During my last lecture tour in the US, I was particularly challenged by my host and co-organizer of the tour, Daniel Arraya, about my ‘neo-feudal’ scenario, which expects any P2P society to be much more localized but connected globally through open design communities.

Daniel called this vision ‘romantic’ and anti-global, based on ignoring the strong trends towards continuing globalization.

Here then is an effort to explain why I came to this conclusion as a likely current and future trend.

First of all I would like to stress that my scenario is not an either/or scenario, i.e. a form of localization that is in some way totally opposed to globalization.

However, I think that classic globalization, of the kind we have seen since 1989, is not sustainable.

First of all, it was based on the integration into world capitalism of ‘new’ areas, such as Eastern Europe and China, a process well under way and that is not ‘infinite’.

More seriously, it was based on cheap transportation based on cheap energy, and on cheap labour (again Chinese and East-European). Because of Peak Oil, any strategy that is based on cheap energy and cheap transportation is doomed to be valid only for a short time; and cheap labour is undermined by the very success and maturation of the integration process.

All of these trends ‘objectively’ threaten globalization as we know it.

More seriously however is the problem of global warming and the carbon footprint of current processes of industrialization, most simply put, we no longer have the global resources that would allow countries like China and India to reach current Western levels. We have reached, or are reaching, or will soon reach, a crisis of ‘extensive’ globalization. New forms of globalization may be possible, but no longer on that same basis. I expect that is we recover from the current crisis, we will see a resurgence of regional blocs, and more inter-regional trade within Asia, within Latin-America, etc.. and less ‘between the continents’.

Peak Credit, the current meltdown of the financial system, will also severely curtail the flow of excess money to ‘emerging countries’ and they will have to rely more on ‘internal’ resources.
These are all ‘negative’ trends making current globalization unsustainable.

There are also long-term technological trends that make localization more interesting as a strategy.
In my opinion, the trend is towards a ‘miniaturization’ of the means of production. Physical capital goods are becoming smaller, more decentralized and distributed. Therefore, barriers to entry by smaller players are going down, giving opportunities for more localized production using cheaper and more versatile machinery.

Think of rapid tooling and manufacturing, desktop manufacturing and mail order machining, up to personal fabrication and 3D printing as all pointing to the same direction. Parallell post Peak-Credit developments towards social lending and mutual credit, have a similar effect on the availability of more distributed finance.

Finally the emergence of open and share design communities, of open and free hardware combined with ‘built-only capitalism’, which have a different logic regarding the type of machinery that can and will be developed, will go in the direction of more modular, granular manufacturing.

We should also be sensitive to cultural changes, not just ‘negatively’ in a rise of protectionist feelings and measures, but also positively as a desire to eat more local foods, to buy more locally produced products, even the growing use of local and regional currencies which keep more of the economic flows within certain regions. As far as I can ascertain this is a strong and growing trend that is noticeable in many western countries, and perhaps even outside of it.

Therefore, even as some aspects of globalization may continue, there will be parallel with it a growth of localization, and to the degree that the first one enters into more serious crisis for the combination of reasons cite above, this will strengthen the need for more localized alternatives.

I want to stress that this is not a romantic, nor a regressive or ‘survivalist’ vision. The kind of localization that I foresee, is not just a retreat to the local, but a positive choice to combine more local physicial production, with global interconnectedness, with global tinkering and open design communities.

The physical production can be more local, but the global intellectual,c ultural and scientific exchange that has become possible through global internet infrastructures, is not going to disappear, and is a lot more sustainable than the current form of physical globalization.