Festival of Grassroots Economics asks: Where’s That New Economy?

Festival of Grassroots Economics asks: Where’s That New Economy? Offers powerful answers
Ryan Van Lenning
Published on Monday, October 19, 2009
http://oaklandlocal.com/article/festival-grassroots-economics-asks-where%E2%80%99s-new-economy-offers-powerful-answers

“Let’s take back our economy. Let’s decentralize and democratize it,” Heather Young said, kicking off the panel called “Building the Alternative” at the Festival of Grassroots Economics, held September 26 at the Humanist Hall in Oakland.

Heather Young was one of the main organizers of the festival, a free, day-long gathering of roughly 250 Bay area people who gathered to meet and discuss how to evolve alternative economies that benefit working people, support local small businesses, support pay equity, and address work through the framework of race, class and privilege. Young, a co-founder of Bay Area Community Exchange wanted to make sure everyone arriving for the day understood that finding new economic models was the essence of the festival, whose slogan was “Building an Economy for the People and the Planet.”

Held in Humanist Hall just north of downtown Oakland, the event was organized with no external funding by JASecon (Just. Alternative. Sustainable. Economics) and a handful of local citizens and workers in cooperatives and non-profits interested in finding new ways to do business in the local economy. Some of these new ways adopt different ownership models and some don’t involve Uncle Sam’s dollar at all.

Bernard Marszalek, another central organizer, noted, "A goal of the Grassroots Economics Festival is to bring together a variety of economic projects for the public to see close up and to appreciate the creativity and value of bottom-up efforts to fulfill real needs."

At the heart of the festival were four panel discussions titled 1) Co-op 101, 2) Resources for the Grassroots Economy, 3) Urban Food Security, and 4) Building the Alternative. Each one provided concrete examples of the new economy in action and ideas on how to advance it.

Worker Cooperatives: Keeping Jobs, Profits and the Economy Local

Even as the main hall was abuzz with people exchanging information and networking, the festival kicked off in the main yard with a discussion of worker co-operatives as concrete and successful models of alternative economic enterprises that are locally rooted. They result in more equitable workplace structures and provide multiple community benefits. The panel was a primer on democratic workplaces, covering organizational, legal and financial aspects of worker-owned cooperatives, while highlighting concrete examples of how one functions.

The main presenter for the panel was Kasper Koczab, a worker-owner at Rainbow Grocery and a staff representative of Network of Bay Area Worker Cooperatives (NoBAWC, pronounced “no boss”). Rainbow Grocery in San Francisco’s Mission District is one the Bay Area’s premiere worker co-ops and NoBAWC is an association of 37 businesses and organizations.

First, Koczab made it clear that most worker co-operatives are in the business of making money, among other things, and underscored that co-ops are “not some hippy-dippy enterprise.” The critical difference is that the money generated doesn’t go to outside investors, but rather the surplus is divided between all the worker-owners.

There is “no one single model” for worker-cooperatives, Koczab said. Yet there are certain key features and advantages of worker-owned cooperatives. They are all businesses that are owned and controlled democratically by their members, not by investors, typically on the principle ‘one worker, one vote’. Koczab described how at Rainbow Grocery profits are divided based on labor (hours worked, longevity). Part is paid out in cash and part is retained in an internal capital account (ICA) for capital improvements or expansion to support the business.

Koczab noted that not everybody is accustomed to taking on the responsibility of being their own boss.

“We’re educated to be part of a hierarchical system. The expectation is to be exploited or climb the corporate ladder. That mentality is hard to break. We’re simply not taught about democratic work-places, all the way up to MBA programs. They have their own set of needs on which we need to be educated, instead of how to generate profits for people who are already fuckin’ rich,” Koczab said.

At Rainbow, he continued, “you either take on the responsibility of being an owner-member or you move on. We don’t want two classes of workers,” again underscoring the egalitarian and democratic principles that guide worker-cooperatives.

Coops flourish in the Bay Area

The United States has relatively few worker cooperatives--just over 300, according to the U.S. Federation of Worker Co-operatives. Yet worker co-ops are well-represented in the Bay Area, ranging from bike shops (Box Dog Bikes), bakeries, (Nabalom, Arizmendi) and a juice bar (Juice Bar Collective), to graphics and print shops (Design Action, Inkworks Press)—even a San Francisco peep show called Lusty Lady, which has the recognition of being the world's only unionized worker-owned peep-show cooperative.

There are also organizations set up to help facilitate cooperatives. The two oldest Worker Cooperative Development Agencies in the Bay Area are Arizmendi and WAGES. Arizmendi Association of Cooperatives is a cooperative made up of five member businesses, four cooperative bakeries (Cheese Board, Arizmendi Lakeshore, Arizmendi 9th Avenue, Arizmendi San Pablo) and a development and support collective. The mission of WAGES (Women’s Action to Gain Economic Security) is to build worker-owned green businesses that create healthy, dignified jobs for low-income women. (See here for list of Bay Area cooperatives)

Not wanting to give the impression that worker-coops are perfect, Koczab acknowledged that whenever you have 250 people you are going to have 250 different personalities. He noted that sometimes consensus decisions take longer, but the results are well worth that “inefficiency.” He then summed up the “endless” benefits, listing the rewards of being an active citizen, being part of a participatory democracy, giving your voice, keeping money local, having more responsibility to the local region, and living where you work.

One attendee, Michael Tank, commented, “I think it’s fantastic that co-ops like Rainbow are successful enough that they can start to offer themselves as models to learn from. It was very empowering to be able to look at the governing structures of co-ops so clearly in the Co-op 101 workshop, from what structure is right for how many people, to how co-ops could even be franchised."


Resources Panel: Accessing Money, Land and Other Tools

Discussion at the conference made it clear that one critical issue with the current economic system is that resources are less and less owned by communities, wealth is increasingly concentrated with a few people, and the financial system serves and is controlled by a limited group of people. In this environment, communities need access to financial and development resources to meet their needs and build their assets, invest in their own ideas and jump start their projects. Panelists discussed the concrete and potential resources available to community projects.

The panel consisted of Ian Winters, Executive Director of the Northern California Land Trust (NCLT), Jeannine Esposito of People’s Federal Credit Union, a division of Self-Help Federal Credit Union, in West Oakland, Jenny Kassan of Katovich Law firm, and Erin Kilmer-Neel, Program Officer at OneCalifornia Foundation. The panel was moderated by Janelle Orsi, attorney and co-author of The Sharing Solution with Emily Doskow.

Winters, also a resident of one of the NCLT’s cooperative housing properties, discussed the Community Land Trust Model (CLT) and the importance of taking land out of speculative real estate market. He said that under a coop model the value is keyed roughly to inflation, rather than the ups and downs of the real estate market, which results in less fluctuation or more stable prices.

“It is not just about having affordable housing, but about creating alternative ownership models, and tying community together.” Winter added.

Kilmer-Neel described OneCalifornia Bank as being founded to redistribute wealth and reinvest in the local community and programs. She said all profits go back into Foundation.

“I’m passionate about what we can do individually on day to day basis when we spend our money,” she said.

Esposito spoke on behalf of PFCU, the only deposit--taking financial institution in West Oakland. People’s is like a bank, but is non-profit, and when you open an account you become member and can vote on bank board members.

“There are numerous check cashing financial institutions but individuals can not open accounts there or save money like they can at a deposit-taking institution. There is one church-based credit union which is only open to members of the parish and one employer-based credit union open only to its employees. There are no commercial banks here, they all left in the 60’s,” Esposito noted.

One of the more novel ideas--and one that got people talking excitedly--at the entire conference was proposed by Jenny Kassan during this discussion. She suggested an alternative “new stock-exchange for local, socially-conscious businesses,” citing Michael Schuman’s book, The Small-Mart Revolution.

“There really is no such thing yet as a mutual fund of local, small businesses.”

When you invest in mutual funds, explained Kassan, you are sending your money far away and perhaps benefiting non-socially conscious businesses and projects. The NYSE doesn’t care about your neighborhood. Part of the problem is that security exchange laws which makes the legal requirements prohibitively costly for most small businesses. Could an alternative stock exchange be a way to invest in local business, boost local jobs, and increase accountability?

She asked: “How can we create a tool-kit for local businesses to go public?”

Bay Localize, an organization dedicated to promoting a self-reliant, sustainable, and socially just Bay Area, recently launched its Community Resilience Tool-Kit. A community financial resources section could be added to the ‘Jobs and Economy’ chapter or a similar tool-kit could be launched by a collaboration of like-minded individuals.

Kassen also proposed the creative use of business improvement districts. “Property owners vote to tax or assess themselves for events, cleaning sidewalks, etcetera. What if you used it in creative other ways? For example, hire a consultant to lessen carbon impact,” she said.

During the discussion, Winters noted that for-profit businesses essentially get an immediate 30% credit for every $1 investment in renewable energy. “How do we use for-profit models in ways that benefit community?” he asked. One likely answer he suggested is to use the worker co-op model, instead of big money corporate model, or for non-profits to create for-profit subsidiaries to take advantage of these tax benefits.

The audience was engaged, asking sometimes tough questions. One gentleman asked, “What mechanisms are in place as these projects scale up to keep it accountable and responsible to the community?”

Good question. Among the answers proffered were keeping ownership local (Kassen), utilizing B corporation (Kilmer-Neel) ratings, and imposing a limited lifespan (Winters).

Sharing resources is another way of distributing cost and risk. Moderator Janelle Orsi’s new book The Sharing Solution: How to Save Money, Simply Your Life & Build Community, published by Nolo, covers in depth the legal and practical issues surrounding the sharing of food, housing, transportation, tools, workspaces, and childcare. The book concludes with two informative appendices of Resources and Forms.

Orsi closed the panel discussion by saying, “This has been an exciting panel. There have been so many inspiring ideas; it is rare that you listen and hear not just the problems, but real solutions.”

This is a sentiment that many attendees echoed with regard to the whole festival.


Food Security: Sustaining Ourselves Locally

“We really need food as part of the green jobs discourse. And we have to talk about food justice and economic justice together,” Gavin Raders of Planting Justice said.

The Urban Food Security panel was the only one dedicated to a single sector, consisting of Gavin Raders of Planting Justice, Dana Harvey and Dennis Terry of Mandela Marketplace, and David Roach of Mo’ Better Food—all Oakland-based. Like other cities across the nation, the Bay Area has pressing issues of food insecurity, health issues, and an unsustainable food system, There is a desire to put food production and choice back into the hands of the community. Individuals, organizations, and governments are asking how we are building just, sustainable, and locally-based food systems that meet our communities’ needs and provide meaningful work.

Harvey explained that nine Oakland community members work at and own Mandela Foods Cooperative, the most recent worker-coop in Oakland that focuses on selling healthy, organic, and locally sourced food.

“This is the other green economy,” that you don’t hear about as much in the national conversation, she said

Mo’ Better Food’s mission is to promote good food, healthy living and economic sustainability in underserved communities and to reconnect African-American farmers back into neighborhoods.

David Roach, a long-time Oakland organizer around issues of food security, stated “We are conditioned to eat cheetoes and soda. Food isn’t looked at enough as a preventative measure.”

Roach then charged that the area of urban food security “has become such a non-profit industry…When you are out grassroots organizing you are not thinking policy, but survival.” This was perhaps in response to the new Oakland Food Policy Council that has received foundation and city money recently. The subject was broached but not pursued. It was perhaps the beginning of a serious conversation that needs to take place.

One audience member raised the issue of gentrification, citing the case in the Bronx where beautification of a neighborhood via gardens lead to higher taxes and higher rent. Keeping such issues in mind will also likely have to be part of the conversation moving forward.

Raders responded to some of these issues by proposing that there are two models for community betterment: “One is charity. The other involves empowerment, employment, paid workers.”

Harvey concluded: “Take community seriously, they know the problems and how to fix them. Put economic control in their hands,” again stressing that it is not just about getting more food or even better food in our communities, but about getting assets into the hands of people.

Roach ended the panel with a final plea: “And by the way, take the fences down off our community gardens.”

Building the Alternative: Scaling up the Movement

“We are going to live more locally, regionally by design or by force,” panel moderator Gopal Dayenini of Movement Generation bluntly declared.

The final panel got under way as the afternoon sun progressed, and both the panels and the audience followed the shifting shade. The purpose was to ask ‘How can we grow all this? How can we nurture a local economy that gives working folks power and control over the economy and their work lives, leveraging available resources? How can we build a just, sustainable economic alternative to scale?’

Gopal “The first thing is it actually has to represent a real different way of doing things. It has to be meaningful, that is, accessible and replicable to the vast majority. In a word, it has to be ‘transcendent’—it can’t be dependent on the current market system.”

Panelists included Ali Ar Rasheed, AAR Development Consultants, Rhea Serna of the Mission Asset Fund, Tom Wetzel, a founder and past president of the San Francisco Community Land Trust, and Heather Young of Bay Area Community Exchange and one of the main organizers of the festival.

Ar Rasheed struck an introspective note and stressed self-reflection and shared values. “We have to start to live a new life based on shared values.” He encouraged creating “institutions that reflect the values of the people gathered here today and build that future day by day.”

“Answers reside in us, as seeds of change. But all this work starts with self.”

Wetzel discussed two types of organizing: organizing for self-management and organizing for struggle, represented by unions and environmental justice communities. He then spoke about the 7 year anti-eviction struggle by tenants in San Francisco, adding that in the current movements there “hasn’t been sufficient level of organizing and struggle.”

Rhea Serna of the Mission Asset Fund discussed how a part of the profit from the sale of Levi-Strauss Factory in the Mission was not divided up among dozens of non-profits as originally intended, but rather put into a fund to build and maintain wealth in the Mission communities as that was seen by the community as the greatest need. “We help people become part of the financial mainstream,” by aiding in asset management and ownership.

Heather Young highlighted a problem: “Every struggle ends up running into a better funded corporation and powers that be and the question is 'can we fight this?' And often the answer is 'no.'”

The solution--take back the economy.

For Young this means taking back the money supply, using credit unions, experimenting with participatory budgeting and complementary currencies, local procurement policies, and keeping things regional.

When asked to clarify her claim that we can’t fight those powers, she said, “I don't mean to make it sound like these are not worth fighting for at the national level, but that we have a lot of influence at the local level. There is much more participation, transparency, responsibility and accountability at the local level, which is nearly impossible going up against these better funded corporations, the federal government, the World Bank, etc. that we have almost no influence over given their scale and inordinate wealth and power and given that the capitalist structure is inherently designed to reward profit over any other value. The cards are stacked up against us in so many ways beyond the local level.”

The BACE Bucks, passed out by Bay Area Community Exchange, were a big hit. BACE Bucks are meant to be a type of complementary currency to offer a service to your community. Young mentioned the success of other complementary currencies such as the Berkshares, money printed by the community in Berkshires, Massachusetts. “Trust is the only currency” is the title of the Bay Area blog dedicated to regional complementary currencies.

Young said, “at least one of these BACE Bucks was traded with a vendor for a good, Chris Carlsson's book Nowtopia.”

Carlsson is a Bay-Area writer, editor, graphic & web designer, and activist, whose book carries the subtitle ‘How Pirate Programmers, Outlaw Bicyclists, and Vacant-Lot Gardeners Are Inventing the Future Today!’ It is published by Oakland-based AK Press, yet another worker-run collective.

When asked what he sees as most hopeful and most challenging in efforts to build the new economy, Carlsson noted, “So many people are already doing it, and not waiting for the initiative to arise from the government, or from someone else. The most challenging problem is to really break away from the surrounding economy that demands growth, wage-labor, prices, and the commodity form, even when self-managed... that's a real tough nut to crack.”

So according to these panelists, scaling up these efforts involves a variety of tools and strategies, including getting more assets in the hands of the local community, having more say in how are tax dollars are spent, experimenting with complementary currencies and alternative ownership models, organizing and fighting for what you want and need, minimizing divisive boundaries, sharing more, and building a more collective mind-set.

“If we have everything solid and in place, then when things collapse we will have that great local economy we’re always dreaming of.” Young concluded.

The Bay Area: Moving toward new economic models

“I believe we are on the cutting edge of a movement that will inevitably change the world more than we had ever hoped maybe even just 5 years ago,” organizer Heather Young said.

The festival was an exchange of novel ideas and a forging of new partnerships. Of course in one day you can’t cover all the issues, nor all sectors of the new economy. For example, many projects and models could only be alluded to, such as time banks and complementary currencies. Other ideas that floated to the surface were questions about how to give grants to small businesses, alternatives to 401ks, how to use for-profit models to take advantage of tax advantages on renewable energy but using cooperative models, and using the concept of business improvement districts in new and creative ways.

Since the festival, Michael Moore's film Captialism: A Love Story has been released, a special showing of which was announced at the festival. The film profiles two businesses as alternative work-place models: Alvarado St. Bakery, a worker-owned co-op in Petaluma, CA and Isthmus Engineering, a worker-owned co-op in Wisconsin that designs and builds automated systems, to provide a real face to these supposedly eccentric enterprises. Such models are getting wider exposure than ever before and perhaps have been given a boost in visibility by Moore’s film.

Regardless, I suspect this is the beginning of more robust sharing of ideas and learning from others in the Bay Area. The new economy isn’t the one that politicians are talking about in Washington, D.C. or the one being boasted about as being in revival on Wall Street. It’s the one that innovative community organizations and socially conscious local businesses are building one idea, one job, and one local dollar at a time in the Bay Area.

So when the question is posed, “Where’s that new economy?” The answer is--it is already here in the making.

[See feedback from participants and attendees of the festival HERE]

Take action:

Join the discussion on Oakland Local’s alternative local economy forum.

For more on Just, Alternative, and Sustainable Economies, email info@jasecon.org or get on the JASecon list-serve.

To learn more about NoBAWC and Bay Area cooperatives, contact Kasper Koczab or Dave Karoly at info@nobawc.org.

To stay in the loop about alternative currencies in the Bay Area, visit Bay Area Community Exchange or join one of their list-serves.

Put your money in a local bank or credit union.

To learn more about building local living economies, visit BALLE (Business Alliance for Living Local Economies).

To participate in building a shareable world, visit Shareable: Design for a shareable world.

To learn more about the concept of a local stock exchange, visit Small-Mart.

To learn about consciously supporting local businesses and artists, visit Oakland Grown, Buy Local Berkeley, and the Sustainable Business Alliance.

To meet like-minded people and share in discussions, join the Bay Area Community Exchange Community on their social networking site.