Friday, April 30, 2010

Economic History in 10 Minutes

Posted Apr 5, 2010 by Richard Heinberg

MuseLetter #215 / April 2010 by Richard Heinberg

Throughout over 90 percent of our species’ history, we humans lived by hunting and gathering in what anthropologists call gift economies. People had no money, and there was neither barter nor trade among members of any given group. Trade did exist, but it occurred only between members of different communities.

It’s not hard to see why sharing was the norm within each band of hunter-gatherers, and why trade was restricted to relations with strangers. Groups were small, usually comprising between 15 and 50 persons, and everyone knew and depended upon everyone else. Trust was essential to individual survival, and competition would have undermined trust. Trade is an inherently competitive activity: each trader tries to get the best deal possible, even at the expense of other traders. For hunter-gatherers, cooperation—not competition—was the route to success, and so innate competitive drives (especially among males) were moderated through ritual and custom, while a thoroughly entangled condition of mutual indebtedness helped maintain a generally cooperative attitude on everyone’s part.

Today we still enjoy vestiges of the gift economy, notably in the family. We don’t keep close tabs on how much we are spending on our three-year-old child in an effort to make sure that accounts are settled at some later date; instead, we provide food, shelter, education and more as free gifts, out of love. Yes, parents enjoy psychological rewards, but (at least in the case of mentally healthy parents) there is no conscious process of bargaining, in which we tell the child, "I will give you food and shelter if you repay me with goods and services of equivalent or greater value."

For humans in simple societies, the community was essentially like a family. Freeloading was occasionally a problem, and when it became a drag on the rest of the community it was punished by subtle or not-so-subtle social signals—ultimately, ostracism. But otherwise no one kept score of who owed whom what; to do so would have been considered very bad manners.

We know this from the accounts of 20th-century anthropologists who visited surviving hunter-gatherer societies. Often they reported on the amazing generosity of people who seemed eager to share everything they owned despite having almost no material possessions and being officially listed by aid agencies as among the poorest people on the planet. Anthropologists routinely felt embarrassed by this generosity, and, in one instance after another, after being gifted some prized food or a painstakingly hand-made basket, immediately offered a manufactured knife or ornament in return. The anthropologists assumed that natives would be happy to receive the trinkets, but the recipients instead appeared insulted. What had happened? The natives’ initial gifts were a way of saying, "You are part of the family; welcome!" But the immediate offering of a gift in return smacked of trade—something only done with strangers. The anthropologists were understood as having said, "No, thanks. I do not wish to be considered part of your family; I want to remain a stranger to you." It was the ultimate faux pas!

Here is all of economic history compressed into one sentence: As societies have grown more complex, larger, more far-flung and diverse, the tribe-based gift economy has shrunk in importance, while the trade economy has grown to dominate nearly every aspect of people’s lives, and has expanded in scope to encompass the entire planet.

With more and more of our daily human interactions based on exchange rather than gifting, we have developed polite ways of being around each other on a daily basis while maintaining an exchange-mediated social distance. This is particularly the case in large cities, where anonymity is fostered also by the sheer numbers of people one sees from day to day. In the best instances, we still take care of one another—through government programs and private charities. We still enjoy some of the benefits of the old gift economy in our families and churches. But increasingly, the market rules our lives. Our apparent destination in this relentless trajectory toward expansion of trade is a world in which everything is for sale, and all human activities are measured by and for their monetary value.

Humanity has benefited in many obvious ways from this economic evolution: the gift economy really only worked when we lived in small bands and had almost no possessions to speak of. So letting go of the gift economy was a trade-off for progress—houses, cities, cars, iPods, and all the rest. Still, saying goodbye to community-as-family was painful, and there have been various attempts throughout history to try to revisit it. Communism was one such attempt, and we know how that worked out. Trying to institutionalize a gift economy at the scale of the nation state introduces all kinds of problems, including those of how to reward initiative and punish laziness in ways that everyone finds acceptable, and how to deter corruption among those whose job it is to collect, count, and reapportion the wealth.

But, back to our tour of economic history. Along the road from the gift economy to the trade economy there were several important landmarks. Of these, the invention of money was arguably the most important. Money is essentially a tool to facilitate trade. People invented it because they needed a medium of exchange to make trading easier, simpler, and more flexible. Once money came into use, the exchange process was freed to grow and to insert itself into aspects of life where it had never been permitted previously. Money simultaneously began to serve other functions as well—principally, as a measure and store of value.

Today we take money for granted. But until fairly recent times it was an oddity, something only merchants used on a daily basis. Some complex societies, including ancient Egypt, managed to do almost completely without it; even in the U.S., until the mid-20th century, many rural families used money only for occasional trips into town to buy nails, boots, glass, or other items they couldn’t grow or make for themselves on the farm. In his marvelous book The Structures of Everyday Life: Civilization & Capitalism 15th-18th Century, historian Fernand Braudel wrote of the gradual insinuation of the money economy into the lives of medieval peasants: "What did it actually bring? Sharp variations in prices of essential foodstuffs; incomprehensible relationships in which man no longer recognized either himself, his customs or his ancient values. His work became a commodity, himself a ‘thing.’"

While early forms of money consisted of anything from sheep to shells, coins made of gold and silver gradually emerged as the most practical, universally accepted means of exchange, measure of value, and store of value.

gold bullionMoney’s ease of storage enabled industrious individuals to accumulate substantial amounts of wealth. But this concentrated wealth also presented a target for thieves. Thievery was especially a problem for traders: while the portability of money enabled them to travel for long distances to purchase rare fabrics and spices, highwaymen often lurked along the way, ready to snatch a purse at knife-point. These problems led to the invention of banking—a practice in which metal-smiths who routinely dealt with large amounts of gold and silver (and who were accustomed to keeping it in secure, well-guarded vaults) agreed to store other people’s coins, offering storage receipts in return. Storage receipts could then be traded as money, thus making trade easier and safer.

Eventually, goldsmith-bankers realized that they could issue paper receipts for more gold than they had in their vaults, without anyone being the wiser. They did this by making loans of the receipts, for which they charged a fee amounting to a percentage of the loan.

Initially the Church regarded the practice of profiting from loans as a sin—known as "usury"—but the bankers found a loophole in religious doctrine: it was permitted to charge for reimbursement of expenses incurred in making the loan; this was termed "interest." Gradually bankers widened the definition of "interest" to include what had formerly been called "usury."

The practice of loaning out receipts for gold that didn’t really exist worked fine, unless many receipt-holders wanted to redeem paper notes for gold or silver all at once. Fortunately for the bankers, this happened so rarely that eventually the writing of receipts for more money than was on deposit became a perfectly respectable practice known as fractional reserve banking.

It turned out that having increasing amounts of money in circulation was a benefit to traders and industrialists during the historical period when all of this was happening—a time when unprecedented amounts of new wealth were being created, first through colonialism and slavery, but then through the harnessing of the enormous energies of fossil fuels.

The last impediment to money’s ability to act as a lubricant for transactions was its remaining tie to precious metals. As long as paper notes were redeemable for gold or silver, the amounts of these substances existing in vaults put at least a theoretical restraint on the process of money creation. Paper currencies not backed by metal had sprung up from time to time previously; by the late 20th century, they were the near-universal norm.

Along with more abstract forms of currency, the past century has also seen the appearance and growth of ever-more sophisticated investment instruments. Stocks, bonds, options, futures, long- and short-selling, derivatives, credit default swaps, and more now enable investors to make (or lose) money on the movement of prices of real or imaginary properties and commodities, and to insure their bets, and even their bets on other investors’ bets.

Probably the most infamous investment scheme of all time was created by Charles Ponzi, an Italian immigrant to the U.S. who, in 1919, began promising investors he could double their money within 90 days. Ponzi told clients the profits would come from buying discounted postal reply coupons in other countries and redeeming them at face value in the United States—a technically legal practice that could yield up to a 400 percent profit on each coupon redeemed due to differences in currency values. What he didn’t tell them was that each coupon had to be redeemed individually, so the red tape involved would entail prohibitive costs if large numbers of the coupons (which were only worth a few pennies) were bought and redeemed. In reality, Ponzi was merely paying early investors returns from the principal amounts put down by later investors. It was a way of shifting wealth from the many to the few, with Ponzi skimming off a lavish income as the money passed through his hands. At the height of the scheme, Ponzi was raking in $250,000 a day, millions in today’s dollars. Thousands of people lost their life savings, in some cases having mortgaged or sold their houses in order to invest.

A few critics (primarily advocates of gold-backed currency) have called fractional reserve banking a kind of Ponzi scheme, and there is some truth to the claim. As long as the real economy of goods and services within a nation is growing, an expanding money supply seems justifiable, arguably necessary. However, a resource-consuming economy cannot continue to grow forever on a finite planet. Units of currency—which exist today mostly in the form of electronic bookkeeping entries—are essentially claims on labor and resources; and, as those claims multiply (with the growth of the money supply), and as resources deplete, eventually the remaining resources will be insufficient to satisfy all of the existing monetary claims. And so those claims will lose value, perhaps dramatically and suddenly. When this happens, paper and electronic currency systems based on money creation through fractional reserve banking will produce results somewhat similar to those of a Ponzi scheme: i.e., a few may profit, at least temporarily, but the vast majority will lose much or all of what they have.

Is this the end of the story? As society dramatically simplifies itself in the wake of fossil fuel depletion, will we revert to some form of gift economy? Or will we catch and steady ourselves on some intermediate rung on the ladder of economic development?

Only time will tell. Perhaps a general knowledge of our economic history can help us assess the options ahead and plan for a managed "money descent," just as some far-seeing Transition communities are planning for "energy descent."

The Value of the Household Economy

In the 1981, the value of the economic production by households was estimated by Robert Eisner and his colleagues at Northwestern to total $1,709 billion. That amounted to 37.5 percent of the “extended GNP” of $4,560 billion. In 1998, Redefining Progress, a nonprofit organization based in San Francisco, pegged the value of household work in 1998 at a total of $1.911 trillion – about one quarter the size of the U.S. gross domestic product (GDP) that year.

Thursday, April 29, 2010

BALTA’s Social Economy Research Program

BALTA’s Research Program – 2006-2011
What is BALTA?
BALTA is a regional coalition of community based organizations in the social economy and academic institutions
with an interest in research and studies on the social economy. It was created in 2006 to conduct research
directed towards better understanding and strengthening the social economy in Alberta and British Columbia,
Canada. BALTA is receiving funding from the Social Economy Suite program of the Social Sciences and
Humanities Research Council of CANADA (SSHRC) for a five year program of research.
BALTA’s research is broadly focused in four program areas/teams:
Social Economy Research Cluster (SERC) 1 – The Social Economy in Human Services and Housing
Social Economy Research Cluster (SERC) 2 – The Social Economy in Rural Revitalization & Development
Social Economy Research Cluster (SERC) 3 – Analysis, Evaluation, and Infrastructure
Mapping of the Overall Social Economy in Alberta and British Columbia
Each SERC includes community based practitioners and academic researchers. Individual projects are generally
led by one or two SERC members and frequently employ students as research assistants. The thematic division
between SERCs is in practice somewhat arbitrary. Research projects initiated by one team or another often
cross over into areas relevant to other SERCs. We also have several projects that were designed specifically as
“cross-cutting” projects linked to more than one SERC.
List of BALTA Projects (Effective April 2010)
(Completion Date or Anticipated Completion Date in Brackets)
SERC 1 Projects – The Social Economy in Human Services and Housing
A1–2007 Innovative Use of Housing Co-operative Assets (Completed 2008)
A2–2007 Co-operative Models of Social Care (2008 for initial reports; book to be published mid-2010)
A3–2007 The Social Purpose Capital Market in B.C. and Alberta (Completed 2009)
A4–2007 Role of Faith Based Organizations in the Social Economy (Completed 2009)
A5-2008 Affordable Housing Assessment and Strategic Planning, Kootenay Region (Completed Mid-2009)
A6-2009 The Fraser Valley Social Economy with Reference to Affordable Housing Provision and Related Support
Services (Mid-2010)
A7-2009 Co-op Housing Futures: A Spatial Design Research Approach (Mid-2010)
A8-2009 Creating a Database of Social Enterprise Capital Providers in BC and Alberta (Mid-2010)
A9-2009 Affordable Housing: Sustainable Management of Housing by Not-for-Profits and Co-ops (Completed 2009)
A10-2009 Role of Faith Based Organizations in the Social Economy – Phase 2 - The Role of Catholic Religious Orders and
the Mennonite Community (2011)
A11-2010 Success Factors for Recently Incorporated BC and Alberta Co-operatives (Fall 2010)
A12-2010 Rural Seniors Housing Needs in the West Kootenay Boundary Region (2011)
SERC 2 Projects – The Social Economy in Rural Revitalization & Development
B1–2007 Understanding the Role of the Social Economy in Advancing Rural Revitalization & Development (Ended 2007)
B2–2007 Sustainability and the Social Economy (Completed 2009)
B3-2007 Sustainability, Heritage Conservation and Sheltering the Social Economy (Completed 2009)
B4-2008 Social Economy Case Studies in Rural Alberta (2010)
B5-2008 Farmers’ Markets as Social Economy Drivers of Local Food Systems (Final results integrated with Phase 2 - B7)
B6-2009 Prospects for Socializing the Green Economy: The Case of Renewable Energy (Mid-2010)
B7-2009 Farmers’ Markets as Social Economy Drivers of Local Food Systems: Phase 2 (Mid-2010)
B8-2009 Social Economizing Sustainability (August 2010)
SERC 3 Projects – Analysis, Evaluation, and Infrastructure
C1–2006 Summary of Quebec Polices that are Supportive of the Social Economy (Completed 2006)
C2–2006 Nova Scotia Co-operative Development System Case Study – Phase One (Completed 2007)
C4–2007 Preliminary Profile of the Size and Scope of the Social Economy in Alberta and BC (Completed 2008)
C5–2007 From Social Economy to Solidarity Economy: Changing Perspectives in a Volatile World – Phase 1
(Completed 2007)
C6–20071 From Social Economy to Solidarity Economy: Changing Perspectives in a Volatile World – Phase 2
(Completed 2007)
C7–2007 Nova Scotia Co-operative Development System Case Study – Phase 2: Analysis of Application in BC and
Alberta (Completed 2009)
C9–2007 CED and Social Economy Policy Inventory in BC and Alberta – Phase 1 (2010)
C10–2007 Municipal Government Support of the Social Economy Sector (Spring 2010)
C11–2007 Credit Unions as a Financing Source for the Social Economy (Completed 2008 – no report)
C13-2008 Return on Taxpayer Investment for Training Businesses (Completed 2009)
C14-2008 Leadership in the Community Sector: Understanding the Challenges, Competencies and Needs of
Practitioners in the Social Economy (Completed 2009)
C15-2008 Taking Social Embeddedness into Account in Monitoring the State of the Social Economy and Community
Resilience (Fall 2010?)
C16-2009 Survey of Social Enterprises in Alberta and British Columbia (Mid-2010)
C17-2009 Building a Supportive Environment for Social Enterprise: Synthesis of SERC 3 Research (2010)
C18-2009 Procurement Policy & Market Development for the Social Economy: ExpandingMarket Opportunities for
Social Enterprise, Co-operatives, and Other Social Economy Businesses (Completed 2009)
Cross-Cutting Projects
D1–2006 Preliminary General Literature Reviews for Three BALTA SERCs (Completed 2007)
D2–2007 Leveraging Social Ownership of Proprietary Trademarks related to the Golden Mussel as a Base for Expansion
of Social Enterprise in Coastal B.C. Aboriginal Communities (2010)
D3-2008 Land Tenure and the Social Economy (Completed 2009)
D4-2008 Sustainable Infrastructure for the Social Economy: Cluster-based Social Enterprise Models (Completed 2009)
D5-2008 Credit Unions as a Financing Source for the Social Economy and Rural Community Re-investment
(Completed 2009)
D6-2009 Foundations for the Social Economy (Initial outputs Fall 2009; 2011)
D7-2009 Land Tenure and the Social Economy – Phase 2 (Mid-2011)
D8-2009 Credit Unions and Rural Reinvestment – Phase B (Mid-2010)
D10-2009 Advancing the Social Economy Through Networks and Collaboration (Mid-2010)
D11-2010 The Role of Social Enterprise in Employment Services in the British Columbia Context (Fall 2010)
Mapping Projects
E1–2006 Mapping Framework Development (Completed 2007)
E2-2007 Mapping the Social Economy in Alberta and B.C. – Phase 1 (Completed 2009)
E3-2008 Mapping the Social Economy from the Ground Up: A Neighbourhood Case Study (Fall 2009)
E4-2009 BALTA Mapping 2009-2010 – Survey, Survey Analysis, and Data Archiving (2011)
9777B Somers Road
Port Alberni, BC, V9Y 8N9, Canada
Tel: 250-723-2296
BALTA gratefully acknowledges the

Wednesday, April 28, 2010

The Share Food Program: Do good, feel good, eat good

The SHARE Food Program is a nonprofit organization serving a regional network of community organizations engaged in food distribution, education, and advocacy. SHARE promotes healthy living by providing affordable wholesome food to those willing to contribute through volunteerism.

“Do good, feel good, eat good.”

A smart idea that brings community and healthy food together

What is SHARE?

SHARE — an acronym for Self-Help and Resource Exchange – is a program where people get a break on their grocery bills by exchanging volunteer time for the opportunity to buy affordable food. For each package of food purchased, we simply ask for two (2) hours of “good deed” time, whether at SHARE, other institutions in your community, or your own neighborhood.

Food packages (worth up to $45) offer meats, fresh fruits and vegetables and grocery items. SHARE purchases the food from growers, brokers and packaging plants. SHARE Food is never donated, government surplus, or salvage.

SHARE is unique: SHARE is for everyone; “If you eat, you qualify.” Everyone in the community can participate. Because it is for everyone, it can help break down barriers that divide people – barriers like race, religion, social and economic classes, gender and age. When we break down barriers, we can begin to see each other as real people, and begin to build community and neighborhoods.

SHARE is community service: Community service is defined as random acts of kindness, or service to benefit one’s neighbor or community. Anything you do for another person or organization without pay is community service. It might be helping a neighbor, teaching Sunday School, assisting a teacher, delivering meals to the elderly, organizing a group to clean up the neighborhood, setting up a crime watch, helping with scouts or little league, and many other things we may never have thought of! You decide. You report. SHARE trusts you to do your part!

SHARE is a partner in the community: SHARE operates through Host Organizations which are run by churches, community centers, schools, businesses, senior centers and tenant councils. Host Organizations have two responsibilities: the first is to register people for purchases of SHARE packages and to offer them ideas about community service; the second is to send participants to help bag food, and to pick up and distribute food on distribution day at their Host Organization.

In summary: SHARE is truly a Self-Help and Resource Exchange program. It is an opportunity for people to share their gifts with the community and get something in return. For some it means stretching their food dollars, while for others it is the difference between having food on the table or going hungry.


Affordable: SHARE food packages assure top value for your food-buying dollar. SHARE is simply a smart way to save dollars and help the community at the same time.

Basic: Basic foods and basic packaging are the heart of the SHARE food packages. Although they contain some processed foods, the majority of the food packages are made up of basic, wholesome foods families can purchase every month and prepare the way they like it.

Consistent: SHARE provides fresh, wholesome, healthy foods month after month, year after year. Our Value Package always contains meats, fresh fruits and vegetables, and staple items such as beans, rice, pasta, or cereal, plus a few specialty items.


Register: Fill out a monthly Menu/Order Form online, at SHARE or with a neighborhood Host Site.
Pay: You pay for the amount of whatever you buy from the menu. If you have your food delivered to your Host, you pay just $1 per package and 10¢ per preference item.
Volunteer: Give two hours of volunteer service in the community for each package of food you purchase.
Pick Up: Pick up your SHARE food at the SHARE warehouse or at the neighborhood Host on a scheduled food distribution day.
Receive: Receive approximately $35 to $45 worth of quality frozen meats, fresh fruits and vegetables, and shelf stable items at approximately 50% savings.
Register: Obtain a menu for the following month.

volunteer YOUR Way!

Here are just a few of the diverse activities SHARE shoppers have reported to us:

* Cooking for a sick neighbor
* Helping at a local church, school, library, hospital or senior center
* Baby-sitting for a friend or neighbor
* Serving at a homeless shelter, emergency assistance center, nursing home or other non-profit organization
* Coaching youth ball teams and acting as a youth leader or mentor
* Assisting at Host Sites with registration, transportation and distribution. Ask your Host Site what you can do
* Working in at the SHARE warehouse during a bagging week or on distribution days, or in the SHARE office any weekday.


· SHARE Food Program, Inc. in Philadelphia , PA, is an independent organization that is not affiliated with any other existing or former SHARE entity nationally or internationally.

· SHARE is a non-profit corporation registered as a 501(c) 3 with the Internal Revenue Service and as a charity with the Pennsylvania Department of State.

· Donations to SHARE are tax deductible.

Two bills in Congress promote ESOPs, worker co-ops

On December 18, 2009, Senator Bernard Sanders (I-VT) introduced two new bills that would seek to expand employee ownership in the United States. The first bill, the Worker Ownership, Readiness, and Knowledge (WORK) Act (S. 2909) would create an Office of Employee Ownership and Participation within the Department of Labor. This Office would promote employee ownership and employee participation in company decision making by providing education and outreach, training, grants, and technical support for local programs dedicated to the promotion of employee ownership and participation, such as the Ohio Employee Ownership Center and the Vermont Employee Ownership Center. The work of these two centers is a large part of the reason for the prominence of employee ownership in Ohio and Vermont. The opening of similar centers in other states could ease access to the wealth-building and job creation benefits of employee ownership in those states.

The second bill, the U.S. Employee Ownership Bank Act (S. 2914), would provide loans and loan guarantees to employees to purchase a business through an employee stock ownership plan (ESOP) company or a worker-owned cooperative (51 percent worker ownership would be required). The bill would also mandate giving employees a chance to purchase a plant that was being shut down if they could raise sufficient funds and would make bank lending to start-ups of worker cooperatives and ESOPs an eligible Community Reinvestment Act activity.

The bills are co-sponsored by Senator Patrick Leahy (D-VT), Senator Sherrod Brown (D-OH), and Senator Robert Menendez (D-NJ).

J. Michael Keeling, President of The ESOP Association praised both bills. “S. 2909 seeks to expand programs that several states have established to help business owners create employee-owned companies,” Keeling said. “S. 2914 is a bold new approach proposing, for the first time, a Federal loan guarantee program to save jobs in certain situations when the result of the financing would be a company owned 50% or more by the employees.”

Corey Rosen, Executive Director of the National Center for Employee Ownership, noted in this column that, “NCEO research on the programs in the late 1980s showed that [state employee ownership technical assistance centers] increased the incidence of employee ownership plans in the states by about 20% to 33% above what would have otherwise been the case. I have long believed that these kinds of programs are the most cost-effective way to move employee ownership forward given the existing tax benefits the plans already have.”

As the One Stop ESOP Blog pointed out, Senator Sanders, in introducing the two bills, gave three primary reasons for promoting greater federal support for ESOPs. These were:

1) The economy benefits because, absent employee ownership, many businesses would close down or ship jobs overseas; With employee ownership, businesses stay open and employ American employees;

2) Retiring small business owners find buyers for their businesses [the employees], compensating them for years of hard work; Employee owners retain their jobs, share in future profits, and have greater control over their own vocation; and

3) Company performance is often improved through increases in productivity due to employee ownership and participation; and the community benefits from having the company more deeply rooted in the community.
Posted by Steve Dubb on 03/29/2010 at 12:27 PM

Tuesday, April 27, 2010

The Cleveland Model and Micromanufacturing: An Opportunity for Collaboration?

From P2P Foundation
Kevin Carson
6th April 2010

The role of open manufacturing in “community bootstrapping”—i.e., the bottom-up economic development in struggling communities, using their own local resources—has been discussed more than once on the P2P Research and Open Manufacturing lists.

Experiments in commons- or cooperative-oriented local economies have also been a topic of interest. Most recently, my post on the cooperative economy in Salinas falls into this category.

Lately, the decaying rust belt city of Cleveland—aka “the Mistake by the Lake,” where the poverty rate is 30%—has attracted a lot of attention from the cooperative economics community with the Evergreen Cooperative Initiative. I argue in this article, among other things, that it’s an unprecedented opportunity for micromanufacturing enthusiasts to put their ideas into operation.

The micromanufacturing and open hardware movements are actively engaged in building the technological basis for the libertarian, decentralized manufacturing economy of the future. And right now Cleveland is engaged in the biggest experimental project around for building a relocalized cooperative economy. An alliance between the micromanufacturing movement and the Cleveland model would seem to be the opportunity of a century.

The Evergreen Cooperative Initiative is heavily influenced by the example of Mondragon. The project had its origins in a study trip to Mondragon sponsored by the Cleveland Foundation, and is described by Andrew MacLeod as “the first example of a major city trying to reproduce Mondragon.” Besides the cooperative development fund, its umbrella of support organizations includes Evergreen Business services, which provides “back-office services, management expertise and turn-around skills should a co-op get into trouble down the road.” Member enterprises are expected to plow ten percent of pre-tax profits back into the development fund to finance investment in new cooperatives.

The Evergreen Cooperative Laundry was the first of some twenty cooperative enterprises on the drawing board, followed by Ohio Cooperative Solar (which carries out large-scale installation of solar power generating equipment on the roofs of local government and non-profit buildings). A third and fourth enterprise, a cooperative greenhouse and the Neighborhood Voice newspaper, are slated to open in the near future.

The Initiative is backed by stakeholders in the local economy, local government and universities. The primary focus of the new enterprises, besides marketing to individuals in the local community, is on serving local “anchor institutions”—the large hospitals and universities—that will provide a guaranteed market for a portion of their services. The Cleveland Foundation and other local foundations, banks, and the municipal government are all providing financing. The Evergreen Cooperative Development Fund is currently capitalized at $5 million, and expects to raise at least $10-12 million more.

Besides the Cleveland Foundation, other important stakeholders are the Cleveland Roundtable and the Democracy Collaborative. The Roundtable is a project of; Community-Wealth, in turn, is a project of the Democracy Collaborative at the University of Maryland, College Park. All three organizations are cooperating intensively to promote the Evergreen Cooperative Initiative.

This is one of the largest and most promising experiments in cooperative economics ever attempted in the United States, with an unprecedented number of local stakeholders at the table.

Putting conventional business enterprises under local, cooperative ownership is important, but it is only one leg of a three-legged stool. The two other legs of the stool, what is variously known as garage manufacturing or micromanufacturing, and the household and informal economy, are the subject of the rest of this post.

Building New Synergies: Micromanufacturing

As important as the cooperative model is, and as much as I admire efforts to build local economies on that model, changes in ownership alone are not enough. I get the impression that the primary focus of the Cleveland effort, so far, is on changing the structure of ownership and management, without much attention to the potential that new forms of production technology offer for freeing local economies from the need for external financing.

The orthodox model of community economic development is to encourage large-scale capital investment from outside as a source of employment, usually in the form of corporate colonization when local politicians can offer a sufficient tax break or subsidy to persuade some corporate home office to locate a plant in the local industrial park. But as Jane Jacobs pointed out decades ago, the best approach to community economic development is import substitution using local resources—particularly by putting formerly waste resources to use.

Recent developments in micromanufacturing technology coming out of the Fab Lab and hackerspace movements offer the potential of powerfully reinforcing efforts at import-substitution. Technological developments are causing the bottom to fall out of the price of producer goods. A garage full of CNC machine tools can produce what used to require a factory. Such garage factories, networked together with open source product design communities, can serve as the basis for flexible manufacturing networks with facilities even smaller and more affordable than those of Emilia-Romagna (see, for example, the 100kGarages project). And with the kinds of homebrew machine tools developed in the past few years by various open source hardware projects—open source lathes, routers, milling machines, cutting tables, and 3-D printers—the garage factory can be put together for under $10,000 (see, for example, the Open Source Ecology project’s plans for a Fab Lab). The practical effect is to make investment capital far less relevant as a bottleneck for local economic development. This dovetails with the strategy Jacobs recommended: Every technological change that reduces the capital outlays required for producing local consumption needs is a force multiplier, not only making import substitution more feasible but increasing its cost-effectiveness, and enabling local economies to do more with less.

There is enormous potential for fruitful collaboration between the Cleveland experiment and the micromanufacturing, Fab Lab and hackerspace movements.

What local resources exist in Cleveland right now for a networked micromanufacturing economy? Perhaps someone in our readership knows of someone in Cleveland with CNC tools who would be interested in joining the 100kGarages micromanufacturing network. Or someone in the Cleveland area with the appropriate skills might be interested in organizing a hackerspace.

Area universities are among the leading stakeholders in the Cleveland effort. Universities like Stanford, MIT and UT Austin have played a central role in creating the leading tech economies in other parts of the country, and the flagship project of the Fab Lab movement is the Austin Fab Lab created under the auspices of UT. Perhaps the engineering department at one of the universities involved in building the Cleveland Model would be interested in supporting local micromanufacturing projects. Or maybe some high school shop classes, or community college machining classes, would be interested in collaborating to build a local Fab Lab.

From the other direction, is anyone involved in networked manufacturing projects like 100kGarages, or in the Fab Lab and hackerspace movement, interested in feeling out some of the stakeholders in the Cleveland initiative?

Building New Synergies: Eliminating Barriers to Microenterprise

To repeat, it’s necessary to go beyond simple changes in the pattern of ownership that leave otherwise untouched the conventional model of business enterprise and treat current production technology as a given. Embracing new low-cost forms of manufacturing technology is one way to do this. But equally important is embracing the potential of old forms of production technology in the informal and household sector: the household microenterprise.

Micromanufacturing is a force multiplier because new, cheaper production technologies free local economies from dependence on external capital finance for organizing the local production of local needs. The microenterprise, on the other hand, is a force multiplier because it puts existing underutilized capital equipment to full use. The household microenterprise operates on extremely low overhead because it uses idle capacity (“spare cycles”) of the ordinary capital goods that most households already own.

The Cleveland initiative could achieve very high bang for the buck, in building a resilient and self-sufficient local economy, by eliminating all the local regulatory barriers to microenterprises operating out of people’s homes.

One of the greatest strengths of the alternative economy is its low capital outlay requirements and low overhead. The central effect of high capital outlays and overhead is to increase the size of the revenue stream required to service that overhead. Anything that reduces fixed costs also increases resiliency by reducing the size of the revenue stream required for basic survival. This is true of the small business enterprise, or of the “enterprise” of subsistence activity within the household. The lower the level of fixed costs and the revenue stream required to service them, the longer the periods both the small business and household can weather economic downturns and survive periods of low cash flow. For the small enterprise, this means the lower the volume of business required to keep it solvent, the larger the share of revenues that are a source of income free and clear, and the less meaningful the distinction between being “in business” and “out of business.” For the household, the larger the share of consumption needs that can be met either through direct household production for consumption or production for exchange in the informal economy, the less outside money income from wage labor is required for survival; hence, the household income pooling unit can survive with fewer wage earners and less full-time work.

Compare the household microenterprise to a conventional business. A household microbakery, for example, can function with virtually zero overhead cost because it uses an ordinary kitchen oven, refrigerator, dishwasher, etc. It pays no rent or mortgage besides what the residents would have paid anyway to keep a roof over their heads. So any income the home-baked bread brings in over and above the cost of ingredients is free and clear, and the microenterprise can ride out periods of slow business without piling up any debt.

But if the microbakery becomes sufficiently active to fully utilize the oven baking bread for the neighbors and farmers’ market, it may fall afoul of local zoning laws requiring operation to pay rent on a stand-alone piece of commercial real estate. Local safety codes may mandate expensive modifications of the structure, as well as expensive industrial size ovens and dishwashers. The result of this enormous capital outlay and overhead is the imperative to “get big or get out,” in order to service the fixed costs. A conventional business like this can’t afford to ride out periods of slow business, because the rent keeps coming due and the bank keeps demanding interest on the loans.

Other illustrations of the same principle include the out of work plumber who operates out of his van or truck, buying materials at the local hardware store and charging for straight parts and labor without the need to cover an employer’s cut or the high overhead of office rent and clerical staff. Or the unlicensed cab service consisting entirely of a family car and cell phone, without the $300,000 medallion. Or the beautician who operates illegally part-time out of her home, serving her friends and neighbors. Or the similarly unlicensed home daycare facility in which an unemployed person provides affordable care for the kids of her working neighbors.

When you consider the portion of such services that we consume that could be organized out of people’s homes, with a tiny fraction of the capital outlays and overhead mandated by local regulatory regimes, and with people directly transforming their own skills into a source of subsistence without the intermediation of a wage employer, the potential is absolutely revolutionary. If a significant portion of people in Cleveland with good sewing skills and a sewing machine started putting them to use for trade, and a significant portion of the unemployed and underemployed started turning to such home operations as their primary source of clothing—and ditto for home barbers and stylists, home-based daycare, plumbing, unlicensed cabs, bakers, etc.—it would be revolutionary.

Ted Trainer has argued that LETS systems and local currencies are virtually worthless unless they accompany the creation of new ways for the currently unemployed and underemployed to earn local currency through their own productive efforts. Otherwise, a LETS system becomes a glorified yuppie Green Stamps program where people earn official currency at their wage and salary jobs, exchange dollars for local currency, and spend it at participating local greenwashed enterprises. Trainer proposes Community Development Corporations to raise capital for new, local cooperative enterprises in which people can earn purchasing power in the local economy. But the most overlooked source of capital for employing people outside the wage system is the “plant and equipment” already located in people’s own homes: the ovens, sewing machines, home brewing equipment, garage workshops, and gardens.

Households already have the capital equipment and skills needed to meet a major portion of total consumption needs by such means, right here and now. And doing it, shifting that portion of demand from store goods purchased with wages to direct production for barter, would be—I repeat—revolutionary. It would be a devastating shift of economic activity from the corporate sector to the informal economy.

If such household production could be exchanged for the goods and services of larger, more conventional enterprises, within the framework of a local barter system like Tom Greco’s mutual credit clearing network, the effect would be revolutionary squared. Throw in garage microfactories into the mix, ignoring industrial patents and producing cheap generic replacement parts and accessories to keep mass-produced industrial goods in service and thwart planned obsolescence, and exchanging their services on the barter network with both the conventional cooperatives and the microenterprises, and we get revolution cubed!

So one of the most helpful things the local government could do in Cleveland would be to eliminate the regulatory barriers to low overhead household production.

Building New Synergies: Eliminating Barriers to Cheap Subsistence by the Homeless and Unemployed

So far I’ve used the three-legged stool as a metaphor for the place of cooperative business enterprises in a larger counter-economy. But perhaps there’s room for a fourth leg. No matter how large a share of the goods and services we consume can be produced and exchanged in the counter-economy, most people still bear one significant fixed cost that can’t be met outside the wage system: their rent or mortgage payment. And most of the possibilities for informal production go right out the window when a household lacks sufficient employment income to pay the rent or mortgage, and people consequently lose the roofs over their heads.

So the problem of “informal housing” needs to be addressed in some way as part of the larger agenda.

If the local Mayor’s office, police department and/or sheriff’s department is comparatively enlightened—and it also helps if they’re fiscally strapped by an eroding tax base and the requirements of fighting real, violent crime—they may be persuaded to move foreclosure evictions to a relatively low priority. Ideally, the Police Chief and Sheriff are smart enough to figure out that, while the resident and the house will probably still be around in five years, the Delaware-chartered bank that hold the paper on the house may very well not be.

Unused public buildings, decommissioned military bases and abandoned National Guard barracks, etc., might be opened as bare-bones homeless shelters, with such basis amenities as group toilets, water taps and hot plates, to be self-managed and self-policed by their own residents on the same model as the federal migrant worker camp Steinbeck described in The Grapes of Wrath. Or local government land might be opened as camping grounds with shared water mains and portable toilets. At the very least, the same leniency might be adopted unofficially toward squatters that is shown toward defaulting tenants and home-owners.

In any case, regardless of official policy in the Mayor’s office and City Council, those involved in the local cooperative initiative can provide political support to the evicted, squatters and homeless. Linking up politically with homeless advocates and creating publicity around evictions, and using all available tools of networked activism (like swarming) to arouse public sympathy and organize pressure, would probably be quite productive.


A sector of conventional enterprises reorganized on a cooperative basis is a very important part of a resilient local economy. But the synergies it could achieve in combination with a vigorous micromanufacturing economy of garage factories, and a thriving household sector of household enterprises—all coalesced into a single counter-economy—are almost unimaginable.

Saturday, April 24, 2010

Santa Rosa's Share Exchange

Editor's Note: I had dreamed this space up for the lower Bay Area and there! Someone is already doing it in Santa Rosa! We should have one in every town, perhaps every neighborhood. I think shared physical space is more important than shared virtual space when it comes to relocalization.

The ShareExchange is a vibrant, "community-owned business" where people come to experience the cutting edge of local culture, cooperation and economic revitalization. The ShareExchange is home to a range of inter-relating activities. The diverse components of the business could stand on their own, but thrive when co-located.

The ShareExchange will be a significant contributor to growing the new local green economy. This includes incubating neighborhood-scale micro enterprises, new economic tools and green job information and training. It is envisioned that the ShareExchange will also be THE central place to get information on businesses and non-profits working on any element of sustainability and social equity.

ShareExchange Kiosk Open House on Prezi
Who will the ShareExchange Serve?

Community Members
The ShareExchange is likely to first appeal to the growing "do-it-yourself" (DIY) creative community and people interested in sustainable living practices. As the ShareExchange grows in recognition, it will become frequently used by under-served families and neighborhoods who directly benefit from the sharing culture and saving money. Geographically, the Exchange will be the closest place in the urban core to get food essentials, fresh produce and hardware. It will also be the only visitor-serving business along Santa Rosa Creek and the Prince Memorial Bike Path. Residents and visitors will enjoy the goods and services in such an attractive and convenient location.

Our development team will be soliciting existing businesses to expanding their enterprise with a "business outpost" at the ShareExchange. These will be our Major Tenants. Businesses who are GoLocal members will have first priority. Businesses with documented triple bottom line accounting practices will also have high priority. This goes for the major tenant slots as well as kiosk rental and sponsorship.

We have a lack of public gathering places focused on community well being. We believe that creating a vibrant place for people to gather, learn and experience will have an accelerating affect on the Sustainability Movement in Sonoma County. We hope to play a small role in a positive future -- and place matters.
What will it look like?

*An organized place to share things (tools, toys, sporting goods, household items, bikes & vehicles)
*Walking or biking to a central neighborhood place for daily goods and services
*Fixing & fabricating things with a major focus on materials reuse
*Neighborhood-scale micro enterprise incubation - things like backyard food gardens, repair businesses, recycling & reuse businesses
*Celebrating local arts & culture with an element fun and entertainment
*Healthy food market with a focus on "EAT LOCAL" and "DRINK LOCAL" featuring GoLocal members
*Local economy tools: The Sonoma County Time Bank, chore/services exchange, GoLocal Rewards headquarters and a future community reinvestment program
*Enriching classes that promote healthy living and community cooperation
*Job and skill training with a focus on the new local, green economy

The Need

Communities across the country are in need of a new type of economic revitalization -- a type that is based on relocalization of basic needs and essential goods. Localizing food production, bringing back local manufacturing and reintroducing cooperatives are all pieces of this puzzle. The ShareExchange model is a central location where these things happen under one roof. It is a hub for sustainable living and incubating a vibrant local economy.

While some of the services offered in the ShareExchange would work in a virtual setting, many of the services would not work online and require a physical place. The sharing of goods in one example where physical space is required to store the goods and provide a place for pick up and drop off. The social aspect of a physical gathering place should also not be underestimated. According to the Project for Public Spaces, gathering places provide opportunities for many things including:

*Health and activity within a community
*Improved social interaction
*Increased cultural exchange & understanding
*Economic vitality
*Civic engagement
*Environmental sustainability

Benefits of the ShareExchange

*People save money by sharing and being part of the cooperative.
*We reduce unnecessary consumption, therefore reducing many environmental impacts.
*Uses art, sustainability and localization as the drivers for economic development.
*Is a source of green job experience and education.
*Promotes and markets micro-enterprise incubation.
*Offers expansion opportunities for existing local businesses.
*It is a community gathering place in the urban core for residents and visitors.
*Enhances and highlights our local bohemian culture.

Projected Open Date: September 1, 2010
Space: 8,400 s.f. plus outdoor space
Location: 420 First Street, Downtown Santa Rosa, CA
Zoning: CD-7 - mixed use, downtown core.
The site is located within the Santa Rosa Gateways Redevelopment Project Area

Friday, April 23, 2010

WeCommune: Tech Support for Communes

From WorldChanging
Julia Levitt, 16 Jun 09

Post-ownership living may be closer than we think. We see the evidence all around us, in the form of innovations from community kitchens to emerging mobility solutions. So, if people are recognizing the practical potential in social solutions, why aren't even more models for collaboration, sharing and product-service systems thriving? According to architect Stephanie Smith, spurring the movement may be a simple matter of providing the tech support.

This week Smith, who heads WeCommune, plans to launch the first software platform designed specifically for, well, communing (if you visit, you may get a splash page while they transition). The platform's services will allow groups of three or more people to self-organize a "commune" defined by a shared interest or shared zip code, and will provide tools for communicating, organizing and managing projects, and sharing resources.

What is commune-support software?

WeCommune is a networking platform, outfitted with commune-specific project management applications that make it much different from a social networking tool. The software enables common and practical actions – for example, a group of members can organize a buying club, set up a rideshare system, or barter goods and services. And like everything on the web, WeCommune gives users the option to extend their reach: by networking to other communes, groups can make certain assets like bartering and goods-sharing pools more robust.

wecommune_logo.jpgWeCommune offers the basic platform free to anyone who wants to use it, and even the more complex services are available for a monthly subscription under $2. Smith hopes that by making it affordable she'll enable communes of all sorts – from those who are already sharing, like condo associations and college dorms, to neighborhoods and interest groups.

"We couldn't find anything out there like this," says Smith. "We feel like if we hit a home run, we're going to be the ultimate community application."

Why communes need the boost

In her L.A.-based studio, Ecoshack, Smith designs small-scale, modular projects like ecovillages, yurts and tipis that "invent new ways to live lightly on the Earth." But her real vision for sustainability acknowledges that the way people interact with one another, use resources and build community are the most important components of any environment, from eco-enclave to suburban cul-de-sac. As it turns out, a lot of people were willing to help her test her theory. When she launched a site called Wanna Start a Commune? as an Ecoshack spinoff, she quickly connected with three cul-de-sac neighborhoods in Southern California that invited her to help them start their own communes. Since then, she's become a self-titled "meta-starter of communes."

Almost from the first meetings of her three "Beta test" cul-de-sac communes, however, she noticed that even where there was intention, there weren't effective tools available for completing projects in a group. Nascent communes would have ideas, for example, to create a disaster preparedness plan for their neighborhood, or to turn a neglected space into a community garden. But coordinating schedules, resources, skill sets and other components of the plan among neighbors -- many of whom had never been in the same room before -- was more trouble than Smith had anticipated. Software seemed like an intuitive solution.

"The group members said, 'isn't there an iPhone app for that?'," she remembers. "And these aren't 21-year-olds; these are older people, too. I had to solve a technology problem."

Smith tested out versions of existing social networking software, including Ning and Yahoo! Groups, but didn’t find the functionality that she was looking for. So she sat down and designed her own, with the help of collaborator Matt French and programmer Josh Cain.

An unlikely champion

Smith doesn't live in a commune herself, and defines herself -- somewhat ironically -- as a loner. But her comfortable distance from the subject has given her a more objective lens for understanding community – how it works, and what gets in its way. She's been studying community since the mid-90s, when she explored it in her master's thesis at Harvard, under the tutelage of master architect Rem Koolhas. Smith found herself in China in 1996, a turbulent time characterized by extreme real estate speculation and the burst of a housing bubble. She focused her research on one intriguing social pattern: as groups of rural villagers moved to the cities in droves, they would often move collectively into one concrete apartment building, and re-create the community structure. Smith found the process fascinating. In her words, "They would take these global pieces of architecture as their own, and make them very local again." (Her thesis, To Get Rich is Glorious, is published in the collection Great Leap Forward.)

The community solution, Smith says, "allowed these people not only to be housed, but to be housed in these tight communities where they could flourish…it gave me hope that, in fact, local cultures would be able to fight globalization and stay intact." Now, she says, in the face of the global economic meltdown, she still sees hope for community-based solutions. Ultimately, she thinks, a worldwide trend toward resource-sharing could be just the medicine the economy needs.

It certainly seems like the right platform could touch off a communing revolution. But here's a thought: while we're in the kickoff phases, it might also be time for a new term that defines this particular brand of resourcefulness. Smith chose "commune" because it's actually pretty versatile (she cites Wikipedia's definition, "a community in which resources are shared"). But even though great, innovative ideas, practices and cultures emerged from communes in the 60s, the word itself remains pretty loaded with counter-cultural connotations that don't seems as universally sticky in 2009.

Is the 21st Century commune a strategic collaboration? Or does the stretchiness of communal resources make for elastic living? We'll work on some new language from our end, but in the meantime, call out your best ideas for the new communal meme in the comments.

Finding community (by any name) isn't that difficult, Smith says, but it can involve looking for things that aren't obvious to most people.

"You need to understand that your community isn't necessarily your group of best friends. You need to ask yourself, 'do we have a shared value set so that we feel comfortable planning projects and sharing resources over time? Do we have people of various ages who feel comfortable sharing their skills? Do we have a social infrastructure for getting things done?"

Other similar sites:

Thursday, April 22, 2010

Earth Day & The Real Inconvenient Truth

By Neal Gorenflo
04.22.10, 11:02am

Earth Day has zero appeal for me. Don’t get me wrong, I'm all for saving the earth. That's one of the reasons I help found Shareable. And I recognize the dramatic positive changes Earth Day catalyzed long ago.

It’s just that…

Back in 2000, when I lived in DC, I was invited to hang out back stage at the Earth Day concert on the Mall. This was supposed to be a cool thing, to mingle with all the celebrities. The thing I remember most is a certain celebrity that sashayed by our tent. I was stunned by the air of preciousness and contrivance that hung heavy like rank incense around her, and her bad plastic surgery. Truly bizarre.

Fact is, I was uncomfortable backstage. I didn’t want to talk to celebrities. I didn’t want to add to the intrusive crush of attention they likely feel all the time. It must be oppressive. Nor did I have any desire to play the role of worshipful fan. So I felt stifled. That atmosphere is the polar opposite of the peer sociality I seek, an atmosphere where everyone can speak freely.

Consider this. Celebrity culture directs our attention away from each other - and what we can accomplish together - toward icons carefully manufactured for our consumption, to stoke our desire, to stoke our consumption. Celebrities are gods in the pantheon of consumer culture. They play a leading role in the destruction of our civic life.

And Earth Day is a celebrity now. It’s a media event that asks us how we can be more green, when green has largely come to mean buying the right stuff. Moreover, when it's not being celebrated with concerts like the one on the Mall this year featuring Sting, then it's celebrated with token acts of environmentalism while the economic system that's destroying our planet doesn't miss a beat.

This economic system is cordoned off from citizens like a celebrity. It's coddled. It shoplifts. It has bodyguards. It's addicted not to coke, but to growth. It gets drunk and crashes not cars, but entire economies. We’re excluded from the political process to the degree that we have no more chance of having a real impact than of getting lunch with Lady Gaga.

With the crowds, celebrity worship, token acts, and all the ecofabulous crap being showcased, Earth Day reproduces consumer culture faithfully in all its boring glory. And in the process does little for, if not undermines, the citizenship needed to care for each other and the earth.

We should take what Al Gore said in his 2008 TED speech more seriously, “to solve the climate crisis, we have to solve the democracy crisis.”

This is the real inconvenient truth.

It’s inconvenient because it points to the root cause of environmental degradation – the exclusion of ordinary people from the political process and the spoils of their work. The inconvenient truth is that we can’t manage our natural resources for the long term without broadly shared decision making and access to resources. The inconvenient truth is that a sustainable world is only possible if it’s shareable.

But nobody seemed to take much note of that speech, impassioned as it was. I guess changing light bulbs is easier, though it leaves the truth in the dark.

This conundrum prompted me to do a search to see if there are any Earth Day voter registration drives today. Slim pickings, though in the top five results, I found one in Ohio, organized by Robert Wofter, where no one signed up to volunteer.

I salute you Robert Wofter. Today, you are my Earth Day hero, as lonely as you might be at your voter registration table.

Wednesday, April 21, 2010

Bernal Bucks Makes Baby Steps Towards Local Currency Implementation

By Mira Luna

Guillaume Le Bleu, co-initiator of Bernal Bucks, presented his “currency” project at Bay Area Community Exchange’s Project Roundtable meeting last Tuesday. His neighborhood money tagging project, started only 6 months ago, has strong community support and has caught the attention of the Transition Towns movement. Guillaume, with a background in financial services technology, has strong inclinations towards the gift economy, but sees exchange on a continuum, not a polarity of good gift economy vs. bad US dollars. Context again is everything. More gifts and local currencies could help bring balance to a grossly unbalanced economy. Tagging money with legal, removable stickers that brand communities of exchange is one way to bridge community currencies, US dollars, and gift economies.

Communities branding their money, helps control the flow of money like local currencies do, re-circulating it through local business and keeping it from filtering profit to corporate banks and other unaccountable, nonlocal businesses. In fact, the community can decide who benefits from the donations that back the tags (funds go to the local community center and school). However, unlike local currency, tagged money is relatively cheap to implement ($300/5000 stickers), comes with no risk to businesses and few other barriers to business participation. After all it’s just money with a removable, branded, trackable sticker. 18 merchants are currently participating and giving away anything from a free beer to free fluorescent light bulbs for use of Bernal Bucks. No merchants have dropped out of the program so far. It is unclear how much commerce has been redirected to local businesses due to the program, but Cole Hardware noted significant usage of the tagged money.

There are some challenges however. Tagged money comes with legal restrictions - no advertising of any kind (no urls, advertising for nonprofits, etc) and no defacing of bills (solved by the removeable glue). Businesses, banks and individuals to keep the bills circulating locally should separate them from regular cash lest they leak out of the local economy – not the easiest thing to do given the stickers are only on one side. Clerks may not be enthused enough to make sure this happens if they live outside the community. Individuals and businesses aren’t too interested in the code that helps track the currency’s circulation, even though this is very valuable information for creating better local economic flows. However, as the project moves to VISA debit card functionality, all of this will be much easier and more automatic.

Part of the community enthusiasm for the project comes from its direct benefit and responsiveness to the community. Stickers get into circulation through donations to the local community center and school, which is an obvious noncontroversial benefit. Bernal Bucks also regularly talks with business owners, nonprofits and residents (through hosting community economic forums) to get feedback on the project and its future direction. Guillaume and his partner, Arno Hesse, live in the community, which helps create a sense of community ownership of the project. Any future community tagging projects, Arno insists, should be initiated and implemented by those communities and not by outsiders.

Eventually, they hope they may be able to filter Bernal Bucks through a special account that will draw interest and fund more community projects and make the administration of Bernal Bucks self-funded. What other innovations are possible? Bernal Bucks is only the first baby step in getting the public and business community excited about alternative currencies without the usual fears and technical challenges that come up.

Still the program is limited in building local economies. It is only as abundant as US dollars, and people have to buy the stickers at $1/sticker, though currently all $1 goes to nonprofits. It has all the challenges of the centralized monetary system without some of the benefits of a real local currency. But just like Berkshares may be laying the foundation for a new kind of regional currency in Massachusetts, so may Bernal Bucks be laying the foundation for local currencies to take over the San Francisco Bay Area. One can hope – we may be closer than we think.

Social Enterprises or Solidarity Economy?

From Towards the Economic Democratization
Miguel Yasuyuki Hirota
April 21, 2010

As I’ve been trying to link East Asian players of solidarity economy with their counterparts in the rest of the world, recently I’ve come across quite a few people who work for social enterprises and I realised that this term is much more popular here (in Japan, Korea, Taiwan, Hong Kong and recently in China too) than solidarity economy. These two movements seem to pursue similar goals but I’d like to make clear the fundamental difference between these two concepts.

It’s quite important to remember the fact that the first initiative of social enterprise emerged in United Kingdom and that this spread into other countries, especially other English-speaking ones. On the other hand, the use of the word “solidarity economy” is quite common in those countries where one of Romance languages is spoken, such as France, Italy, Spain, Canada (especially Québec), Latin America and Senegal. And this explains why the term “solidarity economy” remains almost unknown in Asia, as nowadays the use of French, Spanish and Portuguese is very rare, if any, in this continent.

The key concept of social entrepreneurship is that you run a business with social and/or eco-friendly goals, such as creating jobs for the handicapped and providing microcredit to financially-excluded poor communities, not necessarily challenging the conventional capitalism. That is why thousands of private-owned corporations with some social goals are also regarded as social enterprises, which is little plausible in case of solidarity economy. And I found a conference on social entrepreneurship with HSBC as sponsor, but I can’t imagine this multinational financial institution working together solidarity economy. Maybe they’re concerned rather about building a sustainable capitalism than about achieving social justice.

Solidarity economy, on the contrary, has been promoted as an alternative to the neoliberal globalisation, especially at World Social Forum, the counterforum for World Economic Forum, and players see any sort of capitalism as exploitative. So workers’ coops and other sorts of cooperatives are the main players of this economy, although some social enterprises can fit into this category too.

I don’t think it’s a mere coincidence that these two different cultures have promoted different terms as these two are based on different socioeconomic values. Nobody doubts that capitalism has been developed at best in Anglo-Saxon countries, and social entrepreneurship is much more convenient than solidarity economy for, at least, some people there since this will keep the very structure of capitalism intact while those with Latin passion tend to question it. And in this sense Asia is so Anglo-Saxonised that the élites find it much easier to deal with social enterprises than solidarity-based cooperatives, also with the aim to preserve the capitalist principles.

Maybe I’m biased, but for me this is one of the biggest challenges I’ve ever faced with as promoter of solidarity economy, as Asians tend to prefer English-speaking world to the Latin world. What can we do to trigger a paradigm shift here?

Monday, April 19, 2010

Rules vs. Relationships in Currencies

I was thinking today about our timebank we created here in the SF Bay Area and about the question of balance limits on mutual credit accounts and also issuing paper hours on accounts.

I realized that possibly we need different exchange systems or at least different rules for varying levels of abundance. By that I mean, the ability to do work is fairly abundant. People have the ability to reprioritize their time to do service work. For some people time is quite scarce but for most people it is a matter of priority. However, many goods and a few high skilled services are actually somewhat scarce. Proper distribution of these things would help somewhat, but the environment and people's skill level do have some limits. The Earth is not infinitely abundant. If you think so, you haven't noticed the impact on other species, the Earth in general and the poor of this country and "developing" countries.

Different kinds of goods and services have different levels of abundance. Now there is a long way we can go towards creating more abundance where it doesn't already exist: resource efficiency through sustainable design, minimal sufficiency of lifestyle, urban food production, housing cooperatives, reducing population, scaling up training of skilled healers (like the barefoot doctors in China or Cuba's medical training programs). But we also need to design appropriate exchange systems for things that are based on their current scarcity. For example, low and medium skill services can do quite well in a timebank with less rules and more agreements through direct relationships. Having less rules will probably allow these less skilled services flow more abundantly to those that need them. Reusable goods also can be traded freely at Really Really Free Markets or on Freecycle or Craiglist as they are still quite abundant. However, some things that have high monetary (loans) or fuel cost (specialty foods, electronics, minerals) should be exchanged with more structure and rules to reflect their relative scarcity. For example, well-designed business to business mutual credit systems should be operated with strict, transparent lending schemes and fossil fuel tax and energy credit schemes should be governed by local governments and/or reputable nonprofits.

When the stakes are high (actually scarcity and life-dependent goods and services), the system needs to be tightly designed so that it really works in facilitating more exchanges, it doesn't succumb to corruption and other integrity problems, and so the community feels secure in its agreements and confident in the system. There can be appeal processes based on context and relationships, but well developed rules and governance should be in place as a foundation. On the other hand, where there is more abundance and the stakes are lower, less rules will make exchanges and relationships, community and resilience flourish more easily.

Context is key. And nested layers of different kinds of exchanges governed by different rules and entities may be in order for many medium to large-sized communities.

Friday, April 16, 2010

Following the Money: How the 50 States Rate in Providing Online Access to Government Spending Data

Executive Summary

The ability to see how government uses the public purse is fundamental to democracy. Spending transparency checks corruption, bolsters public confidence in government, and promotes fiscal responsibility.

In the private sector, Internet search technology has revolutionized the accessibility and transparency of information. We take for granted the ability to track deliveries online, to check cell phone minutes and compare real estate on the Web, and even to summon – at the click of a mouse – satellite and street-level views of any address. But until recently, when it came to tracking government expenditures online, we were left in the dark.

State governments across the country are changing that. At least 32 states currently mandate that residents be able to access an online database of government expenditures with “checkbook-level” detail. Most of these Web sites are also searchable, making it easier for residents to obtain information about government spending.

This report evaluates states’ progress toward “Transparency 2.0” – a new standard of comprehensive, one-stop, one-click budget accountability and accessibility. At least 7 states have become leaders in the drive toward Transparency 2.0, launching easy-to-use, searchable Web sites with a wide range of spending transparency information. Twenty-five additional states have made initial steps toward online spending transparency by launching Web sites with checkbook-level detail on state spending that nonetheless have much room for improvement.

These Transparency 2.0 states are beginning to reap the benefits of transparency in greater government accountability and cost savings. The remaining states should join the ranks of Transparency 2.0 states by providing their budget information online in an accessible manner. All states should look to expand and improve their transparency Web sites to provide more and better information to citizens.

The movement toward Transparency 2.0 is broad, bipartisan, and popular.

• A nationwide wave – Legislation and executive orders in 32 states have given residents access to online databases of detailed government expenditures, and the federal government has launched similar initiatives. The vast majority of these states have acted over just the last three years.

• Bipartisan efforts – Transparency legislation has been championed by legislators both Republican and Democratic. In 2008, federal legislation to strengthen Web-based spending transparency was co-sponsored in the Senate by presidential rivals John McCain (R-AZ) and Barack Obama (D-IL).

• Public support – Republicans, independents and Democrats all support enhanced government transparency by wide margins. When asked about the role of transparency in the economic recovery package of early 2009, three-quarters of voters responding said that “creating a national Web site where citizens can see what companies and government agencies are getting the funds, for what purposes, and the number and quality of jobs being created or saved” would have an important impact on the package, with 39 percent believing its impact would be extremely important.

Transparency 2.0 saves money and bolsters citizen confidence.

• Increased civic engagement – Americans are eager to use transparency Web sites. Houston officials report improved public confidence after the launch of their transparency Web site. The Missouri Accountability Portal received more than 13 million hits in the 18 months after its launch.

• Low cost – Spending transparency Web sites can be inexpensive to create and maintain. The federal transparency Web site, which allows Americans to search through more than $2 trillion in yearly federal spending, cost less than $1 million to create. Missouri’s Web site, which allows visitors to search through more than $20 billion in annual state spending and is updated daily, was created with already-existing staff and appropriations.

• Big savings – Transparency Web sites can save millions through more efficient government operations, fewer manual information requests, more competitive contracting bids, and lower risk of fraud. In the two years following the launch of its transparency Web site, the Texas Comptroller reported $4.8 million in savings from more efficient government administration. Utah estimates millions in savings from reduced information requests. The largest savings may come from prevention of waste or abuse of public funds due to enhanced public scrutiny – savings that are impossible to quantify but likely significant.

• Better-targeted expenditures – Transparency budget portals allow states to track how well subsidies and tax incentives deliver results. Funds from underperforming projects and programs can be reinvested in more successful programs. By tracking the performance of state subsidies, Minnesota and Illinois have both been able to recapture money from numerous projects that failed to deliver promised results.

• Better coordination of government contracts – The Massachusetts’ State Purchasing Agent identifies four sources of savings for state procurement officers: sharing information with other public purchasers on good deals; avoiding wasteful duplication of bidding and contracting procedures through centralized processes; better enforcement of favorable pricing and contract terms; and focusing cost-cutting in areas where greater resources are spent.

In 32 states, transparency Web sites provide detailed data on government spending.

• 32 states allow residents to access checkbook-level information about government expenditures online. Checkbook-level transparency allows viewing of individual government transactions. The majority of these states (29) also enable residents to search expenditures by vendor name or type of service purchased.

o Seven of these states are “leading states” in the transparency movement, hosting searchable Web sites that provide comprehensive information on a range of government expenditures, such as tax subsidies and economic development grants. These states are Kentucky, Ohio, Texas, Illinois, Minnesota, Missouri and Pennsylvania.

o Twenty-five states are “emerging states” with transparency Web sites that provide less comprehensive information and, in some cases, are not searchable by vendor or service.

• Eighteen other states are “lagging states,” whose online transparency efforts fail to meet the standards of Transparency 2.0.

o Four of these states have taken the positive step of creating spending transparency Web sites, but those sites either lack detail or access to comprehensive information on government spending.

o The remaining 14 states do not host government spending transparency Web sites.

Even in leading states, there are many opportunities to improve transparency Web sites.

• Most transparency Web sites do not provide enough detailed information on government contracts. Even some of the leading Web sites provide only a short description (two to three words) of the purpose of the contracts.

• Only 17 states include spending data prior to Fiscal Year 2009.

• Only eight states include data on tax expenditures, and only six describe the purpose or outcome of those expenditures.

• Only eight states provide information about local or county spending.

States should fill in budget reporting gaps and improve online transparency.

• Transparency Web sites should be a one-stop source for budget information. State governments should provide all financial information on one Web site, allowing citizens to easily view local spending, investments, or vendor payments.

• Transparency Web sites should provide comprehensive information. Transparency Web sites should be user-friendly portals that allow citizens to view detailed information on government contracts, tax expenditures, other subsidies and spending. For example, states should allow citizens to view the text of contracts, or at least detailed summaries that allow residents to understand the purpose, basic terms and outcome of the contracts.

• Transparency Web sites should be one-click searchable. Residents should be able to search data with a single query or browse common-sense categories. Web sites should also let residents sort data on government spending by recipient, amount, legislative district, granting agency, purpose, or keyword.

Can You Live A Year On Virtual Currency? Dibspace’s Founder Will Find Out

Reposted from TechCrunch
by Evelyn Rusli on Apr 16, 2010

Can you live on virtual currency? The founder of Dibspace, Dominic Canterbury, says yes. Canterbury is trying to prove that he can live his life (from rent, to food, to the clothes on his back) with just virtual currency for an entire year. This is of course a huge publicity ploy for his online marketplace but it got my attention.

“It’s a way for me to push the site to a new level and to dramatize how this economy all fits together,” says Canterbury. calls itself an “” for local services that trades in (yes, you guessed it) “Dibits.” One Dibit is worth one dollar but you can never cash out for real dollars. Businesses, like a local inn or a yoga studio, who have excess availability/products can post their wares/services on Dibspace. Interested consumers call “Dibs,” and then the vendor selects a consumer and invoices when the service/product has been rendered. There are multiple advantages from the small business perspective: vendors can use their credit for services from other businesses (like catering, web design) and it’s another way to bring in new clients.

“With cash and clients in short supply, many are finding this new barter currency just might save them and their businesses from becoming another casualty of the economy,” says Canterbury.

Meanwhile, private consumers can also post goods and services and receive Dibits for those transactions. You get 10 Dibits when you open an account, 10 Dibits for referring friends (30 if you refer a business), and 10 Dibits for posting an offer (up to 5), there is also an option to buy credits at different points throughout the year. The site is still relatively small, with just 4,000 users, but there should be enough on Dibspace for Canterbury’s venture. There are 1,500 offers on the site and roughly half-a-million dollars in goods and services have been traded (currently, the site is focused in the Puget Sound/Seattle area).

Canterbury will embark on his virtual currency journey in 42 days. In the meantime, he’s preparing for the campaign by recruiting new businesses that will make it all possible. For example, he says he’s very close to getting developers on board that will let users pay for rent with Dibits.

Read more:

Thursday, April 15, 2010

BNotes - A Proposal for a Community Currency for Baltimore

Jill Harrison
Friday, March 19, 2010 at 10:47am

I believe that establishing complementary community currencies is the single most important action in addressing poverty in our neighborhoods. For example a currency for Baltimore, which I’ll call BNotes, could be structured to maximize trade, monetize underutilized resources, encourage entrepreneurial development for items currently imported to our region, reduce unemployment, and supply support for local nonprofits and community service organizations chosen by the people using the currency.

My sense that our economy acts as more of a barrier to social growth than an effective tool for equitable exchange of services has been growing since my children were coming out of high school and getting their first jobs. I took in friends of theirs who needed to work through the summer to save money for the next college year and could not afford to stay in the dorms. The first young woman (studying abroad from Japan) was paying 24% on her debt while working and going to school. At that time I learned that my father’s income from the year I was born, in 1952, was less than $4,000 while I was the fourth of five kids and he had a mortgage on a house. The realities of inflation really hit home, and I realized that the minimum wage had not changed since my high school days nearly as much as the cost of living had. With this economic collapse, I find Dennis Kucinich’s statement that “we are at a teachable moment on matters of money and finance” to be prescient. I feel strongly that the single most important institution to address in making Baltimore a stronger community is the monetary system. A sound foundation for a monetary system has less to do with the basis of value for a currency than it does in the trust and cooperative efforts of the people using it.

Bernard Lietaer was a central bank executive in Belgium who believes the structure of monetary systems has a direct influence on the culture of a society. Our expansionary national monetary system and the overwhelming volume of trade being speculative rather than for the exchange of real goods and services leave us with an ever slowing velocity in our currency. To counter this trend our central banking system increases the volume of the currency to increase the flow of real trade. The inflationary result of this pattern harms the poorest segments of society most while wealth tends to accumulate in fewer hands, primarily in those whose investment instruments are growing the fastest. The velocity of money can be increased in a more sustainable way by putting a complementary community currency in place that has a 'holding fee', which will encourage the bearer to spend the currency before it depreciates. Classical economics teaches that money has 3 primary functions: 1) standard of value, 2) medium of exchange, and 3) store of value. The goals of function 2 and 3 have the contradictory effects of encouraging spending vs. saving. In the case of our national currency too much value is placed on the dollar’s function as a ‘store of value’ without sufficient emphasis on encouraging exchange. This has caused the value of the dollar to be considered as greater than the real world commodities it’s meant to be based on. Our society has moved from production of real goods and services to producing financial instruments that have been shown to be based on phantom wealth. This leads to damage of the real world assets in favor of the perceived benefit of hoarding dollars. An example of this false valuation was shown in a comment from Malaysia’s minister of forestry when he observed that Malaysia would be better off once all it’s trees were cut down since the interest on the money grows faster than the trees (p18 David C. Korten, Agenda for a New Economy). A complementary currency can work to encourage new, more sustainable behaviors to balance the effects of the dollar. Currencies that encourage trade over savings have been shown to decrease unemployment, while locally used currencies encourage self sufficient communities over dependence on outside resources. Baltimore could easily and nearly immediately be producing more of its food and energy supply from local businesses.

An important part of the structure of the BNote is the partnership it has with nonprofits or local service providers. The BNote places special emphasis on supporting nonprofits, and more importantly in educating and encouraging those service providers to create ways to include their demographic populations in the BNote exchange network, while helping to establish closed circuits of trade within the communities they serve. This means that in addition to the larger Baltimore community the BNote will support the nonprofits that register in the trading network, as well as the populations served by those organizations. By providing interest free micro-lending and increasing the volume of exchange media, an amplified economic benefit can be channeled to communities with the greatest need.

A brief description of this BNote currency and a scenario for how a circulation system might be established in concert with existing community services is described below. Eventually it would be preferable to make BNotes available to the public at local banking institutions, like the Johns Hopkins Credit Union for example. In addition to recruiting businesses to use BNotes, it will be important to have nonprofits or community service providers establish complete circulation systems that include their target population. The BNote will be more valuable for businesses that do not have to convert them back to dollars, and so establishing complete circuits of trade within the community will be important.

BNotes (modeled on the Chiemgauer in Germany: will be a currency printed in denominations of 1, 5, 10 & 20 dollars. To encourage trade they will have a ‘holding fee’ of 2% per quarter (a negative interest rate, or demurrage fee). The BNote can be purchased either at local banking institutions or from selected business partners. The BNote will be valued at $1USD, and can be purchased for $.95, with the remaining $.05 (on conversion from BNote to USD) going toward administrative fees and for the benefit of a local nonprofit or community service of the customer’s choice. If businesses accumulate too much BNote, they can exchange them for $.95 USD. The 5% fees to the non-profits are like a small tax on imported goods. In the long run prices of regional goods decrease and prices of global goods rise, encouraging local businesses to get their stock from local suppliers. Consumers get a 5% discount on their purchases, and businesses get a loyal customer base with less advertising. With city participation, small businesses may be able to pay a portion of their city bills in BNotes, like water bills, licensing fees, or taxes. The city could then use that fund to pay for summer jobs for young people, or perhaps eventually fund larger projects like a community land trust that would create affordable housing stock.

Non-profits or community organizations that would like to register as recipients of BNote donations will be encouraged to establish a closed circuit of trade in their area. The procedure of establishing such a circuit will involve selling a product or service to the community in exchange for BNotes, as well as looking for underutilized resources available in the community that can be donated by businesses for sale to BNote purchasers. (Note: if methods of administering the demurrage charges are found to be too cumbersome, a similar effect can also be produced by the use of the growth of the interest bearing national currency held in reserve for backing of the BNotes)

An example of establishing a complete circulation system for BNotes, might involve a partnership with a large faith based nonprofit organization which supplies housing and jobs placement for formerly homeless people, which we’ll call GEDCO. The following example was inspired by the experience of the Philadelphia Equal Dollar ( GEDCO could take a 2 year interest free loan of $15,000 in BNote currency and use it to pay $10,000 to certain community members in recognition of some extraordinary contribution they’ve provided, and $5,000 in interest free micro-loans to a number of people in their client demographic. In order to repay this loan GEDCO would have to accept BNote as payment for some service or product. They may collect part of their rental fees from their housing facilities in BNote, or offer certain products for sale requiring some percentage of payment in BNotes. To assist their tenants in earning the BNotes for their rent, they could allow the clients purchasing GEDCO’s services from their jobs programs to make partial payment to the employees in BNotes. While at the other end of the chain, to provide value for the people they’ve rewarded with the $10,000 BNote gift, GEDCO will seek out businesses that will accept the BNote for their products, like local bookstores or restaurants. Underutilized resources might include local coffee shops and restaurants that have products that are aging out of their commercial value which they could offer at a discount to BNote customers. Searching for underutilized resources and making them available at discount to BNote customers will be an important part of strengthening the value of the BNote network. It is important that closed loops of trade are created for the demographic populations served by the nonprofit organizations to help maximize availability of a medium of exchange in these fragile communities.

There are solutions waiting to be born from the collaborative efforts of our community which no single institution could create alone.

Saturday, April 10, 2010

Fears and Hopes for the Gift Economy

In doing currency work, I catch a lot of slack from both sides. Some say I am being too idealistic - local currencies designed to support our highest values won’t work or people aren’t ready for them any time in the next 20 years. And gift economies – well forget about it! We’ll never get there! People are inherently competitive, greedy and selfish. On the other side, I am not being idealistic enough – we need gift economies now, not more ways of keeping score (currencies)! And gifts economies are the only things that will get us towards our true goal of spiritual reunion, abundance, care and love for all. I’ve also lived and worked in the gift economy to a large extent for the last five years, helping to coordinate the Really Really Free Market – a demonstration event of a pure gift economy and meeting a lot of my basic needs through friends’ gifts.

To some extent, there is a realist in me that questions whether we actually have enough abundance to share gifts with close to 7 billion people on the planet. Some researchers claim there is plenty of food and water, but it is just maldistributed through corruption of power and unequal wealth. Whatever the case may be, people in some parts of the world really don’t have enough. We haven’t actually solved the abundance problem yet, which seems a necessary condition for a healthy gift economy. There needs to be more real democracy, more local resource control, less people, better distribution and more efficient use of resources.

I also know from having worked in the nonprofit world for many years that gifts come with strings attached, powerful ones, just as they did in some these traditional gifting cultures. The ability to give is power - one must first have the resources and where did they come from? Additionally, if one can give, one can take away or refrain from giving again. Philanthropists often choose charities that serve their own interests and rarely ones that work against the source of their unequal, unearned wealth. If nonprofits do work that is too economically radical, they don’t get funded.

It’s easy to ask people to rely on each others' generosity when you’ve never gone hungry or had to think twice about taking your kid to see an expensive doctor when they are very ill. If your life depends on a reliable structure within which there are thin margins, you might not be so ready to give it up and put trust in trust of people that have been framed as your competitors or gatekeepers for survival. Again, the ability to participate in the gift economy is a luxury many people feel they can’t afford much of.

Then there is the incremental transformation argument. We need baby steps between where we are and the gift economy so that people start to trust each other again, and relationships, cultural patterns, rituals, and institutions form to support this framework. Most of this no longer exists in the US dominant culture – quite the opposite. Our culture has been designed against gift economies. Needless to say, if you jump ship and just believe there is a life boat doesn’t mean there is one (we need to build it too!). Of course, if you are rich, you might have a life vest tucked in back pocket to cheat just in case.

On the other hand, if we can’t ever imagine getting to a place where everyone takes care of each other without fear, we will never get there. Aim low and you will hit it every time. We need to be very conscious of our compromises with “realism” and be honest about them, including discussing what we do want our culture to look like. Every compromise may get you one step forward in material reality but may have the unintended consequence of one step back in confidence and consciousness towards our highest goals.

I believe we should give as much as we can, especially if we have more than enough and we should trust the universe to take of us and our brothers and sisters to reciprocate. But maybe there are agreements that should be in place that reinforce this, collective agreements that ensure survival and enable people to start to trust each other, especially in the cultural transition (if people die or get jaded in the process, it might not help to transform much). Even traditional gifting cultures had agreements, especially for basic sustenance, they didn’t always just randomly give all their stuff away. Just because there is an agreement, doesn’t mean it’s not a gift if it is a voluntary, participatory agreement to give each other gifts. Today these agreements might look a bit like participatory socialism. At the Really Really Free Market there is a sacred space where people can practice giving and receiving. There is an agreement that inside the space everything is free and everything outside the space must be negotiated before taking – that’s the agreement. We can use agreements like this that assume an appropriate level of trust given the particular situation. In low levels of trust situations, like resource redistribution, there probably needs to be much stronger agreements for it to work and people to feel secure in knowing they will get back their stolen resources. The redistributed resources in a sense are enforced gifts – maybe an oxymoron. But as we relax, feel secure, and sense abundance, we can try out using fewer and softer agreements.

When we are able, we also need to provide as many opportunities (events, rituals, structures and institutions) for people to practice safe gifting and even risky gifting as possible. The experience of giving and receiving gifts transforms people through the process probably much more than just trying to convince the economically traumatized masses. The knee jerk reaction is that it can’t work, but when you experience good gifting and it works, it kind of creeps up on you and changes even the cynic. You can’t deny real proof that a gift economy is possible. It may possibly even calm the mortal fears of the greedy rich and make them turn over a new leaf.

So in summary, yes, I believe some amalgam of gift economies and mutual caring agreements is possible, but the possible might take a little while. Give it time, give it love and patience, the seeds will grow. But you also have to give the seeds plenty of water, food, prayer, and sunlight. Create a free box, join a timebank, start a free farm stand, offer a free room to a homeless person or a wealthy billionaire – if we all do some gifting, it might just change the world.

Much love,