hope of a future. Anyone who grew up on a farm knows full well the despair and futility that is part of the lifestyle. Only romantic urban dropouts want to be farmers these days, because they don't know any better.

AGuy's picture

"Bizarrely, people want to be lawyers, despite the 80hour work week and huge pressure to perform, possibly because there is a future to be had."

LOL! Lawyers is another dying industry being replaced by machines. Only the top lawyers and specialists (ie tax Attorney) are doing well. A lot of people in Law left for other professions.