Editor's Note: This protest speaks to the need for relocalization in conjunction with economic democracy, as well as a scaling down of the materialistic lifestyle encouraged by Western culture. I knew years ago that Mondragon was creating high tech exports to partially support their cooperative project (many people wondered how did they do it and why haven't we been able to?). This raised a red flag as most high tech is environmentally unsustainable, as is the environmental burden of transporting exports and related packaging. Most high tech goods are produced in sweatshops to be competitive on the global market. Sometimes despite good intentions, the distancing of the supply chain leads easily to environmental, economic, and social abuses. It become much easier to both hide these practices and to emotionally and socially distance one's self from the effects. Hence all the problems with tracking sweatshop and green goods. A truly sustainable economy would be focused on local/regional productions, with minimal production of necessary specialized goods by the global fair trade market. In the meantime, these workers need fair wages. In the long term, they should be building their own regionally produced, democratically controlled, sustainable, cooperative economy. Nothing else will substitute.
FagorMastercook Protest
ZSP Admin, pon., 07/21/2008 - 20:10
Fagor's not a Workplace but a Workcamp: Mondragon Capitalists F#$% Workers in Poland. Strike is Imminent
Fagor is a large appliance manufacturer owned by the Mondragon "Cooperative" capitalist enterprise. In Poland it cooperatives FagorMastercook in Wroclaw. Currently there are serious labour problems in FagorMastercook. Members of the Wrocław group of Union of Syndicalists (ZSP) went Friday to a protest in front of the factory.
The place has become quite militarized. On Friday the firm had over 200 armed security guards from the notorious firm Impel there to protect the factory. The place was surrounded by metal barricades and each worker going in was throughly searched. Some employees say that there is often heavy security and searches.
Despite the heavy security, or perhaps because of it, about hundreds of workers joined in the demonstration on Friday. About 300 people, workers and supporters, were there after the morning shift, and about 200 before the afternoon shift began. The demo was organized by the August 80 union which has been negotiating with the firm for many months to get people a pay raise.
The workers in FagorMastercook have noted many instances of people being fired for belonging to unions or even just agreeing with their postulates. At least 20 members of August 80 were fired.
In FagorMastercook there are a few unions: Solidarity, August 80 and OPZZ Metalworkers. Solidarity and August 80 are calling for pay raises. In June a warning strike took place. Over 90 percent of the workers went on strike. Then a wave of repressions started. Besides firing some unionists and others who supported them, they started to pick out people, have supervisors stand behind them on the line watching their every move, threatening to fire them if they got even a second behind production. This sort of intimidation was probably used to show people that if they tried to organize themselves, the company would find any small pretext to fire them.
On July 9, two members of August 80 were fired for "leaving their workstations". They had been collecting votes on a strike referendum.
Members of ZSP at the demonstration were told that people were threatened with dismissal for demanding pay raises. They also heard that the workers will probably vote to go on strike.
Production workers at FagorMastercook make around 1200 zloties (400 euros) a month. Minimum wage in Poland is currently 1126 zloties a month but this will be raised to 1276 next year. So workers at this highly profitable factory are making almost nothing. That's why one of the slogans of the workers is FagorMastercook: A Workcamp, not a Workplace.
At the end of 2006, the EBRD decided to give 17.5 million euro to FagorMastercook. This money was given as part of a restructuring project. FagorMastercook wants to increase production in Poland and achieve economies of scale while making Poland its production hub for Central Europe. The company moved production from Spain when it started new production of gas stoves in Poland about 5 years ago. The production of refrigerators also got moved to Poland. Over 80 percent of the production is meant for export. They increased turnover by about 29% last year.
FagorMastercook works in a Special Economic Zone and received subsidies from the Polish state; it received a direct subsidy of 3.5 million zloties for creating jobs, plus a CIT and corporate real estate tax exemption. So in addition to money from the EBRD, FagorMastercook got help from the Polish state of about 52 million zloties. That's equal to the EBRD's 17.5 million euros at the current exchange rate. This means that the EBRD and Polish state invested more in the FagorMastercook facilites in Wroclaw than Fagor.
Although Mondragon still pushes its "cooperative" worker-friendly image, publishing bullshit reports on how it is concerned about the effects on globalization on the local workforce, for example in Spain, Mondragón Cooperative Corporation (MCC) is a typical capitalist employer operating plants in low-wage countries like Poland, Egypt, Morocco, Mexico, Thailand and China. Employees in these countries are not co-op members. (Some employees in other countries, even in Spain are also non-members; as many as 1/3 of Mondragon workers are not cooperative members. Any cooperative can also apply to MCC to employ up to 40% non-cooperative workers.)
It pretends to be "one of the world's top 10 best employers" and pays completely shit wages here in Poland and is actively repressing unionists. This is even worse than having typical capitalism disguised as a cooperative; it's just typical exploitation of people from poorer countries by those in the richer ones.
ZSP is calling on people to send letters to Mondragon and to Fagor expressing their disgust with the appallingly low wages in Poland and with the recent incidents of repression and intimidation against protestors. We also ask people, if they meet anybody spreading naive reports about Mondragon, to point out what's going on.
Sample protest letter (please write your own version):
To:
José María Aldecoa
Mondragon Corporation Cooperative
Pº Jose Maria Arizmendiarrieta
Nº 5 20500 Mondragon
Guipuzcoa, Espana
Fax: +34 943- 796 632
Fax: 34 943-779-300
Fagor Electrodomésticos
Fax: 943 79 68 81
Fagor Mastercook
Fax: 48 22 639-8985
We are writing to support the demands of the workers at Fagor Mastercook in Wroclaw and to demand an immediate end to its repression of unionists.
Workers at Fagor Mastercook are demanding an pay raise of 1000 zloties since salaries there are barely above minimum wage and are well below the national average. Over 90% of the workforce participated in a warning strike in June. Afterwards, many union members and leaders were fired. Workers have complained that they have been harrassed and intimidated. Peaceful demonstrators were met by 200 armed security guards.
This type of exploitation is a disgrace. Enough of your hypocrisy !
We are looking forward to the workers' imminent strike and ultimate victory.
Signed
....
If you sent a protest, let us know. If you sent a different text, send copies to: info@zsp.net.pl
Monday, January 31, 2011
Wednesday, January 26, 2011
Unmarketing. Stop Marketing, Start Engaging.
Book Review by the New Economics for Humanity
1/26/2011
AWESOME BOOK!!! I seriously loved it. Scott speaks as if his way is the way, but I don't mind it, that's what works for him and it resonates with me. I too recommend what works for me.
One of the topics that have come to my mind when I think of the Financial Institution of the Future project is, what are economic transactions for?? Why do we want to measure them?? and, what is it about value that makes it so important. Recently, I have repeatedly heard phrases that have led me to conclude that economic transactions are all about social relationships.
Paolo Ricciardelli, from a Skype group that discusses complementary currencies, said that "The core idea is that relations of exchange between individuals are more valuable than the goods or services exchanged."
In another conversation with Helen Dew from Living Economies, she told me that "we know that good relationships mean good trade". A relevant for my local exchange group which is wondering about why we are becoming stagnant.
Well, the author of this book takes this conversation about good relationships to the world of business in a way that no mainstream businessman could do. Although he apparently also works as a consultant for old-age type of business, I see great potential for using his wisdom in evolutionary businesses. "Marketing happens every time you engage (or not) with your past, present and potential customers" he says. It is not about a department of your business that will put an expensive ad and hope that someone will call, which the author calls the 'push and pray' method. It is about engaging with your customers, it is about establishing human conversations. Furthermore, he doesn't get tired of saying that honesty, authenticity and transparency are key to success.
So, in a mainstream/old-age company, the employees normally do not care about their job, they do what they do 'to survive', 'to pay the bills'. The employer cares about his employees as long as they bring sales. There is no engagement between them, therefore, employees will never be part of the positive marketing process for that business. They will never tell their friends to visit the factory where they work because it is awesome and have great products for them, for example. What Scott seems to be telling me is that your employees need to be as passionate about their job, as you are about your company. You need to be passionate about what you do so that you can go out and talk to people about it.
How does passion comes about?? or how do you motivate your employees?? Engage with them, be honest, authentic and transparent so that they trust you. When they trust you, they will be honest, authentic and transparent to you, so you'll trust them. Then, every one will play a key role in the Unmarketing process.
I concluded that marketing is about imposing, unmarketing is about creating trust. Scott even talks about a social currency!! something like, every time you build and strengthen your relationships with potential costumers, that is to say, with anyone, you are crediting your social account with a social currency. Eventually, the time will come for you to use it!
With the Financial Institution of the Future project, I am struggling a bit because I have got people joining the team on the BetterMeans Platform, however, I haven't been able to engage with them in a conversation that would motivate us to actively participate. That is because the platform does not allow us to keep contact with each other through email. If I want to email them, I need to go to my personal email account and select the recipients one by one. Same would be for them, which is an issue since not everyone has everyone else's addresses. So before we can go out to talk about this project, we need to develop passion for it, we all have to own it, to feel we belong to it and it belongs to us. We need to love the project...but we need the tool to engage and have conversations. I'd like to ask to current and future contributors, how do you think we can overcome this if BetterMeans cannot solve this issue for our project, which they are aware of??
My abstraction of the book can be summarized in the next sentence: Conversations start the process of building trust, which creates and strengthens good relationships. These are essential in building community, which process engages the public and promotes good trade. Social cohesion is key to healthy and sustainable economic activity. I chose the fractal spiral to indicate that, to me, this is a never ending process, it is an iteration, it feeds itself and when you look at it closer, you find more of the same stuff..."to infinity and beyond"!!
1/26/2011
AWESOME BOOK!!! I seriously loved it. Scott speaks as if his way is the way, but I don't mind it, that's what works for him and it resonates with me. I too recommend what works for me.
One of the topics that have come to my mind when I think of the Financial Institution of the Future project is, what are economic transactions for?? Why do we want to measure them?? and, what is it about value that makes it so important. Recently, I have repeatedly heard phrases that have led me to conclude that economic transactions are all about social relationships.
Paolo Ricciardelli, from a Skype group that discusses complementary currencies, said that "The core idea is that relations of exchange between individuals are more valuable than the goods or services exchanged."
In another conversation with Helen Dew from Living Economies, she told me that "we know that good relationships mean good trade". A relevant for my local exchange group which is wondering about why we are becoming stagnant.
Well, the author of this book takes this conversation about good relationships to the world of business in a way that no mainstream businessman could do. Although he apparently also works as a consultant for old-age type of business, I see great potential for using his wisdom in evolutionary businesses. "Marketing happens every time you engage (or not) with your past, present and potential customers" he says. It is not about a department of your business that will put an expensive ad and hope that someone will call, which the author calls the 'push and pray' method. It is about engaging with your customers, it is about establishing human conversations. Furthermore, he doesn't get tired of saying that honesty, authenticity and transparency are key to success.
So, in a mainstream/old-age company, the employees normally do not care about their job, they do what they do 'to survive', 'to pay the bills'. The employer cares about his employees as long as they bring sales. There is no engagement between them, therefore, employees will never be part of the positive marketing process for that business. They will never tell their friends to visit the factory where they work because it is awesome and have great products for them, for example. What Scott seems to be telling me is that your employees need to be as passionate about their job, as you are about your company. You need to be passionate about what you do so that you can go out and talk to people about it.
How does passion comes about?? or how do you motivate your employees?? Engage with them, be honest, authentic and transparent so that they trust you. When they trust you, they will be honest, authentic and transparent to you, so you'll trust them. Then, every one will play a key role in the Unmarketing process.
I concluded that marketing is about imposing, unmarketing is about creating trust. Scott even talks about a social currency!! something like, every time you build and strengthen your relationships with potential costumers, that is to say, with anyone, you are crediting your social account with a social currency. Eventually, the time will come for you to use it!
With the Financial Institution of the Future project, I am struggling a bit because I have got people joining the team on the BetterMeans Platform, however, I haven't been able to engage with them in a conversation that would motivate us to actively participate. That is because the platform does not allow us to keep contact with each other through email. If I want to email them, I need to go to my personal email account and select the recipients one by one. Same would be for them, which is an issue since not everyone has everyone else's addresses. So before we can go out to talk about this project, we need to develop passion for it, we all have to own it, to feel we belong to it and it belongs to us. We need to love the project...but we need the tool to engage and have conversations. I'd like to ask to current and future contributors, how do you think we can overcome this if BetterMeans cannot solve this issue for our project, which they are aware of??
My abstraction of the book can be summarized in the next sentence: Conversations start the process of building trust, which creates and strengthens good relationships. These are essential in building community, which process engages the public and promotes good trade. Social cohesion is key to healthy and sustainable economic activity. I chose the fractal spiral to indicate that, to me, this is a never ending process, it is an iteration, it feeds itself and when you look at it closer, you find more of the same stuff..."to infinity and beyond"!!
Tuesday, January 25, 2011
St. Louis Timebank Brings MORE for All
Grace Hill is comprised of sister agencies, Grace Hill Neighborhood Health Centers, Inc. (GHNHC) and Grace Hill Settlement House (GHSH). Each is controlled by a separate governing body. Grace Hill Settlement House was founded in 1903 by the Episcopal Diocese to help immigrant families "settle into their new neighborhood" on the near north side of St. Louis. Now it serves neighborhoods throughout the City of St. Louis and St. Charles County with its MORE system.
The Grace Hill Settlement in St Louis is one of the pioneers of Co-Production using Time Dollars. Their Member-Organized Resource Exchange (MORE) now underpins community involvement in 11 neighborhood centers and four health centers. Their involvement in the Head Start program dates back to 2001 when they won the contract to deliver the program to half the city of St Louis, mainly because of their proven ability to involve hard-to-reach groups through MORE.
Since MORE was fully computerized in 1991, service activity by residents has generated over 670,000 Time Dollars which, calculated at minimum wage, would have an equivalent monetary value of $3.5 million.
MORE for all
The Member Organized Resource Exchange (MORE), a hallmark Grace Hill program, has become the organization’s most vital way of engaging neighbors in helping neighbors.
Shaped by community members who build their leadership skills on one of seven MORE Boards, the program can involve everyone – children and parents, youth and seniors. In MORE’s inventive “time dollar” system of barter-exchange, community members of any age can offer a service – whether babysitting or house painting – within their skill set. Hours of service not only help their neighbors, but translate into “dollars.” They can then use “time dollars” to exchange services with neighbors, purchase services at Grace Hill Neighborhood Health Centers, or buy everyday household items and larger purchases, such as major appliances and furniture, at MORE stores. The exchange builds self-confidence as community members see the value of their work converted into tangible assets.
MORE also operates the Neighborhood College, where community members can strengthen their skills in 40-hour certificate courses on subjects such as parenting education and financial literacy. Like everything about MORE, the curriculum changes when neighbors see a new need arise.
The Grace Hill Settlement in St Louis is one of the pioneers of Co-Production using Time Dollars. Their Member-Organized Resource Exchange (MORE) now underpins community involvement in 11 neighborhood centers and four health centers. Their involvement in the Head Start program dates back to 2001 when they won the contract to deliver the program to half the city of St Louis, mainly because of their proven ability to involve hard-to-reach groups through MORE.
Since MORE was fully computerized in 1991, service activity by residents has generated over 670,000 Time Dollars which, calculated at minimum wage, would have an equivalent monetary value of $3.5 million.
MORE for all
The Member Organized Resource Exchange (MORE), a hallmark Grace Hill program, has become the organization’s most vital way of engaging neighbors in helping neighbors.
Shaped by community members who build their leadership skills on one of seven MORE Boards, the program can involve everyone – children and parents, youth and seniors. In MORE’s inventive “time dollar” system of barter-exchange, community members of any age can offer a service – whether babysitting or house painting – within their skill set. Hours of service not only help their neighbors, but translate into “dollars.” They can then use “time dollars” to exchange services with neighbors, purchase services at Grace Hill Neighborhood Health Centers, or buy everyday household items and larger purchases, such as major appliances and furniture, at MORE stores. The exchange builds self-confidence as community members see the value of their work converted into tangible assets.
MORE also operates the Neighborhood College, where community members can strengthen their skills in 40-hour certificate courses on subjects such as parenting education and financial literacy. Like everything about MORE, the curriculum changes when neighbors see a new need arise.
Monday, January 24, 2011
Midwestern Utopian Dreams
From Shareable.net
by Mira Luna
1/20/2011
For the holidays, I flew to Lawrence, Kan. and St. Louis, Mo. to meet my partner’s friends and family. I was also being introduced to the area to get a feel for whether or not we might want to move there in a few years to build a community around a number activist projects like a timebank, a shared community space, and a bike kitchen.
It is often assumed that the west and east coasts are the geographic centers of cutting-edge social change and the Midwest lags far behind in consciousness, so my expectations were pretty low. But I left with hopeful utopian dreams. My experience there taught me not only that the consciousness is ripe in pockets of the Midwest, but also that the terrain may provide even more fertile ground for radical change.
In Lawrence, a couple of working class activists bought a commercial/residential building across the street from a large cohousing complex. The building will be green retrofitted into a community-run space called the Cosmic Beauty School, including healing services, sharing libraries, community events, sustainability classes, co-working spaces, and an alternative exchange system similar to the Share Exchange space in Santa Rosa, Calif. The Cosmic Beauty School hopes to provide a much-needed hub, gathering point, and resource center to catalyze other important social change projects that might otherwise have trouble getting off the ground.
While living in the nascent School for a few days, we learned about efficient fire wood stoves and the challenges of winter urban farming in a cold climate, as well as how to scavenge and chop firewood (an amazing art form with all the different kinds of wood), how to reuse water through a grey water system.
Next we visited St. Louis. Economically devastated and crime ridden, it seems particularly ripe for change. A neighborhood center in a low-income, African-American community has one of the best timebanks in the country called MORE (Member Organized Resource Exchange), with time dollar stores providing peer-to-peer mutual aid and self-help among the poor.
Nearby, a nonreligious group that calls itself Catholic Worker (after Dorothy Day’s work to address social and economic justice) has bought up nearly a whole block to provide free housing for low-income folks, with an adjacent urban farm, aquaponic system, and chicken coop. Many other buildings nearby are successfully squatted long-term by activists and low-income folks keeping the neighborhood safer. The Catholic Worker also bought a huge abandoned church for just $1.
BWorks, an umbrella organization in St. Louis, offers participatory (l)earn-a-bike, (l)earn-a-computer, and create-a-book literacy programs to low-income youth and is expanding to a larger location this coming year along with a community center called CAMP that incubates all kinds of activist projects and community services. On our way there, we stopped by the Black Bear, an anarchist café and community space.
St. Louis reminded me a lot of Detroit (another destitute Midwestern city), which I visited at last year’s U.S. Social Form. There, activists have been gaining access to large tracts of land for urban organic farming to feed the poor and revitalize the economy with healthful employment. Similarly, in Cleveland, sustainability-oriented worker cooperative development organizations are getting significant support for addressing high unemployment with more empowering green jobs.
Disillusioned by the economic downturn, the mainstream economy is being questioned by those hardest hit. The empty urban centers of St. Louis and Detroit create both physical and mental openings for opportunity. People are exploring new, local, sustainable livelihoods like urban farming, free collective housing, and worker cooperatives. The empty buildings and rock-bottom real estate prices allow radical projects that would normally struggle for extensive capital funding from outside sources like foundations to easily thrive on grassroots community volunteering and donations.
I have utopian dreams of making more projects like these happen in the San Francisco Bay Area, but there are significant roadblocks due the cost of implementation here. Buying a building is pretty much out of the question in San Francisco, which means my friends and I must continually put lots of effort into fundraising or working primary, full-time jobs just to pay for rent rather than focusing on the work of change itself. My energy gets siphoned off into the mainstream economic system or trying to find funding in a haystack of other nonprofits.
Another challenge is that, unlike many urban areas in the Midwest, San Francisco has yet to see the ubiquitous face of desperation that often catalyzes consciousness for real, deep change, while the saturation of the nonprofit industrial complex reinforces the status quo by putting band aids on the situation.
Activists in Lawrence noted Midwest brain drain -- many comrades leave there to find the holy grail of social change in the West. Maybe it’s time to switch directions and start cultivating the fecund fields of the Midwest. Breaking free of our economic chains is a great first step down the path to utopia.
by Mira Luna
1/20/2011
For the holidays, I flew to Lawrence, Kan. and St. Louis, Mo. to meet my partner’s friends and family. I was also being introduced to the area to get a feel for whether or not we might want to move there in a few years to build a community around a number activist projects like a timebank, a shared community space, and a bike kitchen.
It is often assumed that the west and east coasts are the geographic centers of cutting-edge social change and the Midwest lags far behind in consciousness, so my expectations were pretty low. But I left with hopeful utopian dreams. My experience there taught me not only that the consciousness is ripe in pockets of the Midwest, but also that the terrain may provide even more fertile ground for radical change.
In Lawrence, a couple of working class activists bought a commercial/residential building across the street from a large cohousing complex. The building will be green retrofitted into a community-run space called the Cosmic Beauty School, including healing services, sharing libraries, community events, sustainability classes, co-working spaces, and an alternative exchange system similar to the Share Exchange space in Santa Rosa, Calif. The Cosmic Beauty School hopes to provide a much-needed hub, gathering point, and resource center to catalyze other important social change projects that might otherwise have trouble getting off the ground.
While living in the nascent School for a few days, we learned about efficient fire wood stoves and the challenges of winter urban farming in a cold climate, as well as how to scavenge and chop firewood (an amazing art form with all the different kinds of wood), how to reuse water through a grey water system.
Next we visited St. Louis. Economically devastated and crime ridden, it seems particularly ripe for change. A neighborhood center in a low-income, African-American community has one of the best timebanks in the country called MORE (Member Organized Resource Exchange), with time dollar stores providing peer-to-peer mutual aid and self-help among the poor.
Nearby, a nonreligious group that calls itself Catholic Worker (after Dorothy Day’s work to address social and economic justice) has bought up nearly a whole block to provide free housing for low-income folks, with an adjacent urban farm, aquaponic system, and chicken coop. Many other buildings nearby are successfully squatted long-term by activists and low-income folks keeping the neighborhood safer. The Catholic Worker also bought a huge abandoned church for just $1.
BWorks, an umbrella organization in St. Louis, offers participatory (l)earn-a-bike, (l)earn-a-computer, and create-a-book literacy programs to low-income youth and is expanding to a larger location this coming year along with a community center called CAMP that incubates all kinds of activist projects and community services. On our way there, we stopped by the Black Bear, an anarchist café and community space.
St. Louis reminded me a lot of Detroit (another destitute Midwestern city), which I visited at last year’s U.S. Social Form. There, activists have been gaining access to large tracts of land for urban organic farming to feed the poor and revitalize the economy with healthful employment. Similarly, in Cleveland, sustainability-oriented worker cooperative development organizations are getting significant support for addressing high unemployment with more empowering green jobs.
Disillusioned by the economic downturn, the mainstream economy is being questioned by those hardest hit. The empty urban centers of St. Louis and Detroit create both physical and mental openings for opportunity. People are exploring new, local, sustainable livelihoods like urban farming, free collective housing, and worker cooperatives. The empty buildings and rock-bottom real estate prices allow radical projects that would normally struggle for extensive capital funding from outside sources like foundations to easily thrive on grassroots community volunteering and donations.
I have utopian dreams of making more projects like these happen in the San Francisco Bay Area, but there are significant roadblocks due the cost of implementation here. Buying a building is pretty much out of the question in San Francisco, which means my friends and I must continually put lots of effort into fundraising or working primary, full-time jobs just to pay for rent rather than focusing on the work of change itself. My energy gets siphoned off into the mainstream economic system or trying to find funding in a haystack of other nonprofits.
Another challenge is that, unlike many urban areas in the Midwest, San Francisco has yet to see the ubiquitous face of desperation that often catalyzes consciousness for real, deep change, while the saturation of the nonprofit industrial complex reinforces the status quo by putting band aids on the situation.
Activists in Lawrence noted Midwest brain drain -- many comrades leave there to find the holy grail of social change in the West. Maybe it’s time to switch directions and start cultivating the fecund fields of the Midwest. Breaking free of our economic chains is a great first step down the path to utopia.
Saturday, January 22, 2011
The Illusion of Money
Real wealth or phantom assets? David Korten explores the difference between the kind of wealth that makes life better and the phantom wealth created by financial speculation.
by David Korten
Yes! Magazine
posted Jan 18, 2011
This is the third of a series of blogs based on excerpts adapted from the 2nd edition of Agenda for a New Economy: From Phantom Wealth to Real Wealth. I wrote Agenda to spur a national conversation on economic policy issues and options that are otherwise largely ignored. This blog series is intended to contribute to that conversation. —DK
People often fail to recognize the difference between phantom financial assets and real, living wealth.
In business school, we were taught to assess investment options to maximize financial return. I don’t recall that the professor ever mentioned that this meant maximizing returns to people who have money—to make rich people richer. Or that money is a system of power and that the more our lives depend on money, the greater our subservience to those who control the creation and allocation of money.
Nor do I recall asking my professors, “What is money?” “Why do we assume that maximizing financial return maximizes the creation of real value?” “How does the conversion of natural living wealth to financial wealth create real value?” “What about the many fortunes built through financial speculation, fraud, government subsidies, the sale of harmful products, and the abuse of monopoly power?” I may have had some doubts, but kept them to myself for fear of being dismissed as hopelessly stupid.
The market makes no distinction between the dollars acquired through means that enrich society, those created by means that impoverish society, and those simply created out of thin air.
Perhaps those who taught us economics, finance, and accounting did not themselves recognize the difference between real living wealth and phantom financial wealth.
Real wealth has intrinsic value. Examples include fertile land, healthful food, knowledge, productive labor, pure water and clean air, labor, and physical infrastructure. The most important forms of real wealth are beyond price and are unavailable for market purchase. These include healthy, happy children, loving families, caring communities, a beautiful, healthy, natural environment.
Real wealth also includes all the many things of intrinsic artistic, spiritual, or utilitarian value essential to maintaining the various forms of living wealth. These may or may not have a market price. They include healthful food, fertile land, pure water, clean air, caring relationships and loving parents, education, health care, fulfilling opportunities for service, and time for meditation and spiritual reflection.
Money, a number on a piece of paper or created with an accounting enter, has no intrinsic value. Wall Street generates it in astonishing quantities through accounting tricks, financial bubbles, and debt pyramids. It appears from nowhere and can disappear in an instant, as a phantom in the night.
Those engaged in creating phantom wealth collect handsome “performance” fees for their services and walk away with their gains. When the bubble bursts, borrowers default on debts they cannot pay and the bubbles and debt pyramid collapse in a cascade of bankruptcies.
What is Real Wealth?
John Robbins: We've been measuring happiness in all the wrong ways. How can we find true quality of life?
It is easy to confuse phantom financial assets with the real wealth for which they can be exchanged. Indeed, the illusions of phantom wealth are so convincing that most Wall Street players believe they are creating real wealth.
The market, of course, makes no distinction between the dollars acquired through means that enrich society, those created by means that impoverish society, and those simply created out of thin air. Money is money, and the more you have, the more the market eagerly responds to your every whim. It is still only a number with no existence outside the human mind.
It is easy to confuse phantom financial assets with the real wealth for which they can be exchanged.
Those who benefit from the creation of phantom wealth may never realize that their gain is unfairly diluting everyone else’s claim to the available stock of real wealth. They may also fail to realize that Wall Street and its international counterparts have generated total phantom-wealth claims far in excess of the value of all the world’s real wealth, thus creating expectations of future security and comforts that can never be fulfilled.
The deceptions are built right into our language. We refer to speculation as “investment” and to phantom financial wealth as “capital.” Indeed, when we hear the terms wealth, capital, assets, or resources we have no way to know whether the reference is to a real asset or only to a phantom financial asset. Our language gives us no way to make this essential distinction. It is no wonder we get confused and fail to recognize that Wall Street produces nothing of real value.
David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine and co-chair of the New Economy Working Group. This Agenda for a New Economy blog series is co-sponsored by CSRwire.com and YesMagazine.org based on excerpts from Agenda for a New Economy, 2nd edition.
by David Korten
Yes! Magazine
posted Jan 18, 2011
This is the third of a series of blogs based on excerpts adapted from the 2nd edition of Agenda for a New Economy: From Phantom Wealth to Real Wealth. I wrote Agenda to spur a national conversation on economic policy issues and options that are otherwise largely ignored. This blog series is intended to contribute to that conversation. —DK
People often fail to recognize the difference between phantom financial assets and real, living wealth.
In business school, we were taught to assess investment options to maximize financial return. I don’t recall that the professor ever mentioned that this meant maximizing returns to people who have money—to make rich people richer. Or that money is a system of power and that the more our lives depend on money, the greater our subservience to those who control the creation and allocation of money.
Nor do I recall asking my professors, “What is money?” “Why do we assume that maximizing financial return maximizes the creation of real value?” “How does the conversion of natural living wealth to financial wealth create real value?” “What about the many fortunes built through financial speculation, fraud, government subsidies, the sale of harmful products, and the abuse of monopoly power?” I may have had some doubts, but kept them to myself for fear of being dismissed as hopelessly stupid.
The market makes no distinction between the dollars acquired through means that enrich society, those created by means that impoverish society, and those simply created out of thin air.
Perhaps those who taught us economics, finance, and accounting did not themselves recognize the difference between real living wealth and phantom financial wealth.
Real wealth has intrinsic value. Examples include fertile land, healthful food, knowledge, productive labor, pure water and clean air, labor, and physical infrastructure. The most important forms of real wealth are beyond price and are unavailable for market purchase. These include healthy, happy children, loving families, caring communities, a beautiful, healthy, natural environment.
Real wealth also includes all the many things of intrinsic artistic, spiritual, or utilitarian value essential to maintaining the various forms of living wealth. These may or may not have a market price. They include healthful food, fertile land, pure water, clean air, caring relationships and loving parents, education, health care, fulfilling opportunities for service, and time for meditation and spiritual reflection.
Money, a number on a piece of paper or created with an accounting enter, has no intrinsic value. Wall Street generates it in astonishing quantities through accounting tricks, financial bubbles, and debt pyramids. It appears from nowhere and can disappear in an instant, as a phantom in the night.
Those engaged in creating phantom wealth collect handsome “performance” fees for their services and walk away with their gains. When the bubble bursts, borrowers default on debts they cannot pay and the bubbles and debt pyramid collapse in a cascade of bankruptcies.
What is Real Wealth?
John Robbins: We've been measuring happiness in all the wrong ways. How can we find true quality of life?
It is easy to confuse phantom financial assets with the real wealth for which they can be exchanged. Indeed, the illusions of phantom wealth are so convincing that most Wall Street players believe they are creating real wealth.
The market, of course, makes no distinction between the dollars acquired through means that enrich society, those created by means that impoverish society, and those simply created out of thin air. Money is money, and the more you have, the more the market eagerly responds to your every whim. It is still only a number with no existence outside the human mind.
It is easy to confuse phantom financial assets with the real wealth for which they can be exchanged.
Those who benefit from the creation of phantom wealth may never realize that their gain is unfairly diluting everyone else’s claim to the available stock of real wealth. They may also fail to realize that Wall Street and its international counterparts have generated total phantom-wealth claims far in excess of the value of all the world’s real wealth, thus creating expectations of future security and comforts that can never be fulfilled.
The deceptions are built right into our language. We refer to speculation as “investment” and to phantom financial wealth as “capital.” Indeed, when we hear the terms wealth, capital, assets, or resources we have no way to know whether the reference is to a real asset or only to a phantom financial asset. Our language gives us no way to make this essential distinction. It is no wonder we get confused and fail to recognize that Wall Street produces nothing of real value.
David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine and co-chair of the New Economy Working Group. This Agenda for a New Economy blog series is co-sponsored by CSRwire.com and YesMagazine.org based on excerpts from Agenda for a New Economy, 2nd edition.
Friday, January 21, 2011
New BALLE Series: ACCELERATING COMMUNITY CAPITAL
From Business Alliance for Local Living Economies
• Connect local businesses with local lenders, investors and donors.
• Earn a "living rate of return" while supporting the local economy.
• Create jobs by strengthening family farms, local manufacturing,
and independent business.
Monthly Webinars: Every first Tuesday, launching Feb 1, 10:00am PST/1:00pm EST
Full-day Intensive: June 14, Bellingham, Washington (opening day of the BALLE Business Conference)
First webinar on February 1st free!
Webinar Topic: Introduction to Community Capital Strategies and Solutions with Michael Shuman, BALLE Research & Economic Development Director and Don Shaffer, President & CEO of RSF Social Finance.
Following webinars will be free to BALLE network leaders, and at a discounted rate for BALLE network business members, RSF and Investors Circle investors, and members of either Slow Money or AEO.
Series Overview: As investors worldwide assess the damage from the most recent financial meltdown, a growing number are considering—for the first time ever—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 and create millions of new jobs. What are the most promising new innovations 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, which will run all year and include an all-day workshop before the BALLE Annual Business Conference in June, 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. It will explore how communities can better tap capital through New Markets Tax Credits, CDFIs, and various tax incentives. This series is aimed at community investors, instigators, organizers, foundations, innovative bankers, businesses looking for capital, and anyone else committed to unleashing local money to build local living economies.
• Connect local businesses with local lenders, investors and donors.
• Earn a "living rate of return" while supporting the local economy.
• Create jobs by strengthening family farms, local manufacturing,
and independent business.
Monthly Webinars: Every first Tuesday, launching Feb 1, 10:00am PST/1:00pm EST
Full-day Intensive: June 14, Bellingham, Washington (opening day of the BALLE Business Conference)
First webinar on February 1st free!
Webinar Topic: Introduction to Community Capital Strategies and Solutions with Michael Shuman, BALLE Research & Economic Development Director and Don Shaffer, President & CEO of RSF Social Finance.
Following webinars will be free to BALLE network leaders, and at a discounted rate for BALLE network business members, RSF and Investors Circle investors, and members of either Slow Money or AEO.
Series Overview: As investors worldwide assess the damage from the most recent financial meltdown, a growing number are considering—for the first time ever—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 and create millions of new jobs. What are the most promising new innovations 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, which will run all year and include an all-day workshop before the BALLE Annual Business Conference in June, 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. It will explore how communities can better tap capital through New Markets Tax Credits, CDFIs, and various tax incentives. This series is aimed at community investors, instigators, organizers, foundations, innovative bankers, businesses looking for capital, and anyone else committed to unleashing local money to build local living economies.
Wednesday, January 19, 2011
Small town launches its own stimulus: a local currency
Two residents of North Fork, a former lumber town near Yosemite, developed a scrip to encourage residents to shop locally. It's catching on slowly because most businesses still want to be paid in old-fashioned greenbacks.
January 15, 2011
By Alana Semuels
Los Angeles Times
Reporting from North Fork, Calif. — Located almost in the dead center of California, North Fork is like a lot of other rural outposts: It's losing businesses and hopes for a turnaround.
But there's nothing typical about the town's biggest booster, Josh Freeman. His efforts to resuscitate this tiny town include launching a local currency emblazoned with butterflies and hummingbirds in a bid to keep wealth in the community.
Freeman grew up in Pacific Palisades and drives a car powered by vegetable oil. Until a few months ago he wore dreadlocks down his back. To make a living, he repairs computers and develops websites. And he has an unshakeable belief that small-town life is not only worth reviving, but also essential to preserve.
"Wall Street is making more money than it's ever made, and Main Street is evaporating," said Freeman, sitting in his studio, which also serves as the town's yoga studio, karate classroom and concert hall. "That's unsustainable."
Nestled in the foothills of the Sierra Nevada near Yosemite National Park, North Fork is one of scores of struggling towns across the United States. Many rural areas in eastern California and western Nevada shed residents between 2005 and 2009, according to recent census data. The rural California county of Inyo, for example, lost 2.8% of its population from 2000 to 2009. The U.S. population grew by nearly 10% over the same period.
A former lumber town, tiny North Fork is on a two-lane road dotted with rustic barns in long-suffering Madera County, where the unemployment rate in November was 15.7%. Businesses in the town of about 2,400 are finding it harder to keep their doors open.
"We're all kind of hanging on by our fingernails," said Bob McKee, who has run the town's hardware store for 21 years.
In the last two years on Main Street, an insurance company, a beauty salon and a boutique closed, leaving behind empty storefronts, he said. Even McKee's store is in trouble. Many of the town's residents, who commute to jobs in Fresno, find it easier and cheaper to shop in the Central Valley.
"Everyone comes here and then they realize there's no economy," said Johnnie Rae Ruiz, a wedding singer who has lived in North Fork for eight years but is contemplating a move to Los Angeles or Fresno. He isn't making enough money in town to make ends meet.
Freeman moved to North Fork from San Francisco with his wife and daughter in 1991. He wanted to be closer to a nearby meditation center, where he has spent up to 10 days in complete silence. That would seem an unlikely state for the 45-year-old, whose answers to questions sometimes resemble a pool ball bouncing off many rails before finding the mark.
Freeman's efforts to jump-start the town's economy run the gamut from cultural to financial. He founded a weekly coffeehouse held in a studio where residents gather to play musical instruments, read poetry and listen to an eight-piece ska band Freeman put together by recruiting residents. He's trying to organize a living chess match using townspeople dressed up as pieces, and play one another. He and other residents formed a group that gets together every weekend to perform chores for their neighbors, similar to an Amish barn-raising.
His efforts at community building are evident when he sits down at a local Mexican restaurant and is greeted warmly by two groups having lunch on the patio.
"When the [stuff] hits the fan, what do people choose to do?" Freeman said. "We can shoot each other from gated communities, or we can work together."
Perhaps the biggest of Freeman's projects is North Fork Shares, the local currency he created last year with resident Dan Rosenberg, also 45. The pair developed the scrip — which is worth $12 per share — to encourage residents to spend their money in North Fork. If someone needs help fixing their car, for example, they pay a local in North Fork Shares, rather than driving elsewhere for repairs. That money will then be spent on another local service — on homemade food, say, or gardening supplies.
Freeman describes the currency as a type of bartering service. One share is worth roughly one hour of labor, so if someone mows a lawn for an hour, for example, they can get paid a full share. People can also obtain the bills by buying them or by attending meetings about the shares, where they're sold at a discount.
The money spent on the shares helped defray the cost of the ink and paper used to print them. Leftover money — a few hundred dollars — now sits in a group bank account. Those involved in the project are discussing what to do with it. They are considering issuing loans, throwing a party or creating a scholarship.
"We all believe that the way to strengthen our community is to strengthen the economy in our local community," said Rosenberg, who was a congressional candidate in 2000, winning the Democratic primary but eventually losing to his Republican opponent.
A local artist designed the three paper bills that make up the North Fork currency, which are slightly smoother and smaller than U.S. bills. The so-called quarter-share, worth $3, features a Mariposa lily and an insect and green ink. The $6 half-share, with words in red ink, depicts a hummingbird and a compass. The full share, which has blue printing, features a picture of a woven basket.
A group of residents hand-printed about 1,400 bills in an abandoned garage on Rosenberg's property, a process that took about 900 hours. They're made of a special waterproof, synthetic paper called yupo.
Currency collectors from overseas have contacted Freeman about buying some. But he wants it to circulate.
"The only way you can spend it is to interact with others in town," he said. "It's never going to end up in a corporate headquarters."
North Fork isn't the first community to launch its own currency. Probably the most successful is Ithaca, in upstate New York, which launched a local scrip in 1991. About $100,000 worth of Ithaca currency is now in circulation; it's accepted by public transit and a number of local businesses.
Most efforts have failed, however, including Freeman's initial push in North Fork. He first attempted a local currency in 1998 but abandoned the project to work on Rosenberg's congressional campaign.
His latest experiment has been slow going. Only about 100 shares are circulating, mostly between individuals. Freeman has used the shares to pay a friend who helped pull his car out of the mud. A local family farm accepts it, as does an auto repair shop, a dentist, and a resident known for making bread. But most businesses in town are still looking for old-fashioned greenbacks.
Some residents don't know about the shares — although Freeman is quick to educate them. Even those familiar with the experiment are skeptical, though.
"It's going to take a long time," said John Telenos, an unemployed pump technician hanging out in a North Fork gas station.
Freeman said he won't be disappointed if the new currency flops. The point of starting North Fork Shares, he said, was to create one more excuse to bring the community closer.
"It's about getting people connected to each other in ways they weren't before," he said
Freeman already seems to accomplish those connections as he wanders around the sloped streets of North Fork, where he can barely make it a block without being stopped by residents who want to rub his newly shorn head and talk about the weather. He encourages them to stop by his coffeehouse and get more involved in town events, sometimes not even mentioning the currency.
"In a small town, you tend to look out for each other," he said. "With the changes in economy, the more we support each other in positive ways, the better the quality of life is for everyone."
alana.semuels@latimes.com
January 15, 2011
By Alana Semuels
Los Angeles Times
Reporting from North Fork, Calif. — Located almost in the dead center of California, North Fork is like a lot of other rural outposts: It's losing businesses and hopes for a turnaround.
But there's nothing typical about the town's biggest booster, Josh Freeman. His efforts to resuscitate this tiny town include launching a local currency emblazoned with butterflies and hummingbirds in a bid to keep wealth in the community.
Freeman grew up in Pacific Palisades and drives a car powered by vegetable oil. Until a few months ago he wore dreadlocks down his back. To make a living, he repairs computers and develops websites. And he has an unshakeable belief that small-town life is not only worth reviving, but also essential to preserve.
"Wall Street is making more money than it's ever made, and Main Street is evaporating," said Freeman, sitting in his studio, which also serves as the town's yoga studio, karate classroom and concert hall. "That's unsustainable."
Nestled in the foothills of the Sierra Nevada near Yosemite National Park, North Fork is one of scores of struggling towns across the United States. Many rural areas in eastern California and western Nevada shed residents between 2005 and 2009, according to recent census data. The rural California county of Inyo, for example, lost 2.8% of its population from 2000 to 2009. The U.S. population grew by nearly 10% over the same period.
A former lumber town, tiny North Fork is on a two-lane road dotted with rustic barns in long-suffering Madera County, where the unemployment rate in November was 15.7%. Businesses in the town of about 2,400 are finding it harder to keep their doors open.
"We're all kind of hanging on by our fingernails," said Bob McKee, who has run the town's hardware store for 21 years.
In the last two years on Main Street, an insurance company, a beauty salon and a boutique closed, leaving behind empty storefronts, he said. Even McKee's store is in trouble. Many of the town's residents, who commute to jobs in Fresno, find it easier and cheaper to shop in the Central Valley.
"Everyone comes here and then they realize there's no economy," said Johnnie Rae Ruiz, a wedding singer who has lived in North Fork for eight years but is contemplating a move to Los Angeles or Fresno. He isn't making enough money in town to make ends meet.
Freeman moved to North Fork from San Francisco with his wife and daughter in 1991. He wanted to be closer to a nearby meditation center, where he has spent up to 10 days in complete silence. That would seem an unlikely state for the 45-year-old, whose answers to questions sometimes resemble a pool ball bouncing off many rails before finding the mark.
Freeman's efforts to jump-start the town's economy run the gamut from cultural to financial. He founded a weekly coffeehouse held in a studio where residents gather to play musical instruments, read poetry and listen to an eight-piece ska band Freeman put together by recruiting residents. He's trying to organize a living chess match using townspeople dressed up as pieces, and play one another. He and other residents formed a group that gets together every weekend to perform chores for their neighbors, similar to an Amish barn-raising.
His efforts at community building are evident when he sits down at a local Mexican restaurant and is greeted warmly by two groups having lunch on the patio.
"When the [stuff] hits the fan, what do people choose to do?" Freeman said. "We can shoot each other from gated communities, or we can work together."
Perhaps the biggest of Freeman's projects is North Fork Shares, the local currency he created last year with resident Dan Rosenberg, also 45. The pair developed the scrip — which is worth $12 per share — to encourage residents to spend their money in North Fork. If someone needs help fixing their car, for example, they pay a local in North Fork Shares, rather than driving elsewhere for repairs. That money will then be spent on another local service — on homemade food, say, or gardening supplies.
Freeman describes the currency as a type of bartering service. One share is worth roughly one hour of labor, so if someone mows a lawn for an hour, for example, they can get paid a full share. People can also obtain the bills by buying them or by attending meetings about the shares, where they're sold at a discount.
The money spent on the shares helped defray the cost of the ink and paper used to print them. Leftover money — a few hundred dollars — now sits in a group bank account. Those involved in the project are discussing what to do with it. They are considering issuing loans, throwing a party or creating a scholarship.
"We all believe that the way to strengthen our community is to strengthen the economy in our local community," said Rosenberg, who was a congressional candidate in 2000, winning the Democratic primary but eventually losing to his Republican opponent.
A local artist designed the three paper bills that make up the North Fork currency, which are slightly smoother and smaller than U.S. bills. The so-called quarter-share, worth $3, features a Mariposa lily and an insect and green ink. The $6 half-share, with words in red ink, depicts a hummingbird and a compass. The full share, which has blue printing, features a picture of a woven basket.
A group of residents hand-printed about 1,400 bills in an abandoned garage on Rosenberg's property, a process that took about 900 hours. They're made of a special waterproof, synthetic paper called yupo.
Currency collectors from overseas have contacted Freeman about buying some. But he wants it to circulate.
"The only way you can spend it is to interact with others in town," he said. "It's never going to end up in a corporate headquarters."
North Fork isn't the first community to launch its own currency. Probably the most successful is Ithaca, in upstate New York, which launched a local scrip in 1991. About $100,000 worth of Ithaca currency is now in circulation; it's accepted by public transit and a number of local businesses.
Most efforts have failed, however, including Freeman's initial push in North Fork. He first attempted a local currency in 1998 but abandoned the project to work on Rosenberg's congressional campaign.
His latest experiment has been slow going. Only about 100 shares are circulating, mostly between individuals. Freeman has used the shares to pay a friend who helped pull his car out of the mud. A local family farm accepts it, as does an auto repair shop, a dentist, and a resident known for making bread. But most businesses in town are still looking for old-fashioned greenbacks.
Some residents don't know about the shares — although Freeman is quick to educate them. Even those familiar with the experiment are skeptical, though.
"It's going to take a long time," said John Telenos, an unemployed pump technician hanging out in a North Fork gas station.
Freeman said he won't be disappointed if the new currency flops. The point of starting North Fork Shares, he said, was to create one more excuse to bring the community closer.
"It's about getting people connected to each other in ways they weren't before," he said
Freeman already seems to accomplish those connections as he wanders around the sloped streets of North Fork, where he can barely make it a block without being stopped by residents who want to rub his newly shorn head and talk about the weather. He encourages them to stop by his coffeehouse and get more involved in town events, sometimes not even mentioning the currency.
"In a small town, you tend to look out for each other," he said. "With the changes in economy, the more we support each other in positive ways, the better the quality of life is for everyone."
alana.semuels@latimes.com
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