Monday, August 29, 2011

Food Justice – Changing ‘there’ by changing here

IN stirtoaction STIR
15 August 2011 at 5:30 pm
by Matthew Steele

I remember as an undergrad reading Ivan Illich’s 1968 speech to American students working in Mexico and having the once-clear vision of my life’s path confused. Illich’s rather simple, passionate, and poignant criticism has stayed in the back of my consciousness ever since. He dismissed the aid efforts the students were embarking on and went further to explain that their efforts would likely have a destructive impact in their host Latin American countries.

He found the students to be ambassadors for the American way of life, positing values that would ultimately serve more to destroy their host countries instead of aid them. He further remarked that working in an American ghetto as an alternative for these students could be equally destructive, but at least there community members would have the ability to vocalize or organize a rejection of student’s efforts. I think such critiques are increasingly relevant to the world of food, especially in the potential advent of “Food Corps”, a food-focused AmeriCorps program.

In the world of food activism, and arguably in every context, a person must identify the systems of power in place in the worlds they traverse to appropriately justify what role they take in changing them. Many of my well-intended contemporaries in the food movement fail to focus their efforts where they have the most power to apply a constructive and systemic critique. It is all too common for food activists to live in a community distinctly different from the one they are serving; their work and personal lives held separate “to maintain their sanity.” Though complete assimilation will likely never be possible, nor perhaps ideal, many of these community activists fail to even marginally immerse themselves in the community they are advocating for or organizing among. While focused on serving “other” communities, many food organizers and advocates in turn ignore the food system of the privileged community in which they choose to inhabit, thus obscuring the linkages between the choices made in the spaces of privilege and the spaces that lack privilege. Undergraduate student activists working on community projects are especially prone to exist in this outsider dynamic, as they frequently have superficial, short, and often uninformed interactions, and they live, if not physically then at least mentally, in disconnected bastions of privilege at their university.

These problems surface most explicitly in the efforts of current food justice advocates abroad who are focused on holding back unsustainable industrialization from reaching the agricultural sectors of Latin American and African countries. The American food system is the model being followed and these advocates’ efforts abroad are opportunities lost to change the unsustainable and unethical system perpetuated in the U.S. The well-intentioned activists utilize their influence as Americans, but in so doing they inadvertently reinforce the problems they are hoping to solve. They are in part legitimizing the means by which American power was attained, specifically rapid industrialization and economic imperialism.

Many food justice advocates are brought into their work by an emotional reaction to the tragic hunger that exists in the world, be it in the context of the U.S.’s inner cities or global poverty. Indeed, hunger and emergency food efforts have been the recipients of the bulk of funding in the growing food movement over the last 40 years, a time period that simultaneously saw an expansion of hunger and food-related problems. Focusing on the one issue of food access has only enabled the persistence of the true underlying causes of our unjust food system. Food access, though important, cannot be the focus of efforts. It is more important to restructure the food system in a way that empowers a community to have control in their food system thereby ensuring their continued access.

The radical conceptions of food sovereignty movements and movements such as Via Campesina (an international peasant movement for food sovereignty) were born out of this realization. To advocate for food sovereignty is to advocate for a redistribution of power within the food system so that communities have the ability and control to feed themselves with healthy and quality food.

Despite the increasing popularity of the term “food sovereignty”, funds are still doled out to organizations whose efforts only stand to superficially address food access issues. Often the funders are businesses like Walmart, which have been the major culprits in restructuring the food system and increasing income and health disparities. Philanthropic funds given to emergency food service providers satisfy a paternalistic need to help poor and starving people through direct forms of assistance. These funds are directed to those whose faces and places have become synonymous with need. However, the underlying causes of the need are ignored. Though humanitarian concerns should be addressed in tandem, the focus of available resources should be on building food security and addressing systemic issues at work causing mass hunger.

CoFed: A Systemic Approach

The idea of CoFed was built out of the growing relationships between student food cooperative (co-op) start-ups and is especially linked to the success of the Berkeley Student Food Collective in the winter of 2009-2010. The idea was to create an incubating structure to support students interested in creating food co-ops in their campus food system as well as to address some of the endemic problems, such as high turnover, institutional capacity, and memory, many of these cooperative projects have historically faced.

Student food co-ops integrate into the landscape of the university and operate as beacons for education and hubs for sustainability and activism among students. Student food co-ops as thriving money-making businesses can be a source of direct power for students aiming to transform their campus food systems. Co-ops can have control over the sourcing, the price of food for students, and revenue reinvestment. In addition, co-ops create opportunities for people to gain access to quality food through volunteering and wages. These co-ops educate and expose generations of students to food system critiques and give students a solid way to build food sovereignty. They also provide a means to create a peer-facilitated cultural shift in student communities. Through involvement in food co-ops, student organizers internalize food justice and food sustainability in their daily lives and often continue to build food sovereignty in the communities they join following graduation.

The creation and success of student-run food cooperatives, and the often-accompanying campus farms, serve to legitimize community efforts of a similar nature. The systemic efforts on behalf of student food co-op organizers have the potential to transform their campuses into more ideal models for development within a conducive intellectual environment where arguments around food sovereignty can especially gain traction. We hope that a national co-op organizing effort—in tandem with efforts to start campus gardens and farmers’ markets—can build momentum for food sovereignty on campuses throughout the country. In the process, we seek to increase the influence of food sovereignty as a development model in broader community development patterns both at the local, city, national, and international scale.

Experiential Learning

Ivan Illich was a staunch advocate of experiential learning. Indeed, one of his most important intellectual contributions was a book arguing for more self-directed, project-based learning, Deschooling Society. It is because of my support for such kinds of learning that I find it important to determine where such work is appropriate. While recognizing how much students actually gain from experiential learning, it is important to note that such learning is not gained at the expense of the communities being “helped”. As the students at the conference Illich was speaking at noted, students often have much more to learn from their host communities than the reverse.

Students in conventional universities only have a short period of time to get “credit” for project-based learning in a community. Given the time constraints of their semester/quarter system and institutional support for a year, or at most, four years, the community food projects in which students tend to partake struggle to be genuinely community-based and sustainable, precursors which are needed for any effort toward food sovereignty. Students also often lack the knowledge and the sensitivity to ensure their work is significant, and gaining such knowledge and sensitivity should not come at the expense of the community they are hoping to serve.

Regardless of their background, students and academics often come from a place of privilege and power inherited through their explicit association with an academic institution and the intellectual legitimacy it represents. The systems in place that maintain a university’s legitimacy provide students the privilege to bring service to a community and be accepted by the same. Indirectly, the systems that enable one’s power are condoned in the use of that power. A student is an ambassador for all of the values substantiated in the process that enabled the imparting of the privilege they wield. In the context of food systems work, the privilege a student wields is in part made possible by the exploitation of farm workers and by the unsustainable usage of fossil fuels in an industrialized and global agricultural system far removed from their daily life. It is important for all students to be cognizant that they are enabled to focus on their school projects because of a pattern of development that thrives on existing disparities in the world.

The conclusions drawn from the Illich’s paternalist critique should not be that one should throw up one’s hands and embrace blind apathy. Rather, it means one should take radical and sometimes more difficult steps to systemically change the worlds they do inhabit. For students focused on food, the most elemental of our systems, the focus should be their own campus food systems.

Sweeping policy changes such as those made to campus food dining halls or restaurants and the food service provider, often widely touted and spearheaded by administration, are rarely systemic, not sustained over time, and largely superficial even if directly and quantitatively significant in the short run. Such policy changes to campus food systems may have the overall impact and image of greening a campus, but such efforts need not involve students, and indeed could occur and be reversed without the broader student body ever noticing. The policies changed are often preliminary and enable the university or a sub-contracted food service provider to put on a green face while ultimately making few changes significant in the long-term.

The example of this I always provide is: the University of Washington (UW) in Seattle touts the sustainability of its food service. The crux of their claim to being “green” lies in the university’s switch from disposable to compostable eating utensils and plates in all of their restaurants and dining halls. They were especially proud of their ability to pressure Coca-Cola to make a compostable cup for the first time. While it is difficult enough to fathom Coca-Cola as sustainable in any form due to its egregious human rights violations in Colombia, its abysmal environmental track record in India, or its contribution to the obesity epidemic in this country, the compostable plates and utensils they put into use are actually less sustainable than their reusable counterparts that were once employed 25 years or so prior. This is because less resources are consumed through washing and the production of such serviceware. In making its change to compostable utensils and plates, the UW housing and food service perpetuates a fast food model.

Student food co-ops, in sharp contrast to these university-wide policies, provide a democratic cornerstone on which to build food sovereignty and channel power into students’ hands. In a co-op, students wield the power to make decisions about the quality, sustainability, and cost of their food. The potential power these food co-ops wield pose a threat to existing power structures and each successful co-op generally must engage in a battle with the existing monopolistic food service provider, be that an in-house operation or a sub-contracted corporate food service provider like Aramark and Sodex. Food co-op efforts on campuses, after being established, go on to spearhead the implementation of important systemic changes in the broader food system and increased democracy.

From my experience, though sweeping political changes can happen, ideally, in tandem with the creation of food co-ops, if it occurs before hand, it can paradoxically become difficult to build support for a food co-op. Superficial green policy changes become status quo and legitimatize a claim to being “sustainable,” which masks the lack of any systemic changes or plans for further changes. Once a system or institution has been legitimatized by such green policy lip service, food sovereignty by paths such as food co-ops is no longer a strong consideration. In contrast, the initiation of a food co-op on campus stirs policy changes by placing students into a prominent and empowered place in the food system that allows students to further push the status quo consistently into the future.

Food Justice Work

Food Justice work cannot narrowly be conceived of as helping poor people obtain access to food. We need to consider the broader systemic effects of each choice made in our lives and how we contribute to the systems of oppression that exacerbate health disparities and food access issues in our own communities. In the context of economic oppression, the food choices of those living in poverty are reflections of the norms substantiated in popular culture. To use the analogy of Paulo Freire, the oppressed internalize a love for their oppressor. The norms established by privileged individuals disproportionately influence norms that go on to influence popular culture on the aggregate. In other words, the choices of the poor are structurally framed through the influence and power wielded by the rich.

Regardless of where in the food system one focuses one’s efforts, there are injustices present throughout the system. The most blatant exploitation in the food system—that of the farm workers—can be addressed if the power and responsibility of sourcing is put into the hands of consumers. Consumers can then make decisions in collective dialogue with others, which creates the space for considerations of ethics and social values. This is precisely the goal of the student food co-ops I work with.

The influence of retail is powerful, and as such it is an important medium through which sovereignty can be built. As Raj Patal puts it in Stuffed and Starved (2007):

“The highest temple of the modern food system is the supermarket. The supermarket chain is an empire of logistics, one that governs and regulates the smaller fiefdoms within the food industry, such as the commission agent’s rule over the grower, or the distributor’s clutch on the agent. Through its decisions, and through its close supervision of each step in a product chain, supermarket-buying desks can fire the poorest farm workers in South Africa, flip the fates of coffee growers in Guatemala or tweak the output of paddy terraces in Thailand.”

Walmart, while clearly a powerful player in the food system, gained its power through unethical, unsustainable, and highly profitable, exploitive business practices. The use of its power in addressing food insecurity is enabling of Walmart’s business model both directly, by shielding the company from criticism, and indirectly by legitimizing that power among those being aided. Up until 2000, and more starkly in 2007, the Waltons were notorious for their lack of charity and the small size of the gifts they did give out. The company is making these superficial changes largely in response to the growing criticism in response to their mammoth presence in the food system, growing beyond 40% of all national food sales.

Retail power can be taken from corporate moguls and, through co-ops, be put into the hands of community members. This can happen in a wealthy neighborhood far easier than it can happen in a low-income neighborhood, and happening in the former will help make it possible in the latter. Efforts in one community can help build solidarity for community based efforts toward food sovereignty in others. Community food co-ops in low-income neighborhoods notoriously fail for a myriad of reasons including but not limited to issues surrounding poverty, such as a lack of human capital, a lack of community buy-in, and a lack of access to capital and credit. A report by UW (Madison) Center for Cooperatives provides some examples of failed cooperatives in low-income communities but identifies that community food co-ops that exist on the periphery between low-income and upper-income communities have been able to be very successful.

I understand the potential of a university to be an “anchor institution” for a local low-income community. An anchor institution, as discussed in the development field, utilizes its institutional power to catalyze surrounding development. Indeed, the local university, the University of Pennsylvania, enables me to work among a low-income community in North Philadelphia. But even in my position as a food ethnographer, I find myself not entirely immersed in the local community. A complete immersion requires sacrifices only some of the most privileged people could enjoy. To radically change the fate of an oppressed community, one needs to share its fate. For young, educated, but poor community organizers, time spent developing relations and immersing themselves in a world of chronically unemployed individuals is time that could otherwise be spent among those who could connect them with opportunities. Such a situation creates contentious incentives especially for those who are doing community food organizing as an employment strategy while unemployed, as is largely the case in Philadelphia.

I see few genuine, complete immersions by young food justice advocates in the area that I live. Indeed, the food justice world mainly consists of hyper-educated food activists who primarily associate with each other. At some level, I think people can immerse themselves sufficiently among a community to build truly community-based projects. However, such organizers need to accept that they will always be balancing a tension between what privileges they can sacrifice against the degree of their community immersion. For some, immersion is not even possible as the sacrifices are too difficult or impossible for them to make.

Many of the urban farmers I work with cannot or are unwilling to adapt their appearances to fit the community being served, because so much of their identity, and by extension motivation, is wrapped up in their radical appearances. They expect and hope to be “accepted,” and at some level this happens. Though the culture and values they are perpetuating may be admirable, they walk as aliens among the people they are working with, unable to connect with important figures who hold cultural influence over the neighborhood. As a result, they are unable to build bridges to create genuinely community-based food projects. In my neighborhood, the cultural icons are not the existing community organizers, but rather the hustlers of the neighborhood, the dealers, the players, the graffiti artists, and the rap artists. Those in the age group between 16 and 24 are often the most important cultural figures in the neighborhood and yet the most absent in community food projects.

Building a highly successful community-based grocer is possible, as demonstrated by People’s Grocery in West Oakland. Much of its ability to integrate into the surrounding community was due to the efforts of Nikki Henderson. Though an outsider, Henderson lived in, immersed herself in, and built community among the communities of color in West Oakland. Her partner is an equally engaged and respected community organizer involved withOakland’s hip hop scene. The project also benefited from its proximity to San Francisco, a city of privilege spearheading food sovereignty.

In neighborhoods like Philadelphia, the food co-ops that exist have been invisible. Of the two co-ops, Mariposa has been for members only, though is about to open to the public. Weaver’s Way was closed to the public as well up until a few years ago. While the latter is now open, it is tucked away on the outskirts of the city near the suburbs. For now, those living in low-income communities consider the notion of convenient, affordable, healthy and quality food access only in association with the suburban development model and by way of a corporation like Walmart. Ironically the migration process of “getting out” to the suburbs to enjoy these benefits will only continue to disintegrate the local community, making it ever more unlikely that things will change for the better.

I hope the reader takes from this article a clearer idea of where to focus their passions. One wields the most power in a descending concentric sphere of influence in relation to one’s identities and respective communities. Though I focused on students in this article, the arguments can be extrapolated. One must analyze where best to focus their efforts, taking into account what role they could occupy in the potential communities they aspire to serve. Efforts placed in one potential sphere of the food system are absent in other. Ultimately, efforts to reform the part of the food system in which we are active participants will have more impact in changing broader systems and indirectly address the disparities that spur a lack of access. Though hunger and other problems associated with food access are important issues to address, these issues are rooted in the disparities and poverty spawned from systemic and historical injustices that have as much to do with privileged contexts as they do spaces plagued with hunger.

For students, student food cooperatives can build food sovereignty into the food system of the institutions that provide them their privilege. Having food co-ops on universities throughout the country will indirectly influence development patterns by normalizing and legitimizing food sovereignty and food co-ops. Working in your own communities starting food sovereignty projects is just as important if not more important than working in “other” communities.

Matthew Steele works part-time as the Mid-Atlantic Regional Director for the Cooperative Food Empowerment Directive, incubating food cooperative start-ups at universities and consulting with existing cooperatives. He also works part-time as a food ethnographer through the University of Pennsylvania, studying and documenting the local food movement, specifically market creation in areas of low access. Matt facilitated the creation of the University of Washington Student Food Cooperative (UWSFC) before moving to Philadelphia to focus on community development in North Philadelphia in conjunction with the work of his partner, Fernando Montero, an anthropologist at the University of Pennsylvania.

Slow Money 3rd National Gathering Oct 12-14

Slow Money 3rd National Gathering Oct 12-14, San Francisco
Register now!

The program of Slow Money National Gatherings integrates internationally recognized thought leadership, next generation social entrepreneurship, and an environment that fosters shared learning across the full spectrum of backgrounds—from the most sophisticated financiers to individual investors, from farmers to food entrepreneurs.

Given the centrality of food to our mission, all meals feature the best offerings of local organic purveyors. Meals are generously scheduled to offer as much time as possible for food to be enjoyed and for a bit of the conviviality of the table to be experienced.

The program also includes elements of film, music, and Meet the Author sessions, because fixing the economy from the ground up is not only a financial activity, but also a cultural one.

Wednesday, October 12, 2011
9:00 am OPENING REMARKS Woody Tasch
9:30 am KEYNOTE David Suzuki
11:00 am KEYNOTE Vandana Shiva
12:00 pm LUNCH
1:30 pm BREAKOUT SESSIONS Featuring case studies, education, best practices, and more (see below)
3:15 pm KEYNOTE Wes Jackson
4:00 pm TOWN HALL MEETING Roundtable discussion with Wes Jackson, Vandana Shiva, Premal Shah, and others. Moderator: Simran Sethi
Simran Sethi Wes Jackson Vandana Shiva Premal Shah
5:30 pm OPENING RECEPTION Food, music, and networking
7:00 pm FILM
Thursday, October 13, 2011
9:00 am WELCOME MESSAGE Cathy Berry
9:05 am SPECIAL ADDRESS Leslie Christian
9:25 am SPECIAL ADDRESS Melissa Bradley
9:45 am ENTREPRENEUR SHOWCASE Two dozen food entrepreneurs from across the United States, selected by members of the Slow Money network, for the quality of their vision and their business acumen, present investment opportunities.
12:00 pm LUNCH
3:15 pm BREAKOUT SESSIONS Featuring case studies, education, best practices and more (see below)
5:00 pm TOWN HALL MEETING Bonnie Rukin Tim Crosby Grant Abert
6:00 pm SPECIAL ADDRESS David Montgomery
7:00 pm FARM-TO-TABLE DINNER A sit-down celebration of all that we have come together to support, catered by the award winning Back to Earth Organic Catering
Friday, October 14, 2011
9:00 am OPENING REMARKS Woody Tasch
9:05 am SPECIAL ADDRESS Chris Martenson
9:25 am SPECIAL ADDRESS Kat Taylor
10:15 am SLOW MONEY ANNUAL MEETING Slow Money Annual Meeting: report from the Chairman, regional reports, membership campaign, and other governance matters
10:15 am BREAKOUT SESSIONS Featuring case studies, education, best practices and more (see below)
11:45 am BREAKOUT SESSIONS Featuring case studies, education, best practices and more (see below)
11:45 am SLOW MONEY ANNUAL MEETING (continued)
1:00 pm LUNCH
1:45 pm BREAKOUT SESSIONS Featuring case studies, education, best practices and more (see below)
3:00 pm SPECIAL ADDRESS Winona LaDuke
3:20 pm SPECIAL ADDRESS David Orr
4:00 pm CLOSING TOWN HALL MEETING Engagement & Reflection
Breakout Sessions - Wednesday, October 12, 2011
1:30 pm Investing in Small Food Enterprises:
How To
Marco Vangelisti Narendra Varma Ari Derfel Carol Peppe Hewitt
1:30 pm Slow Money Case Studies.
Slow Money regional leaders discuss their work.
Kelly Childs Michael Brownlee Scott Collier Derek Denckla
1:30 pm Mission-Related Investing:
Strategies for foundations to invest in small food enterprises.
Stuart Davidson Jeff Rosen
1:30 pm Sky Trust and Soil Trust:
New Intermediation that Protects the Commons
Peter Barnes Woody Tasch
1:30 pm A Fundraising 101 Primer.
For entrepreneurs who are new to venture financing. This session will cover the basics, including Business Plan, financial projections, and legal structure.
Julia Shanks
1:30 pm The Future of Money.
Local currencies represent the ultimate alternative to globalization. This panel will explore the role of local currencies in rebuilding local economies.
Chris Lindstrom Katrina Scotto di Carlo
1:30 pm Debunking Myths about GMOs
Vandana Shiva Debbie Barker
1:30 pm Food Sheds.
Hear from three leaders who are mapping local food and heightening public awareness about food sheds and sustainability.
Gary Nabhan Sibella Kraus Anthony Nicalo Michael Dimock
1:30 pm Financial Planning and Slow Money:
Where does Slow Money fit in your portfolio? Three investment managers give their perspective on Slow Money
Eric Becker Wendy Holding Matt Patsky
Breakout Sessions - Thursday, October 13, 2011
3:15 pm Show Me the Money:
Capital Opportunities for Businesses. Entrepreneurs have more financing options than ever before to raise capital for our businesses. But how can we choose which are a good fit for our businesses if we don’t know that half of them exist, much less how they work? In this session, finance industry experts will paint a picture of the ever-evolving capital markets landscape, identifying the many financing options available, from local versions of traditional debt and equity, to newfangled revenue sharing and crowdfunding models, and beyond. Designed for entrepreneurs seeking capital.
Ari Derfel Elizabeth Ü Jenny Kassan
3:15 pm Local Food Systems.
Studies of local food systems in Ohio and Vermont are receiving national recognition, promoting policy initiatives and new strategies for supporting small food enterprises.
Ellen Kahler
3:15 pm Giving Something Back:
New visions of corporate philanthropy.
Janie Hoffman Terry Kellogg Sean Marx
3:15 pm No Small Potatoes:
Slow Money Maine launched No Small Potatoes Investment Club. Slow Money Austin is also in the process of launching an investment club. How do they work?
Scott Collier Linzee Weld
3:15 pm Slow Money Circle.
Opportunity for investors with serious interest in the deals to connect with one another, compare notes, and explore opportunities for shared due diligence.
Woody Tasch
3:15 pm New Slow Money Funds
Jeff Rosen Janice St. Onge Craig Wichner
3:15 pm Sister NGOs:
Meet the leaders of other organizations that are playing key roles building local food systems and local economies.
Anna Smith-Clark Michael Dimock Alicia Harvie
3:15 pm Philanthropy and Food Systems
Oran Hesterman Susan Clark John Fisk
3:15 pm Slow Money Case Studies:
Hear from three entrepreneurs who have received Slow Money and one Slow Money investor.
Cathy Berry Mason Arnold Kelly Childs Narendra Varma
Breakout Sessions - Friday, October 14, 2011
10:15 am Trees:
Monetizing the role of forests in preserving and restoring soil fertility and providing ecosystem services.
Connie Best Bettina von Hagen
10:15 am Compost vs. NPK:
Companies that are Building the Soil.
Teddy Stray Jack Chambers
10:15 am Co-ops and the New Food Economy
Guillermo Payet Daniel Fireside Paul Cultrera
10:15 am CSAs: Is it capitalism? Is it socialism?
The role of community supported agriculture and local food systems. Is the rapid growth of CSAs over the past decade pointing towards a larger role in the food system?
Guillermo Payet Paul Muller Rebecca Calahan Klein
10:15 am Building Tomorrow\'s Local Food Systems:
Next generation food entrepreneurs share their vision and experience.
Brahm Ahmadi Nikhil Arora Paula Somoza Manalo
11:45 am Preserving Farmland:
Can significant new sources of capital, both for-profit and non-profit, be mobilized?
Constance Washburn Craig Wichner Ralph Grossi Jim Oldham
11:45 am Local Investing:
Place-based strategies and the future of social investing.
Leslie Christian Don Shaffer Joel Solomon
11:45 am Agriculture and Carbon Credits:
A lively discussion about the merits of biochar and carbon credits.
Lopa Brunjes
11:45 am Local Stock Exchanges.
LanX (Lancaster, Pennsylvania), the Hawaii exchange, and Toronto’s Social Venture Network are designing and implementing new ways to support the flow of local investment.
Trex Proffitt David Fisher
11:45 am From Food Access to Food Commerce – challenge to opportunity
Oran Hesterman Michel Nischan John Fisk
11:45 am Public Policy and Local Food Systems.
Initiatives at the state and federal level supporting the preservation and restoration of local food systems
Glenda Humiston Michael Dimock Jim Slama
11:45 am Meet the Authors
Nate Downey Kate Levinson
11:45 am Mission Markets:
An in-depth look at this innovative marketplace that connects investors, issuers and environmental credit buyers and sellers within the impact and sustainable capital markets.
Michael Van Patten

Webinar: Local Investment Clubs: A Replicable Example from Slow Money Maine

Organize your own local investment club!
Part of BALLE's Accelerating Community Capital Series Find out what is working on the ground across North America to connect regional investors with regional businesses.
How to use this webinar series

Join with others from your area for the each Accelerating Community Capital webinar.

Hear firsthand about the best models working right now that you can replicate where you live.

Ask the presenters the questions you need to build local investing in your area.

Space is limited; register now!

Series participants will learn about innovative strategies to:

• Connect local businesses with local lenders, investors and donors,

• Earn a "living rate of return" while supporting the local economy, and

• Create jobs by strengthening family farms, local manufacturing,
and independent business.

Webinar pricing

Register now for this webinar and others in our series. Discounts available when you register for all of the remaining webinars!

• General public: $25 per webinar

• Series partners: including business members of BALLE networks; investors with RSF, Investors' Circle and Portfolio 21; members of Slow Money or AEO: $15 per webinar

• Staff and board of BALLE networks: Free!

Thanks to our ACC Series Partners

RSF Social Finance

Slow Money

Association for Enterprise Opportunity (AEO)

Portfolio 21 Investments

This month's webinar:
Local Investment Clubs: A Replicable Example from Slow Money Maine

Webinar Speakers:
Eleanor Kinney and Christopher Hallweaver, founders of the No Small Potatoes Investment Club, an initiative of Slow Money Maine

Date and Time:Slow Money Maine
Tuesday, September 6 at 10am PT
(11am MT / 12pm CT / 1pm ET)

About the topic:
The No Small Potatoes Investment Club is a group pooling funds and making micro-loans to farmers and food businesses in Maine since the fall of 2010. The club provides working capital in the form of low-interest loans, and meets three times a year to evaluate loan applications.

Initially, the club made individual self-directed loans, but since April of this year has been pooling funds and making loans as a group. Loans thus far have ranged from $2,000 to $15,000, with $5,000 as the investment commitment to join the club. Learn about some of the club's loan recipients:

* Heiwa Tofu in Camden
* Lalibela Farm in Dresden
* Thirty Acre Farm in Whitefield

Though this investment club is focused on micro-loans to food producers, the model is replicable in many other living economy sectors by BALLE networks, Slow Money chapters, and a wide range of formal or informal networks of community investors.

The model will also be featured at the 3rd Annual Slow Money National Gathering in San Francisco, October 12-14, 2011.
About the speakers

Eleanor Kinney Eleanor Kinney is a Founder and Vice-President of the No Small Potatoes Investment Club. She is on the Slow Money Maine steering committee and is an investor in several food businesses around the state. Eleanor serves on the board of Maine Farmland Trust and is a member of the Environmental Funders Network, a group of foundations and philanthropists making grants to Maine nonprofits.

Christopher Hallweaver Christopher Hallweaver is also a founder of the No Small Potatoes Investment Club and serves as its treasurer. By trade, Chris is a software entrepreneur who in the 1980s founded a software and system integration company. Chris has turned his attention to improving our local food systems with an ultimate goal of figuring out how Maine can feed Maine. He is opening his newest venture, Northern Girl, an organic vegetable processing center.
Accelerating Community Capital Webinar Series
For the first time, a growing number of investors are considering local options. With a new generation of local investment institutions and supportive public policies, literally trillions of dollars could move from Wall Street to Main Street, creating millions of new jobs and helping to build vibrant local economies.

What are the most promising new models to connect your local businesses with local lenders, investors, and donors? How can you earn “a living rate of return” while supporting your favorite businesses support local food, renewable energy, and independent retailers? What are the potential benefits for investing in your home, your own energy efficiency, and your family?

This webinar series will review pioneering efforts around the country with respect to local banking, credit unions, slow-money investing, cooperatives, self-directed IRAs, local investing clubs, and local stock exchanges.

Who should participate? Investors, bankers, businesspeople, community developers interested in creating new, community-based sources of debt or equity capital to support local living economies. We especially encourage groups—formal or informal—that include all these interest parties from one area to build a coordinated effort to accelerate community capital locally.

Friday, August 26, 2011

Equal Energy For All: Can We Democratize the Grid?

By Beth Buczynski

The Institute for Local Self-Reliance (ILSR) recently published an e-book (PDF) advocating complete democratization of the electric grid by abandoning a system that is dominated by large, centralized utilities for a 21st century grid made of independently-owned and widely-dispersed renewable energy generators

A democratized system for creating and distributing electric power ensures that the economic benefits of electricity generation are as widely dispersed as the ownership.

Why Now?

As long as communities still rely on centralized, fossil-fuel powered energy plants to generate power, democratization of the electrical grid will remain a dream. But the past 10 years have seen an exponential growth in the adoption of renewable energy alternatives, namely home solar and wind power, which presents an unprecedented opportunity for transformation.

As the technology and installation of these systems continues to drop in price, more private property owners are able to take advantage of their pollution and money-saving benefits. This increased accessibility makes it possible to turn any rooftop or open field into a mini-power plant. It is this level playing field that makes the dream of a locally-owned and managed electrical grid into a reality.

Examples of Democratic Energy

The key to democratizing the electrical grid is convincing municipal governments that distributed power generation is every bit as robust as centralized distribution. One way to visualize differences between a distributed and centralized grid is to think about the way that the internet is made up of files that live on millions of servers and computers around the world instead of one central server.

Power companies claim that home power plants creating more than 5-10 percent of local grid electricity would cause major technical problems, but in communities around the world, this has not proven to be true.

Germany has installed over 10,000 MW of distributed solar photovoltaics (PV) – mostly on rooftops – in the past two years and renewable energy now constitutes 17 percent of overall electricity generation. Half of Germany's wind power and three-quarters of its solar is locally owned.

The city of Kona, Hawaii, uses a 700 kilowatt (kW) solar array provides 35 percent of the capacity of the local distribution feeder. In Las Vegas, 10 MW of commercial solar PV on a distribution line provides 50 percent of capacity (and up to 100 percent during periods of low load).

California plans to add 12,000 MW of distributed electricity power by 2020, and 16 additional states have added a distributed generation mandate on top of their renewable electricity requirements.

“The battle for the future control and ownership of our energy system is on,” ILSR senior researcher Farrell maintains. “Utilities are fighting back by encouraging policy makers to put up roadblocks to a democratic energy future and by belittling renewable energy’s potential. The major barriers are not technical, but political.”

Creating a Shareable Grid

Farrell and other renewable energy advocates say that policy changes are necessary to overcome barriers to a democratic grid.

Those barriers include federal regulatory agencies that provide significant financial incentives for centralized energy projects and new high-voltage transmission; incentives that are unavailable to distributed electricity generation. In fact, many federal and state energy incentives discriminate against locally owned distributed energy generation in favor of centralized, absentee owned power plants.

But bureaucracy, industry lobbyists, and economic woes make it unlikely that we’ll see these barriers removed in a timely fashion. So encouraging a distributed grid may fall to entrepreneurs and community organizers instead.

In Canada, residents of Ontario can invest in local solar power projects by buying SolarShare bonds. The $1,000 bond provides a 5 percent annual return over five years and the money is invested in solar power projects across the province.

Investors also become voting members of the SolarShare cooperative, a project of the TREC Renewable Energy Cooperative that both develops community-owned renewable energy projects and educates Ontarians about renewable energy, energy conservation and the community power model.

In a similar effort, U.S.-based Solar Mosaic brings the popular crowdfunding technique to the clean tech industry by developing a way for communities to create their own renewable energy without going into debt.

Solar Mosaic members increase solar financing options in their neighborhood by purchasing "tiles" a $100 share of a community solar project. Participating property owners get to enjoy the low cost of clean energy without huge up-front costs or high interest rates from banks. Individual investors are paid back over time from the revenue the Tile generates while earning some fun goodies along the way.

Take Action

We may not be able to convince Congress that it’s time to throw the full weight of the U.S. economy behind the renewable energy industry and the formation of a democratic, distributed electrical grid, but it is possible to advocate important change in your own community.

Consider contacting your state representatives about the need for CLEAN Contracts (i.e. feed-in tariffs) and regulations that would require local utilities to share data about the current distribution network, allowing distributed generators to locate the best opportunities for developing new projects.

Also, look for opportunities to educate local officials about passing solar access laws that grant everyone the right to capture sunshine on their property for solar electricity and by changing building codes to encourage or require more on-site power generation.

Thursday, August 25, 2011

The Global Solidarity Economy Movement

Justice Rising: Building an Economy for People and Nature
Alliance for Democracy
by Emily Kawano

In a surreal twist, right-wing conservatives—
whose neoliberal policies of deregulation and
laissez-faire brought us this latest economic crisis—
seem to be riding a groundswell of support
in the world of domestic electoral politics.
However, a different truth is gaining traction in
the global economic grassroots. Long-term economic
distress, concerns about climate change
and rising oil prices, and dissatisfaction with business-
as-usual have led many people and communities
to engage in economic practices that put
people and planet ahead of profit maximization.
The US Solidarity Economy Network has formed
to strengthen and connect the myriad unconnected
alternative economic enterprises that have
grown out of this historic moment.
One example is in Port Clyde, Maine, where
fishermen broke with hundreds of years of
staunch individualism to form a co-op. Instead of
going for the biggest haul—overfishing—which
had led to the decline of the fishing industry, they
now make do with smaller catches and get better
prices by cutting out the middleman, selling
directly to local residents, and starting their own
fish processing plant.
In each continent there has been a steady
growth of Solidarity Economy movements. These
networks and economic enterprises are connected
through RIPESS (Réseau Intercontinental de
Promotion de L'Économie Sociale Solidaire), the
Intercontinental Network for the Promotion of the
Social Solidarity Economy.
RIPESS North America has brought together
Solidarity Economy organizations from the US,
Canada and Mexico at various meetings including
the US Social Forum in June 2010. This past summer,
RIPESS LAC (Latin America and Caribbean)
held a meeting in Medellín, Colombia that brought
together 350 people from 18 different countries. In
October, the African Solidarity Economy network,
which is still in the formative stage, will be
coming together in Morocco. In Europe
as well, many Solidarity Economy organizations
are working towards forming a
RIPESS-Europe network. The recently
formed Asian Alliance for the
Solidarity Economy has taken on the
considerable task of hosting the next
RIPESS Globalization of Solidarity
Forum in 2013.
The labor movement is beginning to
engage with the Solidarity Economy,
which it sees as a way to create jobs and address
poverty. The International Labor Organization
(ILO) is running a training this fall on the social
Solidarity Economy in Turin, Italy. It is also working
with Chantier (see page 2) in Quebec to organize
an international conference in October, 2011
on policy and the role of the state in the social
Solidarity Economy.
The crisis of climate change is driving economic
and political shifts that the Solidarity Economy supports.
For example, in April, 2009 the Declaration
on the Rights of Mother Earth that emerged from
the People’s Summit on Climate Change in
Cochabamba, Bolivia, was heavily influenced by
indigenous world views and calls for a whole new,
non-exploitative relationship to land, water, resources,
other creatures and among each other. We welcome
the strong emergence of this perspective.
With so much good work going on, it is critical
to foster economic integration so that these
pieces work together in order to grow and
strengthen the Solidarity Economy. The global
mapping process is a key piece to accomplishing
this goal. There are some great mapping platforms
that serve a number of functions including,
1) enabling consumers to find Solidarity
Economy goods and services; 2) enabling
Solidarity Economy producers and suppliers to
connect to build solidarity supply chains; 3) collection
of data for research that can identify best
practices and be used for the construction of supportive
policies; and 4) the promotion of linkages
between individuals, organizations, networks and
movements involved in the Solidarity Economy
through social networking. This kind of multifunctional
mapping and economic integration is
crucial in the next and necessary stage of building
an economy for people and nature.
Emily Kawano is the Coordinator of the US
Solidarity Economy Network.
The Global Solidarity
Economy Movement

Growing the Solidarity Economy

Justice Rising: Building an Economy for People and Nature A Publication of the
Alliance for Democracy
by Nancy Neamtan, excerpted from her talk at the USSF

The Solidarity Economy—
what we call the
social economy in Quebec—refers to cooperative,
collective and non-profit, democratically-
controlled enterprises, that emphasize the
primacy of people over capital and embrace a
philosophy of empowerment, equality and
inclusivity. Their goods and services respond to
the needs of the community. These enterprises
do not move away, sell out, or lay off masses of
workers in order to maximize return to shareholders.
They are born out of the need and
aspirations of the community, which will not let
them fail. Even conservative politicians want to
keep jobs in their community.
We used to define our institutions as a community
radio station, or a fair trade organization,
or a co-op with no common umbrella for
defining institutions as part of the economy.
Then in 1996, we came together to establish
the Chantier de l'économie sociale. Our first victory
was for the government and the private
sector to recognize that we are part of the economy,
which gave us the standing to engage in
the policy dialogue.
As a result, the
Chantier or its allies
proposed every piece of
successful public policy
in the last 15 years. The
old top-down approach
does not work, because
you cannot force programs
on people.
Having useful public
policy means that the
priority has to come
from the bottom up.
You have to find out
what the needs are.
We have done a lot of
work around access to
capital. We raised private
money and a government
match to create
a $10 million fund
that made non-guaranteed
loans up to
$50,000 to co-ops and
non-profits. Everybody
thought we were crazy.
But, we were able to
show that this was one of the most solid ways
of investing in job creation. Now lots of local
funds have opened up to collective enterprise.
The next issue became access to equity,
because as our projects grew, we cannot just be
borrowing millions of dollars and then have to
pay it back the next day. That is not the way
General Motors or any other big corporation
works. If they need money, they sell you shares
on the market. And if you want your money
back the next day, you can sell it back on the
market, but the enterprise does not have to pay
it back. So, of course they can develop.
But the Solidarity Economy mission is not
to give return on investment to outside shareholders.
On top of this, when venture capital
comes in to finance an enterprise, they will
share the risk, but they also share the power. We
cannot do that with democratically controlled
enterprises. So we needed to create democratically
controlled tools for investment.
As a solution, in 2006 we were able to
negotiate seed money from the Canadian government
and leveraged some other capital to
create a $52 million investment fund controlled
by the Chantier Trust. Now we have financial
instruments responding to the needs of the
Solidarity Economy actors and enterprises.
In Quebec, the biggest venture capital
investors now belong to the movement. Unions
negotiated with the government to create a $7
billion pension fund that gives a tax credit if
you put money into it. In return, the fund has
to invest 60% of their money to create and
maintain jobs in small and medium-size businesses.
And there is a similar fund with a billion
dollars that invests in self-management, environmental
or Solidarity Economy enterprises.
Now we have the venture capitalists running
after us, because we came out of the crisis on a
smooth economic rise. When comparing risk to
margin of return, we come out smelling like a
rose. The circle just grows and grows and grows.
Nancy Neamtan is President and Executive Director of
the Chantier de l'économie sociale. For the past 20
years, she has been involved in various organizations
devoted to community economic development and labor
force development and training.
Growing The
Solidarity Economy
Economic Twists
• The economy is the work people do every day.
The economy is not the stock market
• The financial crisis shows that private enterprises
are more dependent on government support than
non-profits and co-ops.
• Why is it that private companies that provide
public services get government contracts that pay
high wages and a tidy profit, while non-profits providing
public services only get grants that pay low
wages and allow no year-end surplus?
• Solidarity Economy enterprises should pay lower
taxes and receive subsidies because they produce
social benefits.
• Private businesses that harm the public good
should pay higher taxes and receive no subsidies.
• Nobel Prize winner Elinor Olstrom points out that
the best way to manage resources is not through
the private sector and not through the government
bureaucracies, but by democratic organizations
controlled by users.
• Private enterprise thinks that market share belongs
to them. But many things are better done by the
Solidarity Economy.
• When a co-op fails, it is not because the model is
not good.
• When a private business fails, it may well be
because the model is not good.
Nobel Prize
winner Elinor
Olstrom points out
that the best way to
manage resources is
not through the
private sector and
not through the
government bureaucracies,
but by democratic
controlled by users.

Wednesday, August 24, 2011

It was better when they turned bad checks

Cospa Abruzzi: it was better when they turned bad checks
August 23, 2011
(translated from Italian poorly into English by Babelfish)

All speak about the crisis, from the most picked to more ignoring, from richest to poor and thus via saying, but nobody has understood truly which it is the financial cause of this disaster, many less political You than turn, indeed of alternated turn.

We are sure that none of you is to acquaintance of the second currency, that which came used from the small and average enterprise. This virtual currency allowed the Italian entrepreneurs to survive by autofinanziandosi, an effective and fast method, a system that the banks would have to put into effect for the resolution to this damned crisis, than with a next effect dominates door to touch the bottom to all. A currency parallel to that be them that it gave wide breath to the entrepreneurial world to which approached with simple banking transactions, now has been abolished from the bureaucrats, unaware of of what it could happen. In truth it was not a lawful method, however it works them that she allowed anyone was in difficulty, to resume itself in case of lacked gain for causes act of God.

“The second currency is not other that the bancari checks and I will pay puttinges in circle.”

These titles them, to time issued ones came turned in order to pay the creditors, than to they they yielded them to time in payment to others, until and to exhaust the space for the turn, in this way, in the time had created a system parallel to that lawyer. At last, the titles them after to have girovagato in the entrepreneurial world, it re-entered in payment near the credit institutions after varied months. This second currency came used for the management of the companies, while the legal currency, came used for the payment of the taxes or other services. The checks once puttinges in circulation, before being embedded passed several months, once re-entered to the institute, the account holder had all the time necessary to honor the title it in liquidity lack on the account. What that now is not more possible. This allowed the companies that crossed a period of lean, to simply exceed it with a check turn between friends. The banks were to acquaintance of the situation, but for having the situation under control, they have taken agreements to the aim to force the entrepreneurial world to abandon the turns on the titles them, with norms established from the credit institutions. These normative new have put out of service the second currency, that flebo that it held the Italian economy while still alive, not understood from who perceive the wage of true money. Today, with ignoring politics, far from the entrepreneurial, far world from the requirements of the citizens, the Italians find again themselves without money for guilt of who did not know the existence of the second currency. That virtual currency that for decades has allowed the economic development of Italy.

Tuesday, August 23, 2011

Time Banking, Independence, and Community

by Charles Eisenstein

Adrianne McCurrach of the Santa Fe Time Bank wrote in her email newsletter about her experience at the recent Time Banking Conference,

There were times I bent my head to wipe away an escaping tear. SO many people in one place working to transform our culture into a place where all people are recognized for what we have to offer and where those assets are recorded and rewarded. Certainly we are meeting needs that would otherwise not be met if we were only using cash. We are also rewiring our brains: I want to know the people around me and engage in my whole community. This is the hard work - really committing to re-build community. Some of us may already know that it can be sticky sometimes - communication styles vary and we're so used to depending on the dollar to meet our needs. What happens when we depend on PEOPLE? Believe me, I know how hard that is. A few have heard me say that I was raised to believe that I am the only one I can count on and that if someone does me a favor I owe them. I am so tired of keeping that tally in my brain, and I am so tired of declining help, even if I need it. Fortunately, its not "all or nothing." We can do one thing a day, a week, a month and start to make change. Many of you have joined the time bank and haven't yet started exchanging... take the leap... go meet someone you don't know in the time bank. Invite them to coffee/tea/food. It really is something simple you can do to make a difference - a call to action really.

Indeed, so used to depending on the dollar are we that to depend on actual people is scary. But in fact, we are not really becoming more dependent when we enter the world of time banking. We are simply exchanging dependency on distant strangers for dependency on people we know. And that, as Adrianne implies, is what community is. It is a group of mutually dependent people.

We cannot have it both ways -- we cannot have independence and community at the same time. Community is not an add-on to a modern consumer life; it is a fundamental shift in being.

There will always be ways in which we depend on distant strangers. Ours is an interconnected world with a global coordination of labor, or, we might say, of gifts. If you use technology, for example a telephone or the internet, you are dependent on millions of people around the world who contribute to the production and maintenance of high-tech systems. That is why I think a money economy will continue to exist. It will occupy a diminished role, however, as we turn toward local providers to meet those needs that CAN be met locally.

In our highly monetized society today, we hardly depend on anyone we know; in fact, we pride ourselves on not depending. But like Adrianne, many of us are getting tired of living in an alienating, atomized society. We want not independence, but ties. But to develop them can be scary, because immersed in the mythology of the separate self, we want not to depend on anyone. To have money meant, "I don't need your gifts, I can pay for it, thank you." To receive gifts, to receive charity, puts us in a position of obligation, of debt. Strange it is to me, that people prefer to owe money to vast impersonal institutions than to owe favors to those around them.

Time banking and other forms of local gift economy entail a shift of consciousness, so that we no longer fear connection. To receive is to owe: even if no one is keeping track, when we receive the gifts of others we are cast naturally into a feeling of gratitude, and from it, the desire to give in turn.

The freedom of financial independence is a fake freedom, because it means dependence on distant strangers. It is also a useless freedom, because whether or not moved by obligation, we desire to give anyway. Are we so stingy that we wish never to owe anyone a favor?

Thursday, August 18, 2011

How America Could Collapse

by Matt Stoller
from The Nation
July 27, 2011

A few months ago, a friend in the entertainment industry told me of a new business model in Hollywood: hoarding videotapes. Apparently, the earthquake in Japan knocked offline a Sony factory that makes certain types of tape. That factory was also in the tsunami zone, so now there’s a serious tape shortage threatening the television industry. The NBA scrambled to get enough tape to broadcast the NBA finals; one executive told the Hollywood Reporter, “It’s like a bank run.”

In the last few years, economists have spent a lot of time and energy thinking about bank runs. A bank run happens when depositors think a bank is weak and scramble to get their money out before it collapses. “Tight coupling” of financial institutions, like when banks are overly dependent on each other, can create a cascading series of problems for the system itself. We saw this with Lehman Brothers when it went bankrupt. Its AAA-rated debt instruments lost value unexpectedly; that caused money market funds that held those presumably safe bonds to suddenly lose value. A shadow bank run was the result, as investors rushed to withdraw from the money market funds.

Worryingly, there’s been very little consideration of how systemic collapses can happen in another, perhaps more dangerous realm—the industrial supply system that keeps us in everything from medicine to food to cars to, yes, videotape. In 2004, for instance, England closed one single factory, which caused the United States to lose half of its flu vaccine supply.

Barry Lynn of the New America Foundation has been studying industrial supply shocks since 1999, when he noticed that global computer chip production was concentrated in Taiwan. After a severe earthquake in that country, the global computer industry nearly shut down, crashing the stocks of large computer makers. This level of concentration of the production of key components in a globalized economy is a new phenomenon. Lynn’s work points to the highly dangerous side of globalization, the flip side of a hyper-efficient global supply chain. When one link in that chain is broken, there is no fallback.

Lynn has continued to study industrial supply shocks and says, “What I have found most interesting recently is the apparent role supply chain shocks played in triggering a synchronized slowdown of industrial economies in April—production down (in USA, China, Europe, Southeast Asia), jobs down, demand down, GDP numbers down—due almost entirely to the loss of a single factory that makes microcontroller chips for cars.”

Today, the problem manifests as shortages of videotape or auto parts, but the global supply chain is so tangled and fragile that next time it could be electronics, weaponry, or even food or medicine. As Lynn noted in an interview with Dylan Ratigan, China controls 100 percent of the national supply of ascorbic acid, which is a basic food preservative. Leading oncologists are already warning that we are experiencing severe shortages of generic yet pivotal cancer drugs, because there’s no incentive for corporations to make them.

According to Lynn’s groundbreaking book End of the Line, the essential problem is a basic shift in the way that American multinationals operate. In the 1980s, the competitive manufacturing threat from Japan led most large companies to eliminate waste in their production facilities. As a result, they stopped keeping spare parts on hand. Eventually, companies began outsourcing production itself, as profits came increasingly from extractive monopolistic power over an economic system. Walmart is an important example; its profits come from the power it can exert on its suppliers, telling them what to make and how to make it, while the company itself functions as a giant autocratic marketplace and trading operation. Increasingly, this is the model of success in our global economy. Boeing, Cisco, Apple—all of them rely on their power over an ecosystem of production facilities halfway around the world. They have become rent extractive profit-machines, which is a relatively new phenomenon.

It was in the 1990s that American multinationals, spurred by government policy, began outsourcing operations to China. At the same time, the Clinton administration steadily relaxed antitrust enforcement, leading to massive corporate consolidation and the creation of the virtual firm. By the early parts of the last decade, the ideal American multinational made its profits by using its market power to gut labor and supply prices and by using its political power to eliminate taxation. All of this turned giant American institutions against making things. This is why we rely on a British factory to make our flu vaccine, why global videotape production was knocked offline by a tsunami and why that same event slowed the gigantic auto industry. US corporate leaders now see the idea of making things as a cost of doing business, one best left to others. What has happened as a result is that much of the production for critical products and services that make our economy run is constructed by a patchwork global network of suppliers all over the world in unstable regions, over which we have very little control. An accident or political problem in any number of countries may deny us not just iPhones but food, medicine or critical machinery.

Andy Grove, co-founder of Intel, has made the case that America needs to be building things here, investing here and manufacturing here. We need the know-how and the ecosystem of innovation. The more corporate America seeks to push production risk off the balance sheet onto an increasingly fragile global supply chain, the more it seeks to wound the state so there is no body that can constrain its worst impulses, the more likely we will see a truly devastating Lehman-style industrial supply shock.

There’s a good amount of grumbling about the state of American infrastructure—collapsing bridges, high-speed rail, etc. But American infrastructure is not just about public goods, it’s about how the corporations that enforce, inform and organize economic activity are themselves organized. Are they doing productive research? Are they spreading knowledge and know-how to people who will use it responsibly? Are they creating prosperity or extracting wealth using raw power? And most importantly, are they contributing to the robustness of our society, such that we can survive and thrive in the normal course of emergencies?

The answer to all of these questions right now is “no.” And while this may not be hitting the elite segments of the economy right now, there will be no escape from a flu pandemic or significant food shortage. The re-engineering of our global supply chain needs to happen—and it will happen, either through good leadership or through collapse. This means that our government and our society needs to reorient our economy toward manufacturing and rededicate our corporations to productive uses. This will require a new conception of antitrust laws to ensure that monopolistic or oligopolistic practices in pivotal industries aren’t placing our culture at risk. It means understanding the networks of suppliers and sub-suppliers. And it means ending the race to the bottom that pushes deflationary pressures on labor and the social safety net. All of this can insure a more robust culture and economy, one which can withstand national security or environmental challenges. The sooner our leaders, both in public and private institutions, recognize how highly vulnerable we are to a societal collapse, the better chance we have of avoiding collapse.

Tuesday, August 16, 2011

An Economy Turned Upside Down

by Mira Luna

While mainstream America is hoping for federal economic reform, some social justice organizations have a radically different idea, and are organizing low-income communities to build a new economy from the grassroots up. Tired of asking for change from the top down, they are taking their economy into their own hands. Social justice organizations, having a strong membership base rooted in community, are ideal spaces to cultivate alternative economic projects, as relationships of trust and solidarity have been nurtured over time through education and a history of taking action for justice. Here are some exciting examples of grassroots alternative economy projects for social justice.

Read the rest of the article here.

Wednesday, August 10, 2011

Participatory Budgeting Gains Steam in San Francisco

By Michael Levitin

Participatory budgeting becomes a mayoral campaign issue in San Francisco, which could lead to San Francisco becoming the first U.S. city to adopt participatory budgeting on a city-wide basis.

When Mayor Ed Lee ventured across San Francisco’s 11 districts this spring talking with residents about what to cut and what to save from the budget, he won praise for opening what some called a new era in fiscal discourse: giving people a more direct say about where their money is spent. But what if, rather than the mayor in the driver’s seat, it was the community itself that presented, weighed and voted on district budgets? The idealistic notion under consideration in San Francisco, sometimes called “participatory budgeting,” hands decision-making power for budgets to the residents of neighborhoods and whole cities.

Read the rest of the article on

Monday, August 8, 2011

Alternative Currencies and Monetary Systems Comparison Chart

Check out Michel Bauwens "Alternative Currencies and Monetary Systems Comparison Chart" on Social Compare and the P2P Foundation sites.

This powerpoint I developed last year for a 4 hour presentation on community currencies for the US Social Forum gives a detailed but dated comparison as well.

Sunday, August 7, 2011

Legal Entity Options for Worker Cooperatives

Edward W. De Barbieri and Brian Glick (2011). Legal Entity Options for Worker Cooperatives. Grassroots Economic Organizing (GEO) Newsletter, Volume 2, Issue 8.

This article is provided strictly for informational purposes. Should you have specific questions about the particular laws in your state, please consult an attorney admitted to practice in your jurisdiction. Although the section briefly identifies some tax implications of various legal structures, it in no way intends to provide tax advice; for specific tax concerns please contact a professional tax adviser familiar with cooperatives. Each legal structure has implications for various workplace laws; those legal issues are outside the scope of this article and we recommend consulting with an expert. Until a worker co-op forms a legal entity, every worker owner will be personally liable for any co-op debt or obligation, and individual worker owners' personal signatures will be required for contracts, bank accounts, etc. So it is generally safer and more efficient for a worker co-op to form itself as a legal entity as it begins to engage in substantial business.

Introduction to the Project
We are preparing a legal guide to worker co-ops in response to requests from worker centers and community-based organizations in predominantly low-wage, immigrant communities. The Guide is being developed by Urban Justice Center, National Employment Law Project, and Fordham University School of Law Community Economic Development Clinic. Our offices represent low-wage workers and have developed expertise concerning worker co-ops in low-wage immigrant neighborhoods mostly in New York City.

The Guide will profile successful and struggling worker co-ops striving to bring increased income, dignity, and control over working conditions to low-wage, vulnerable, and immigrant workers. In addition, the Guide will analyze important considerations to evaluate when forming a worker co-op. It will include extensive annotated resource bibliographies. We excerpt here the section of the Guide addressing legal entity options for worker co-op formation.

We welcome comments, questions or suggestions about this section and our larger project. This section is a work in progress based on our New York experience plus initial research and discussion regarding other parts of the country. Please tell us more about law and practice in your area. Email feedback to

Introduction to Legal Entity Options for Worker Co-ops
Each state's laws provide for certain general forms of legal entity, and some states offer additional options. Each entity form imposes requirements on the organization structure, responsibilities of the members to each other, to the cooperative and to the outside world. Factors to consider in determining whether to form a legal entity, at what stage to form it, and which entity structure is most appropriate include: (1) the type of industry (2) sources of capital and finance and how much control individuals or entities providing capital require; (3) structural flexibility, especially if a nonprofit organization wants to retain a role in governing a worker co-op that it formed and incubated; (4) tax consequences; (5) immigration law consequences; (6) how important it is to use the words "cooperative" or "co-op" in the entity's legal name; and (7) the group's capacity to comply with tax and other filing requirements imposed on various types of legal entities; and (8) any other state specific considerations that might arise. Until a worker co-op forms a legal entity, every worker owner will be personally liable for any co-op debt or obligation, and individual worker owners' personal signatures will be required for contracts, bank accounts, etc. So it is generally safer and more efficient for a worker co-op to form itself as a legal entity as it begins to engage in substantial business.

Depending on the laws of the state, or states, where the cooperative is operating, more or fewer options may be available. This section discusses two major types of legal entity options that are available to worker co-ops: the Limited Liability Company (LLC) and the Worker Cooperative Corporation. For each type of entity we discuss its governance structure, form of payment to workers and tax treatment. In the full Guide we will also discuss a third option, the general Business Corporation. We would appreciate learning about the experience of worker co-ops and their attorneys that have used this option (or any other option we may have overlooked).

Limited Liability Company (LLC)
This is a relatively new form, introduced throughout the U.S. in the early 1990s. State registration and filing requirements for LLCs are usually minimal in comparison with the requirements imposed on corporations. The LLC provides the benefits of limited liability similar to a corporation, while providing favorable tax treatment.

Worker Coops in many states, including Massachusetts, California, and New York, have used the LLC to form successful worker co-op ventures. LLCs use a system of internal capital accounts which can be readily adapted to establish a patronage and accounting system that follows the traditional model established by the Mondragon co-ops in northeastern Spain. Some states that have special co-op corporation laws do not allow an LLC to use "co-op" or "cooperative" in its official legal name even though the LLC is organized and operated according to co-op principles.

Limited Liability
The concept of limited liability means that the personal liability of an individual involved in a legal entity (for debts, obligations, damages, etc.) is limited to the amount of money that individual invested in the entity. For instance, if each member of an organization with limited liability contributes $500, and the organization is unsuccessful, each member only loses her $500. She cannot be held responsible for any additional debts the LLC incurs.

LLC: Governance
The laws allow great flexibility in the governance structure of an LLC. Workers and others can form an LLC by filing simple Articles of Organization with the state government and creating and signing an "Operating Agreement" which determines the co-op's governance and financial arrangements. The operating agreement is a contract among the members of the LLC, including worker-owners and any investors or incubating and sponsoring groups that will be part of the co-op. There are no legal limits on which individuals or types of organizations can be LLC members.

Decision making can be set up in any way the members want. They can create a board of directors, or all members can make decisions together. It is important to clarify who can act on behalf of the LLC. If there is no board, and all members make decisions as a group, each member has the legal power to bind the entity unless expressly restricted in the LLC Operating Agreement.

In an LLC there is no legal requirement that voting power be linked to capital investment, profit share or any other financial factor. For example, investors can be re-paid through a large initial share of profits while worker-owners hold a majority of seats on the board of directors. Or an incubating group which takes no profit share could have a board seat and veto powers to make sure the co-op remains cooperative and serves the broader community and the goals which led the incubator group to help form the co-op.

LLC: Distribution of Income to Worker-Owners
In some LLC worker co-ops, the worker-owner members are paid wages and benefits as employees and also receive a share of profits as co-owners. Alternatively, some LLC worker co-ops have found it advantageous to have no employees. Worker-owners are co-owners only. They receive only a share of profits, no wages. The LLC gives each worker-owner a weekly or bi-weekly advance against projected annual net profits, adjusted at the end of the fiscal year. (In an LLC worker owners are not protected by workplace laws that cover "employees," such as wage and hour laws, unemployment insurance, and workers compensation. Also, the LLC does not withhold and remit income taxes from the worker's pay, as an employer does, and the worker is responsible for paying the full amount of social security and Medicare taxes, which are shared evenly by an employer and employee in a traditional employment relationship.)

LLC: Tax Treatment
An LLC does not pay income tax as an entity. Each LLC member owes income tax on her share of the co-op's net income (after expenses). The member owes income tax on her full share, even if only part of that share is distributed to her and the rest is kept in the business. In California each LLC must also pay a state franchise tax of $800 per year.

Worker Cooperative Corporation
Several states, mainly in the Northeast, have adopted legislation designed specifically for worker co-ops. In other states, workers who want to form a worker co-op as a corporation instead of an LLC are left to organize under their state's general co-op corporation law or business corporation law. Here we discuss worker co-op laws. In our full Guide, we will also address how worker co-ops can form under a business corporation law, using carefully drafted bylaws and shareholder agreements. Use of nonprofit general co-op corporation laws for marketing referral worker co-ops is discussed in the sidebar on this page. .

Worker co-op corporation laws require adherence to basic cooperative principles, such as equal voting independent of capital invested. Each worker owner purchases a single share (by lump sum payment, a loan which is paid off over time, or through her labor - sometimes called "sweat equity"). Worker co-op corporation laws permit internal capital accounting and distribution of earnings based on patronage (hours worked or wages earned). They require the use of the word "cooperative" or "co-op" in the corporation's legal name.

Marketing & Referral Worker Co-op Models
Workers involved in service industries, such as cleaning, childcare, or other maintenance or domestic work, may form nonprofit marketing and referral cooperatives to support their work. In this kind of arrangement, the cooperative functions as a means for members to pool their resources for marketing the services that each member provides individually. The cooperative could also provide support and training to members. Since such cooperatives are not designed to earn and distribute profits, they may form as non-profit corporations under a state's general cooperative corporation laws. These types of co-ops are formed and governed like other non-profit corporations.

Marketing and referral cooperatives are taxed as corporations. While ineligible for tax exemption under Section 501(c)(3) of the Internal Revenue Code (since their activities are not exclusively charitable and educational), they might qualify under Sections 501(c)(4) or 501(c)(6), which protect co-op income from federal income tax but do not allow donors to take tax deductions for their contributions.

Worker Cooperative Corporation: Governance
Each worker owner owns and votes a single share. Shareholders elect a Board of Directors which may hire managers accountable to the Board. No non-worker can hold a voting share. In order to raise capital, some worker co-op corporations issue shares with no voting rights (except over changes in the treatment of those non-voting shares). These "preferred shares" have priority in dividend payments but receive only a fixed rate of return. This finance system is consistent with cooperative principles since governance remains based on one voting share per worker owner.

Worker Cooperative Corporation: Distribution of Income to Worker-Owners
Worker-owners are generally paid wages as employees and, in addition, some corporate income is distributed to each worker as a dividend based on patronage. Un-distributed corporate earnings are added to each worker's internal capital account (in proportion to patronage) and any losses are deducted from those accounts. To raise money to invest in new equipment or other capital expenditures, the co-op can borrow from internal capital accounts instead of taking out a loan and paying a high rate of interest. (Worker co-op corporation laws also allow retention of some earnings in a collective internal account to be used for capital expenditures.)

Internal capital accounts are paid out to worker owners every few years, with modest interest. For the complete Guide, we plan to look into whether a worker co-op corporation can, like an LLC, be set up so that the workers are not employees, but only owners who receive in place of wages a weekly or bi-weekly advance against projected patronage dividends.

Worker Cooperative Corporation: Tax Treatment
Worker cooperative corporations can manage their tax liability at the corporate level by carefully following Subchapter T of the Internal Revenue Code. Under this subchapter, patronage dividends are exempt from federal corporate income tax. Only the individual worker pays tax on patronage dividends. Note, however, that Subchapter T restricts the deductibility of patronage dividends on the basis of the time that distributions are made, in what form distributions are made, how distributions are allocated among member-patrons, and limits on the source of income. (Autry & Hall, p. 90.)

The Table below summarizes the major differences between the Limited Liability Company and the Worker Cooperative Corporation structures for worker cooperatives

This Guide is being developed by Urban Justice Center, National Employment Law Project, and Fordham University School of Law Community Economic Development Clinic. This Guide would not be possible without Sarah Leberstein, Staff Attorney at National Employment Law Project, Gowri J. Krishna, Clinical Teaching Fellow at Fordham University School of Law, who both contributed to early drafts of this article, and numerous Fordham law students.

The permanent link to this issue is

About the Authors

Edward W. De Barbieri is Staff Attorney and former Equal Justice Works Fellow at the Community Development Project of the Urban Justice Center in New York City. His practice involves representing community-based nonprofit organizations and worker-owned co-ops in business and transactional matters, and defending homeowners in foreclosure.

Brian Glick is a lawyer, teacher, writer and activist who founded Fordham Law School's Community Economic Development Clinic after 16 years as a legal services community development attorney in Brooklyn, NY. The CED Clinic provides transactional representation (non-litigation business lawyering) to nonprofit and co-op groups fighting for social justice in low-income communities and low-wage workforces.

Edward W. De Barbieri and Brian Glick (2011). Legal Entity Options for Worker Cooperatives. Grassroots Economic Organizing (GEO) Newsletter, Volume 2, Issue 8.

Thursday, August 4, 2011

Living Without Money is an Act of Community

By Matthew Slater

As a monetary activist, I shun state-sanctioned-commercial-debt money (like the US dollar or Euro) as much as possible. Generally, individual actors making economic protests against state-sanctioned money are little more effective than fish protesting the water. That's because money and the economy are functions of community, and it is only in partnership with their communities that the politically disenfranchised ninety nine per cent can claim back their lives from wage slavery and the permanent shortage of employment. So I'm living by building software for community money; I depend on gifts and occaisionally sympathy to meet my basic needs. In monetary terms, I'm a beggar, but in spirit, I'm a superempowered, superconnected and self-determined individual!

Negative Outlook

While governments tell us to brace for austerity, they are not acknowledging the full extent or nature of the problem we face. While its true that bailing out the banks was very expensive, what most people don't realise is that the commercial debt-money system has catastrophic failure built-in, once resource extraction fails to keep pace with interest repayments on an expanding money supply. So while people are angry at governments for socialising losses of private corporations, they are not being educated that these debts will never be paid off, that big banks are now effectively able to demand as much interest on national, and personal debts, as we can bear, forever. Therefore, the national currencies themselves have become instruments of servitude and serfdom.

Remember that the banks extract their dues through interest payments on things like mortgages and overdrafts, through taxes spent on managing government debt, as well through derivative speculation and financial services such as pensions. To banks, the little people are but cells in the matrix generating wealth; money, interest, and the stock market are the mechanisms that transfer that value to where banks want it, to them.

So every time you pay pax, interest, bank charges, card fees, or enter into agreements such as for pensions, you are entering into relationship with a vampire squid, as Rolling Stone reporter Matt Taibbi called investment bank giant Goldman Sachs. And consider that most industry is run on credit, a significant portion of the cost of goods is in fact interest. Big banks have a hand in everyone's till. That's why the Age of Leisure expected since the industrial revolution never seems to arrive.

So is it part of the social contract that we each pay an unreasonable tithe to the banking industry?

Effectively, Yes.

And is it even possible to avoid such extractive relationships in a so-called free society?

It is just about legal, but not very convenient. I don't earn money, or own property, or a car. In addition I have no phone or bank accounts. Consequently I have to depend on gifts of food, shelter, hardware, cash and flights. This is precarious, but the more people turn from parasitic pyramidical structures, the more they must share and trust one another.

A Range of Solutions

This sharing and trusting takes different forms depending how many people are involved. Here is my list from small, radical bottom up solutions to larger, more moderate top down solutions.

* informal sharing: Using reciprocal gifting and sharing of resources like accommodation, equipment, transport, and cooking and childcare, networks of individuals can improve their wellbeing and 'work' less. Taking it to the extreme however, in a commune, can be a lot of work, and many projects don't survive the intensity!

* Villages: Villages can formalise their sharing networks, engage in group-buying with the help of a premises for redistribution. They can consider medium scale projects with land ownership and energy generation. Once the community is too big for everyone to communicate directly, and trust, everyone else, software can be very useful, especially when it includes accounting tools. (This is what I am making). Accounting helps to monitor where resources are coming from and going to, and to ensure that, on some scale, people are giving and getting in fair proportion. It also indicates where hard currency expenses could be internalised by investing in, say, a windmill, or bakery.

* Industries / Businesses: There are already well established ways for business to save money by using credit clearing with their peers instead of direct payments. Especially in the US there are many legal business to business (B2B) barter networks supporting trade and helping with taxes. By joining such networks, business can reduce their dependence on debt money, as well effectively paying in-kind when dealing with other local traders. Bigger industries sometimes use a technique called Counter trade for international trade, which protects them from currency fluctuations and reduces need for cash. See the International Reciprocal Trade Association to learn more about about business bartering.

* Cities: At this level though the city government can take the courageous step of accepting a local currency for tax, and spending it, all of which adds up to less debt money in circulation and less vulnerability to central government redistribution. One town is Austria, Voralberg, is doing this! There's also room for 100% reserve saving/lending institution like the JAK bank or building societies. Note that such insitutions can never be as profitable as banks, which have the power to create as much money as they can lend.

* States / regions: In the US, the newly formed Public Banking Institute is working to form State owned banks similar to the Bank of North Dakota (BND). North Dakota is now the most solvent of all states due in large part to BND. The bank, I understand, still produces debt money, but the debt is owned by the state, not leveraged, funnelled into private hands and gambled in the derivatives market.

* Countries: Most elected leaders and those in authority do not understand the nature of money. The few who talk sense, such as Ron Paul in US and Douglas Carswell in UK are excluded from the mainstream discussion. There are many possible ways for countries to move forward so decision making is hard, even for the opposition! National level options include public banking, returning to the gold standard, or defaulting on national debts and rebooting national currencies. Working at this level, one shouldn't expect great results in one lifetime.Banking is the most powerful lobby of all.

The so-called austerity measures will last until the 'too big to fail' banks are persuaded not to maximise their profits and political power, which won't be any time soon. The disaster being sold to us as the financial crisis is a grand narrative to convince us to accept the next order of magnitude of financial vampirism and disenfranchisement. Whether through education, medicine, credit cards or mortgages, more and more people are falling into debt. Bankruptcy is not the relief it used to be. And debt is the ball and chain that forces us to work to get money, because the state only recognises debts denominated in money. We must disengage while we still can! I say, we need to be trying all of the above.

Wednesday, August 3, 2011

The Importance of Reputation: Airbnb Rental Horror Story Keeps Getting Worse

Editor's Note: People trash room rentals all the time, but businesses are usually mentally and financially prepared for it. They have people ready to clean rooms, steam clean floors, and often charge clients credit cards for damages. They don't leave personal items in the rooms and they don't take it personally. But AirBnB renters expected the company to provide trust. Is AirBnB to blame? Perhaps, for not having a solid reputation and verification system in place and for not giving insurance guarantees, which seem a no brainer. Trusting a national business as an intermediary, whatever their reputation method (Facebook profiles can easily be deceiving), is not the same thing as trusting a neighbor, a friend of a friend, or local client for a reference. It's an interesting design challenge for a company that is national out of necessity (catering to out of towners). You wouldn't want to exclude shy people or poor people from using peer to peer services. Couch surfing and Warm Showers and others may face similar challenges. On the other hand, these services as they have managed thousands upon thousands of transactions, have created positive experiences for many, creating more trusting attitudes. Let's not let a few rotten eggs spoil the shift to a sharing, trusting culture.

From Consumer Affairs
by James R. Hood

Would you use the Internet to make a blind date? To buy a car sight unseen? Send a money order for a few thousand dollars to collect millions of dollars in a sweepstakes you didn't enter?

OK fine, but would you use the Internet to rent your apartment to a perfect stranger?

Believe it or not, people do this every day using, a site that takes the Web sharing concept to new heights. Basically, Airbnb lets you rent your house or apartment to someone you've never met and whose identity you are not given.

Of course, Airbnb has never met this person either but, taking a page from the dating site playbook, claims it thoroughly checks the references of would-be renters.

It didn't work out so well for a San Francisco blogger known as "EJ." She rented her apartment last month while she was out of town on a business trip. When she returned, the place had been trashed and EJ hastened to the keyboard to describe the damage in chilling detail.

EJ's renters not only trashed the apartment and stole numerous valuables. They also took the time to thoroughly investigate her personal documents, thus gaining access to account numbers and other data useful for future identity theft adventures.
Sincerest regrets

Airbnb dutifully expressed its regrets and vowed to tighten up its procedures going forward and police said they had a suspect in custody.

Now a second Bay Area Airbnb member, Troy Dayton, is telling a similar story, claiming his Oakland apartment was rented three months ago by a drug addict who trashed the place and left it littered with meth pipes, Techcrunch reports.

The latest account calls into question Airbnb's initial claims that EJ's experience was the first it knew of – "our first major incident in over 2 million nights" as the company put it.

Perhaps none of this would be worth the buzz it has generated except that Airbnb is one of the current hot items in the online business. The company raised $112 million recently on an estimated valuation of $1.3 billion – not bad for what amounts to a classified-ad site.

Hoping to rescue its reputation, and valuation, Airbnb now says it will provide $50,000 worth of protection to Airbnb hosts. The company also says it will beef up its user verification profile process and integrate profiles with social sites, allowing hosts to view potential guests prior to agreeing to rent to them.