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Investing in the Future with SlowMoney

Monday, May 24, 2010, 2:16 PM

I have been slow to throw my hat into the ring with organizations dedicated to bringing intelligent responses to our predicament. The reason is that I have a list of requirements that have to be met:

  • The proposed actions have to address the real challenges that we face.
  • The organization has to be strictly non-partisan and neutral or silent on a wide range of belief-centered positions.

I know that doesn't seem like a very long list of requirements, but it turns out that it eliminates an enormous number of organizations and individuals from consideration as affiliate partners.

On the first requirement, there are a lot of efforts out there that are either in denial about the actual predicament in which we find ourselves or are approaching solutions in a socially-cautious, status-quo fashion.  Their incremental efforts run a very high risk of being in the category of 'too little, too late,' and are therefore largely ineffective, even if energetic and well-meaning.  Even if I am glad they exist and wish them well, I simply have a hard time getting excited by efforts that, in my opinion, are badly overmatched by the pace and scope of the changes that are coming.

On the second requirement, it is my very strongest conviction that we are all in this together, that everyone has something to offer or contribute, and that we cannot afford to try and tackle the future as a splintered series of fractious mobs.  While many groups do fine work from within the confines of their partisan or otherwise exclusionary framework, I cannot afford to align with any of them, because doing so may limit my ability to reach as many people as I can.  It would be a shame for someone to ignore the Crash Course because it was seen as being authored by someone who "supports those people."  When you get right down to it, the challenges we face transcend any and all social boundaries.  Or at least they should.

I want to tell you about Slow Money, a new non-profit organization and movement that more than meets my stringent requirements (both of them), is seeking a non-status-quo solution, and promises to do great things in the arena of local food production; an area of very strong interest on my part.  One of their prime goals is to get 1,000,000 individuals to commit to investing 1% of their money into local food opportunities within 50 miles of their homes.  Awesome.

I have donated free advertising to Slow Money on this website, which non-members will see (members do not see any advertising at all), and I will be speaking at their upcoming national gathering at 10:30 a.m. on Thursday June 10th at the gorgeous Shelburne Farms facility in VT, which you can find out more about by clicking this link.

The Slow Money Principles, which I have signed (and you can sign here):

In order to enhance food security, food safety and food access; improve nutrition and health; promote cultural, ecological and economic diversity; and accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration, we do hereby affirm the following Principles:

  1. We must bring money back down to earth.
  2. There is such a thing as money that is too fast, companies that are too big, finance that is too complex. Therefore, we must slow our money down -- not all of it, of course, but enough to matter.
  3. The 20th Century was the era of Buy Low/Sell High and Wealth Now/Philanthropy Later—what one venture capitalist called “the largest legal accumulation of wealth in history.” The 21st Century will be the era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place and non-violence.
  4. We must learn to invest as if food, farms and fertility mattered. We must connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises.
  5. Let us celebrate the new generation of entrepreneurs, consumers and investors who are showing the way from Making A Killing to Making a Living.
  6. Paul Newman said, "I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out." Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:
  • What would the world be like if we invested 50% of our assets within 50 miles of where we live?
  • What if there were a new generation of companies that gave away 50% of their profits?
  • What if there were 50% more organic matter in our soil 50 years from now?

Any organization that is serious about food production but does not specifically address soil building and fertility does not truly appreciate the situation.  SlowMoney gets it, and that's one of the prime reasons I am so interested in helping out this nascent but fast-growing organization.

Our food system needs fixing, for reasons ranging from the fact that Peak Oil is real, to the idea that big agri-farming is unsustainable, to the reality that it is delivering food that is often nutritionally substandard and sometimes downright frightening.

I've spent a few hours on the phone with both the founder and director, and they are committed, connected, and bring impressive credentials and past accomplishments to the table.  I look forward to meeting them in person and spending more time figuring out who they are and how I can help.

If you are interested in attending the national gathering, I would love to see you there.  They've got a smashing good line-up of speakers and I am quite sure that it will be an enormously invigorating experience.

At any rate, I wanted to explain why the Slow Money ads have been appearing on the site, describe my connection to them, and explain why I've decided to openly support their cause.  It's a good one and is being done the right way. 

Consider my hat tossed. 

P.S.  If you attend the gathering in June, be sure to introduce yourself to me.

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46 Comments

cmartenson's picture
cmartenson
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Re: Investing in the future with SlowMoney

...now with comments enabled....

SagerXX's picture
SagerXX
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Re: Investing in the future with SlowMoney

Nice!  Congratulations on your first be-ringed hat!

(and now -- off to subscribe to the Slow Money Principles...)

JAG's picture
JAG
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Re: Investing in the future with SlowMoney

Hey Doc, I looked into this about 6 months ago, but the details remain unclear to me. Any chance you could elaborate on the details? Are they looking for investments in the organization, or just locally. I understand and agree with their agenda, but I don't understand its application.

Thanks in advanced...Jeff

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katyan
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Re: Investing in the future with SlowMoney

The Slow Money initiative is still very new, and appears to have evolved almost accidentally. I participated in a small group discussion last week with Woody Tasch, who wrote the book "Slow Money". He seems rather surprised by the response and is working to develop an organization to support the ground swell that has emerged. My sense is that the focus will be on fostering the local groups that are emerging. However, he did mention that when membership reaches a critical mass, there will be opportunities to influence policy at a broader level.

The goal of Slow Money is to have one million people investing 1% of their assets in local food systems. The numbers are obviously somewhat arbitrary, but having a measurable objective is a good strategy. Woody is also part of the Investors' Circle, which has a "patient capital" philosophy. There are some very creative ideas for alternative financing mechanisms emerging.

BTW, I'm attending the conference in Vermont...seeing Chris on the agenda was the deciding factor for me.

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Re: Investing in the future with SlowMoney

JAG wrote:

...the details remain unclear to me. Any chance you could elaborate on the details? Are they looking for investments in the organization, or just locally. I understand and agree with their agenda, but I don't understand its application.

This is my somewhat stale understanding.  The details are in the works.  The organization can use donations, not investments.  Right now they are, like CM, building awareness.

For the Slow Money Alliance, one million endorsers of the principles seems a good number to initially invite to do something that's aligned with the principles.

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Re: Investing in the future with SlowMoney

As a farmer,localvore,slow foodie,(been following the evolution of...)slow money family we applaud the CM communities apparent endorsement of the "slow" movement.

the robinsons

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ltlredwagon
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Re: Investing in the Future with SlowMoney

"...organizations dedicated to bringing intelligent responses to our predicament."

Well, I will definitely support SlowMoney (their principles seem fundamental and vital), but I was hoping for something more related to the "predicament" of debt-based money, and corrupt monetary and banking systems.  Dr. Chris' reluctance to throw his hat into some of those rings would be quite understandable, for the same reasons he stated above, and others.  My position is quite different, so I've already thrown a few hats.  Maybe he'll make a ring of his own.  I'd throw my hat into that one in a nanosecond.

sofistek's picture
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Re: Investing in the Future with SlowMoney

Does the organisation envisage a future with economic growth? Though their principles look great, for the most part, they seem to be happy with business making profits. It seems to me that profit equals growth. Is it possible for profits to be made without growth being a consequence? I asked this in a separate topic, before comments were enabled here.

James Wandler's picture
James Wandler
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Re: Investing in the Future with SlowMoney

Chris,

Hat tossed - signed up. 

Probably the best way to do slow money now is to trace back your food so that you are buying from the origin of your food - a sustainable family farmer. 

Here are some possibilities of slowing money down in a big way:

- buy a farm and work it yourself or hire someone

- put the farm into a cooperative ownership (30 investors?) and hire someone to work it and each investor shares in the bounty - either produce or cash

- separate the farm from the investors - have the investors contribute cash each year to rent land and hire the farmer and they share in the bounty - either produce or cash

One last idea - for someone holding precious metals expecting a sharp increase in value - how can you come up with "slow money" now?  How about taking on debt and using this for the slow money?  Then should the precious metals soar the debt can be paid off - but most importantly - the money has been used to create production now when we need it. 

Remember - you can't eat gold - so waiting for gold to be more valuable means precious time lost.  Normally I'm in favor of reducing debt but this might be the exception.

I thought readers might enjoy my recent personal efforts in "slow money".  Note that I have no farming experience but I am helped by my father-in-law who does. 

Interpreting Chris' "pace and scope of change" I went the distance and bought a farm and set up a cow/calf operation.  I'm trying to follow the Joel Salatin model of "let the animals do the work" and so far this has worked - they have turned 40 acres of neglected hayfield into something that looks like pasture.  However two days ago my second calf to be born needed two neighboring farmers to help pull it from its mother - I've been made to understand that both front legs should have come out before the head (a diving motion) but one leg was stuck - this was a large calf and the mother has a small pelvis so it took some time for the mother to recover.  The calf's front legs were injured from the pulling so once the mother recovered we carried the calf out of the pasture in a wheelbarrow with the mother following - we set them up near the house to keep them from the coyotes who would smell the blood from the birth. 

The calf front legs are now improving but it still doesn't know how to suckle yet.  So I'm learning how to teach it to suckle - by pushing the calf under the mother, put a couple fingers into its mouth and slip the teat into its mouth.  I'm also learning how to milk the mother and feed the calf by bottle.  That's the end of day 3.  Oh, right, I have nine more mothers expecting!  Likely waiting for the full moon which isn't far away...

Cheers,

James

James Wandler's picture
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Re: Investing in the Future with SlowMoney

sofistek,

Yes - a business can make profits without growth. The reason for the profits is just straight math - the products/services are sold for more than the costs (labor, leasing of premises, overhead costs, etc.)    Effectively there is an inherent characteristic of the organization itself that generates the profits.

The most simple example is someone who does a purely service job - say a massage therapist.  Basically they charge for their time.  Their time doesn't have anything to do with the concept of growth - the time of the massage therapist is a renewable resource. 

One problem with corporations is that they are not really valued based on the profits they earn - they are valued based on this profit growing into the future at a certain rate for an ongoing period of time.  Thus the corporations must find ways to grow at ever increasing ways to keep the share price high.

Another problem with corporations is that sustainability (i.e. all externalities are accounted for) is largely ignored and thus actual profits are much lower than calculated. 

Cheers,

James

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James Wandler
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Re: Investing in the Future with SlowMoney

All,

Once you've signed up you'll get the Winter 2010 newsletter which has a lot more information about what's going on.  Here's the link:

http://bit.ly/slowmoneynews

Cheers,

James 

 

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Re: Investing in the Future with SlowMoney

James Wandler wrote:
One problem with corporations is that they are not really valued based on the profits they earn - they are valued based on this profit growing into the future at a certain rate for an ongoing period of time.  Thus the corporations must find ways to grow at ever increasing ways to keep the share price high.

This is not completely true.  There are 2 primary ways an investment in a company can be returned to the investor:  1) Equity appreciation - this is what you refer to in that a company expects to return a higher return in the future through it's stock price by growing the company or  2) Dividends - which are payments on investments as the company earns profits.  Many large established companies pay dividends, and a lot of investment professionals like Peter Schiff recommend them, in that you are taking profits earned as they are made as opposed to waiting for appreciation.

James Wandler wrote:
Another problem with corporations is that sustainability (i.e. all externalities are accounted for) is largely ignored and thus actual profits are much lower than calculated.

While I agree that many investors do not account for these issues, it's really not the corporations that are at fault.  We have become a society seeking instant gratification and because of the realitivly recent (30 or so years) distortions of the markets, that has become the normal behavior.

I don't see anything wrong with either of these investment methods or the sustainability of them. The issue is that the investing public has been lulled into easy money, but that will change.  A more realistic investment environment will certainly be upon us soon, and then the sustainability and validity of business ventures will result in much more due dilligence by the investor.

sofistek's picture
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Re: Investing in the Future with SlowMoney

James Wandler wrote:

Yes - a business can make profits without growth. The reason for the profits is just straight math - the products/services are sold for more than the costs (labor, leasing of premises, overhead costs, etc.)    Effectively there is an inherent characteristic of the organization itself that generates the profits.

The most simple example is someone who does a purely service job - say a massage therapist.  Basically they charge for their time.  Their time doesn't have anything to do with the concept of growth - the time of the massage therapist is a renewable resource.

Hi James,

But if the company is pulling in more cash than the service or product costs to produce (including overheads, resources, etc.) then it has extra cash. For what? It can either plough the profits back into the company, thus growing the company (or becoming more efficient and thus making more profit), or it can distribute the profits to shareholder, employees and/or owners, to be spent growing the economy. Even in your massage therapist example, if the charge is greater than the cost of providing the service (including labour), then a profit is earned that will go into growing the economy, somewhere down the line.

So I still can't see how profit will not translate into growth.

Tony

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Re: Investing in the Future with SlowMoney

hmmmm, Fair point Sofistek, but (and unless Im totally wrong, and could be) isnt the point to slow money down, not stop it all together? Keep it local, grow the local communities? If that is the case, a business can still make a profit, and still put some back into the business effectivly growing it, but also spend some locally too, helping another business. Rather then say, wal-mart, or Goldman.........bare with me as Im pulling this out of my backside, I guess All im saying is that slowing money down wont stop growth at all, just change its speed and direction.

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Re: Investing in the Future with SlowMoney

I'm grabbing the term "slow money." Here in Maharashtra State at Meherabad the home of Avatar Meher Baba, I live next door to "PRITHVI," an NGO founded by Shami Shaligram. Of Prithvi's various projects, one is an organic farm where Vedic Agriculture, "Rishi Krishi" is practiced. 

For 7 yrs. I didn't wake up to this opportunity until I moved next door to Shami and became a regular in daily conversation. Now at the site of my new home I have 26 holes with leaves, grass, and Brahma cow dung that will be covered full with black earth tomorrow then sit a month until monsoon rain comes, projected for late June. 

2 trees are chickoo, fruit I like, 2 are flesh for birds, 16 put nitrogen into the soil. Most will come from the Prithvi farm. For a yearly contract I'll get 2 visits a month from a farmer on the Prithvi staff following the growth of my trees and bushes -- forgot those that are 2 fragrant ones: mogra and night-blooming jasmine.

Catching on last year to my opportunity  relative to the changing economy and my neighbor's effort I brought back multiple packets of zucchini varieties that we have to go to Pune to buy, 2.5 hrs. each way. Also herbs: lavender, basil, thyme. Daily I'm expecting a supply of tulsi leaves from the farm replacing the 5 cans I've been stockpiling when in Pune. I make cold tulsi 5 lts. at a time. Shami will have the farm workers grow the zucchini and I can either get seedlings or better buy from the crops. It's 8 mins. to the farm that is not only the produce but restful with the cows in an open barn I could sleep in and a large dung area under 4 neem trees where I can sit and do nothing but stare at trees and crops.

I will put "Slow Money," its intent, effort to date, and prosperity-now-coming in my night prayer at Samadhi, the shrine,  where I will lay a flower on the pile from the day's visiting pilgrims and staff. The walk there takes me through the Trust tamarind orchards now with bare earth and small mounds of manure around each base. That crop goes to the bazaar.

While I can get good veggies at the bazaar, I had to accept buying them meant a dim, big, open building with a dirt floor and discards to walk among preferably entering from the metal bazaar lane as on the other end there are cows with the odor strong with urine added to the open Eastern toilets. BUT the beets, carrots, okra and dill I get are fresh.

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Re: Investing in the Future with SlowMoney

When Americans return from the Indian summer on June 15, I can pass the term "slow money" and the "SLOW MONEY" organization mission around building energy here for there.

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Re: Investing in the Future with SlowMoney

sofistek wrote:

Hi James,

But if the company is pulling in more cash than the service or product costs to produce (including overheads, resources, etc.) then it has extra cash. For what? It can either plough the profits back into the company, thus growing the company (or becoming more efficient and thus making more profit), or it can distribute the profits to shareholder, employees and/or owners, to be spent growing the economy. Even in your massage therapist example, if the charge is greater than the cost of providing the service (including labour), then a profit is earned that will go into growing the economy, somewhere down the line.

So I still can't see how profit will not translate into growth.

Tony

Profits are normal and natural.  I don't think they imply growth.  The choice of where to apply the profits is the key.  Here's a quote from the Fedco catalog:  

"Potato Yields:  An average yield is 10 pounds harvested to 1 pound planted (10:1).  Less than 6:1 probably indicates a problem, likely caused by low fertility, lack of water, or excessive disease or insect pressure.  Yields as high as 20:1 are exceptional, but can be achieved."

If I have a 20:1 harvest this year, it doesn't necessarily mean I'm going to plow up more land to plant all the extra potatoes next spring.  I might sell more and save the $ in case I break my leg and have to hire help.  Or I could store the extras in case next year's harvest is a dud.  Or I could compost them and add them back to the soil to improve the quality of the future potatoes.  Or I could hire someone to plant next year while I paint pictures of blooming potato fields.  Profits and excesses don't have to be ugly.  They can lead to beauty and human expression of the divine.

Although normally not a "joiner", I will look into this Slow Money thing because two of my heroes are now involved - Joel Salatin and Chris Martenson.

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year2003create
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Re: Investing in the Future with SlowMoney

Maybe you should try The Venus Project too...

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Re: Investing in the future with SlowMoney

deggleton wrote:

JAG wrote:

...the details remain unclear to me. Any chance you could elaborate on the details? Are they looking for investments in the organization, or just locally. I understand and agree with their agenda, but I don't understand its application.

This is my somewhat stale understanding.  The details are in the works.  The organization can use donations, not investments.  Right now they are, like CM, building awareness.

For the Slow Money Alliance, one million endorsers of the principles seems a good number to initially invite to do something that's aligned with the principles.

I agree that my understanding is stale, thats the point of my inquiry. Anyone can have a vision for the future, but without the means of establishing that vision, its worthless. Perhaps if the slow money movement wants to be taken more seriously, maybe their website should provide a little more detail into how this is going to work, beyond the theoretical. 

The time for discussing the problems and building awareness is over. Give me an actionable plan of attack to build this future that we desire and I will be there. Who has time for more theory and words? The principles are obvious, their application is not.

Besides getting a petition together for people to agree with their principles, have they done anything? I'm not being sarcastic here, I'm sincerely asking for information from others who might know.

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Re: Investing in the Future with SlowMoney

Tony,

Profits are really a reallocation of the money within the debt based money system.  How the money is used determines whether growth will occur or not.  For instance, what if the shareholders receive a dividend and decide to learn from a spiritual teacher and compensate the teacher for his/her services.  This would be another example where growth in the conventional sense does not occur.  However there might be an increase in prosperity.  Society can continue to expand its prosperity indefinitely - what you get when you spend money determines what happens in the economy.  The problem is that fresh money requires debt - see below.  Money originates from debt initially - once each are created they cause different behavior in the economy - but most people are running on a treadmill to get the fresh/circulating money to repay their debts.

In my massage therapist example he/her would get all profits - for a self employed person labor and profits are one and the same.

I also agree with Mary Ellen's arguments.

The root of the problem is the debt based money system which requires growth so that new loans exceed old loans to allow for debt repayments plus interest.  A principle way that money comes into the system is from new homes which have collateral plus a homeowner with a job for debt repayments. 

When growth stops the economy slips into recession. 

The Fed has tried various ways to inject debt into the system to hide the losses and keep the game going but the debt based money system needs to be replaced because it isn't compatible with a planet with finite limits.

Cheers,

James

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James Wandler
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Re: Investing in the Future with SlowMoney

Thanks rhare,

rhare wrote:

James Wandler wrote:
One problem with corporations is that they are not really valued based on the profits they earn - they are valued based on this profit growing into the future at a certain rate for an ongoing period of time.  Thus the corporations must find ways to grow at ever increasing ways to keep the share price high.

This is not completely true.  There are 2 primary ways an investment in a company can be returned to the investor:  1) Equity appreciation - this is what you refer to in that a company expects to return a higher return in the future through it's stock price by growing the company or  2) Dividends - which are payments on investments as the company earns profits.  Many large established companies pay dividends, and a lot of investment professionals like Peter Schiff recommend them, in that you are taking profits earned as they are made as opposed to waiting for appreciation.

You are right - I was focusing on the profits themselves which provide the source for the equity appreciation and the distribution of dividends which together determines the share value of the corporation.  Growth of profits is a huge component in the value of the share value.

James Wandler wrote:
Another problem with corporations is that sustainability (i.e. all externalities are accounted for) is largely ignored and thus actual profits are much lower than calculated.

rhare wrote:
While I agree that many investors do not account for these issues, it's really not the corporations that are at fault.  We have become a society seeking instant gratification and because of the realitivly recent (30 or so years) distortions of the markets, that has become the normal behavior.

I don't see anything wrong with either of these investment methods or the sustainability of them. The issue is that the investing public has been lulled into easy money, but that will change.  A more realistic investment environment will certainly be upon us soon, and then the sustainability and validity of business ventures will result in much more due dilligence by the investor.

I suppose I wasn't laying the blame solely on corporations - just that externalities should be pushed back into the corporations to reflect sustainability on a planet with finite limits - this would mean that their true profits would be much lower.  I believe that the planet will force changes upon us so that profits will become true profits with externalities imposed and share prices would drop markedly.

As for the current value of shares I believe we are in a depression and the stock market is only assuming that nothing is wrong because the Fed is buying up shares to artificially keep everyone happy.  At this time I have an aversion to stocks - taking the view that if it isn't real then you don't own it.  This may indicate an opportunity to reallocate from shares to precious metals - or better "slow money".

Cheers,

James

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Re: Investing in the Future with SlowMoney

The only reasonable solution I've seen to avoid total collapse was put forth by Herman E Daly last year:

From a Failed Growth Economy to a Steady-State Economy — Herman Daly – An Economic Policy Approach to Avoiding Collapse
At the bi-annual conference of The United States Society for Ecological Economics in June of 2009, Herman Daly was honored for his many contributions to the field of ecological economics.  During his acceptance speech, in which he vilified the religion of growth hardwired into mainstream economic thought, he offered ten policy proposals directed at transitioning us to a sustainable steady-state economy and by implication, saving us from our own “ecological suicide”.

  1. Use a Cap-Auction-Trade system for basic resources – Caps would limit biophysical scale by quotas on depletion or pollution, whichever is more limiting. Auctioning the quotas would capture scarcity rents for equitable redistribution. Trade would allow efficient allocation to highest uses. This policy has the advantage of transparency. It would limit  the amount and rate of depletion and pollution that the economy can be allowed to impose on the ecosystem. Caps are quotas or limits to the throughput of basic resources, especially fossil fuels. The quota would typically be applied at the input end because depletion is more spatially concentrated than pollution and hence easier to monitor. The resulting higher price of basic resources would promote more economical use at each upstream stage of production.
  2. Institute Ecological Tax Reform (as an alternative or supplement to cap-auction-trade)
    Shift the tax base from a tax on value added (labor and capital)  to a tax on “that to which value is added”, namely the entropic throughput of resources extracted from nature (depletion), and returned to nature (pollution). This internalizes external costs as well as raises revenue more equitably. It prices the scarce but previously un-priced contribution of nature. The value added by labor and capital is something we want to encourage, so stop taxing it. Depletion and pollution are things we want to discourage, so tax them.
  3. Limit the Range of Inequality in Income (establish a minimum income and a maximum income)
    Without aggregate growth poverty reduction requires redistribution. Complete equality is unfair; unlimited inequality is unfair. Seek fair limits to the range of inequality. The civil service, the military, and the university manage with a range of inequality of a factor of 15 or 20. Corporate America has a range of 500 or more. Many industrial nations are below 25. Could we not limit the range to, say, 100, and see how it works? People who have reached the limit could either work for nothing at the margin if they enjoy their work, or devote their extra time to hobbies or public service. The demand left unmet by those at the top will be filled by those who are below the maximum. A sense of community necessary for democracy is hard to maintain across the vast income differences current in the US. Rich and poor separated by a factor of 500 become almost different species. The main justification for such differences has been that they stimulate growth, which will one day make everyone rich. This may have had superficial plausibility in an empty (resource abundant) world, but in our full world (resource limited) it is a fairy tale.
  4. Free up the Length of the Working Day, Week, and Year
    Allow greater freedom for part-time or personal work. Full-time external employment for all is hard (impossible) to provide without growth. Other industrial countries have much longer vacations and maternity leaves than the US.  For the Classical Economists (versus today’s neo-classical economists) the length of the working day was a key variable by which the worker balanced the marginal disutility of labor with the marginal utility of income and of leisure so as to maximize enjoyment of life. Under industrialism the length of the working day became a parameter rather than a variable. We need to make it more of a variable subject to choice by the worker. And we should stop biasing the labor–leisure choice by advertising to stimulate more consumption and more labor to pay for it. Advertising should no longer be treated as a tax deductible ordinary expense of production.
  5. Re-regulate International Commerce
    Move away from free trade, free capital mobility and globalization, and adopt compensating tariffs not to protect inefficient firms, but to protect efficient national policies of cost internalization from standards-lowering competition. We cannot integrate with the global economy and at the same time have higher wages, environmental standards, and social safety nets greater than the rest of the world. Trade and capital mobility must be balanced and fair, not deregulated or “free”.
  6. Reduce and amend the authority of the International Monetary Fund, World Bank, and the World Trade Organization
    Transition to something like Keynes’ original plan for a multilateral payments clearing union, charging penalty rates on surplus as well as deficit balances. This arrangement would seek balance on current account, and avoid large foreign debts and capital account transfers. For example, under Keynes’ plan the US would pay a penalty charge to the clearing union for its large deficit with the rest of the world, and China would also pay a similar penalty for its surplus. Both sides of the imbalance would be pressured to balance their current accounts by financial penalties, and if need be by exchange rate adjustments relative to the clearing account unit, called the bancor by Keynes. The bancor would serve as world reserve currency, a privilege that should not be enjoyed by any national currency. The IMF preaches free trade based on comparative advantage, and has done so for a long time. More recently the IMF-WB-WTO have started preaching the gospel of globalization, which, in addition to free trade, means free capital mobility internationally. The classical comparative advantage argument, however, explicitly assumes international capital immobility! When confronted with this contradiction the IMF waves its hands, suggests that you might be a xenophobe, and changes the subject. The IMF-WB-WTO contradict themselves in service to the interests of transnational corporations. International capital mobility, coupled with free trade, allows corporations to escape from national regulation in the public interest, playing one nation off against another. Since there is no global government they are in effect uncontrolled. The nearest thing we have to a global government (IMF-WB-WTO) has shown no interest in regulating transnational capital for the common good.
  7. Move to 100% Reserve Requirements instead of Fractional Reserve Banking.
    This would put control of the money supply in hands of the government rather than private banks, which would no longer be able to create money out of nothing and lend it at interest. All quasi-bank financial institutions should be brought under this rule, regulated as commercial banks subject to 100% reserve requirements. Banks would earn their profit by financial intermediation only, lending savers’ money for them (charging a loan rate higher than the rate paid to savings account depositors) and providing checking, safekeeping, and other services. With 100% reserves every dollar loaned would be a dollar previously saved, re-establishing the classical balance between abstinence and investment. The government can pay its expenses by issuing more non interest-bearing fiat money to make up for the eliminated bank-created, interest-bearing money. However, it can only do this up to a strict limit imposed by inflation. If the government issues more money than the public wants to hold, the public will trade it for goods, driving the price level up. As soon as the price index begins to rise the government must print less and/or tax more. Thus a policy of maintaining a constant price index would govern the internal value of the dollar.
  8. Stop treating the Scarce as if it were Non-scarce, but also stop treating the Non-scarce as if it were Scarce.
    Enclose the remaining commons of rival natural capital (e.g. atmosphere, electromagnetic spectrum, public lands) in public trusts, and price it by a cap-auction–trade system, or by taxes, while freeing from private enclosure and prices the non-rival commonwealth of knowledge and information. Knowledge, unlike throughput, is not divided in the sharing, but multiplied. Once knowledge exists, the opportunity cost of sharing it is zero and its allocative price should be zero. International development aid should more and more take the form of freely and actively shared knowledge, along with small grants, and less and less the form of large interest-bearing loans. Sharing knowledge costs little, does not create un-repayable debts, and it increases the productivity of the truly rival and scarce factors of production. Existing knowledge is the most important input to the production of new knowledge, and keeping it artificially scarce and expensive is perverse. Patent monopolies (aka “intellectual property rights”) should be given for fewer “inventions”, and for fewer years. Costs of production of new knowledge should, more and more, be publicly financed and then the knowledge freely shared.
  9. Stabilize Population
    Work toward a balance in which births plus in- migrants equals deaths plus out-migrants. This is controversial and difficult, but as a start contraception should be made available for voluntary use everywhere.  Support voluntary family planning, and enforcement of reasonable immigration laws, democratically enacted in spite of the cheap labor lobby.
  10. Reform how we measure and manage national well-being
    Separate GDP into a cost account and a benefits account. Compare them at the margin, stop throughput growth when marginal costs equal or exceed marginal benefits. In addition to this objective approach, recognize the importance of the subjective studies that show that, beyond a threshold, further GDP growth does not increase self-evaluated happiness. Beyond a level already reached in many countries GDP growth delivers no more happiness, but continues to generate resource depletion and pollution. At a minimum we must not just assume that GDP growth is “economic growth”, but prove it. And start by trying to refute the mountain of contrary evidence.

The authors of "The Limits to Growth – The 30-Year Update" ran a systems theory model [World3] which calculated and projected out future collapses in population and human welfare using key global metrics. There was only one scenario which could be followed, and only if implemented in time, to avoid catastrophic collapse. It included the three following assumptions:

  1. All couples limit their family size to 2 children and have access to effective birth control technologies
  2. A fixed goal of industrial output per capita (i.e. a steady-state economy)
  3. The development  and investment in powerful technologies for pollution abatement, land yield enhancement, land protection and nonrenewable resources (assuming 20 years for full implementation)

We are pretty much beyond the point of implementing anything right now to avoid catastrophic collapse. It's all too little too late.

see paper here:

Avoiding Societal, Economic, and Ecological Collapse? Too late ...

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Re: Investing in the Future with SlowMoney

Maybe a reason to join.

V

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Re: Investing in the Future with SlowMoney

Mary Ellen wrote:

Profits are normal and natural.  I don't think they imply growth.  The choice of where to apply the profits is the key.  Here's a quote from the Fedco catalog:  

"Potato Yields:  An average yield is 10 pounds harvested to 1 pound planted (10:1).  Less than 6:1 probably indicates a problem, likely caused by low fertility, lack of water, or excessive disease or insect pressure.  Yields as high as 20:1 are exceptional, but can be achieved."

If I have a 20:1 harvest this year, it doesn't necessarily mean I'm going to plow up more land to plant all the extra potatoes next spring.  I might sell more and save the $ in case I break my leg and have to hire help.  Or I could store the extras in case next year's harvest is a dud.  Or I could compost them and add them back to the soil to improve the quality of the future potatoes.  Or I could hire someone to plant next year while I paint pictures of blooming potato fields.  Profits and excesses don't have to be ugly.

Mary,

I'm thinking specifically of profits, in the business sense, since the Slow Money principles talks about businesses giving away half of their profits, implying that the notion of businesses continuing to make a profit is supported.

Even in your example above, if there were excesses each year that were sold, eventually, the farmer will spend the profits (once he or she has enough to cover those rare health situations and has painted enough potato fields). But, yes, with the right attitude that particular profit need not lead to growth but our economy is made up of many types of businesses and the Slow Money principles don't state that only farm businesses are viable future businesses.

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Re: Investing in the Future with SlowMoney

James Wandler wrote:
For instance, what if the shareholders receive a dividend and decide to learn from a spiritual teacher and compensate the teacher for his/her services.

Yes, but how many students can that spiritual teacher handle? At one extreme, the teacher wouldn't be in business, if enough students didn't receive those dividends. At the other extreme, there are too many students for the teacher to handle and so he, or she, has to grow the business (or else limit the intake, which forces those dividend receivers to spend the money elsewhere).

James Wandler wrote:
for a self employed person labor and profits are one and the same.

I don't see that. The person could choose to double his charges (and, if he's good enough, will get that price). It's the same amount of labour (and so requires the same amount of energy input - which may be food, for example) but profits have more than doubled. Any profit, income above expenditures, will be spent on something eventually (or provide capital for banks to lend money to others, to spend on something), thus fuelling growth.

I'm just having a hard time understanding how an economy that incorporates the profit motive can be sustainable, at least without a very disciplined (legislated?) approach to how those profits are used.

[Damn it, why does this software not honour the paragraph tags consistently? Sorry for the lack of blank lines between some paragraphs.]

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Re: Investing in the Future with SlowMoney

xraymike79 wrote:
There was only one scenario which could be followed, and only if implemented in time, to avoid catastrophic collapse.

Yes, and that scenario is already well behind schedule. As you say, we are past the point of avoiding collapse, in our opinion.

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Re: Investing in the Future with SlowMoney

ltlredwagon wrote:

"...organizations dedicated to bringing intelligent responses to our predicament."

Well, I will definitely support SlowMoney (their principles seem fundamental and vital), but I was hoping for something more related to the "predicament" of debt-based money, and corrupt monetary and banking systems.....

Agree.  These folks (ISM) seem well intentioned and their heads are right with regard to food production but they will get creamed by debt-money system if they do not take steps to play outside the bounds of fiat currency with a closed loop hard currency of their own; but then the FEDs will come...   I am also suspicious there will be plenty of Obama stickers on the cars at Shelburne farms...anyone attending their event who voted for Obama and hasn't scraped the sticker yet is naive and cannot possibly be genuine.  Chris, I thoroughly appreciate your reluctance to associate with "groups" for the reasons you stated; what we need is paradigm shift and "groups" can't make that happen.

USNRol (Lurker)

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Re: Investing in the Future with SlowMoney

V wrote:

Maybe a reason to join.

V

Awesome.  So people are finally admitting what conservative/anti-progressive folks have known since the Milkman dissappeared 40+ years ago...it's way better to get ur milk in glass bottles that are reused each time. Duh.

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Re: Investing in the Future with SlowMoney

sofistek wrote:

James Wandler wrote:
For instance, what if the shareholders receive a dividend and decide to learn from a spiritual teacher and compensate the teacher for his/her services.

Yes, but how many students can that spiritual teacher handle? At one extreme, the teacher wouldn't be in business, if enough students didn't receive those dividends. At the other extreme, there are too many students for the teacher to handle and so he, or she, has to grow the business (or else limit the intake, which forces those dividend receivers to spend the money elsewhere).

Tony,

I'm just using an example to support my argument - to address your special cases I can say that if the spiritual teacher isn't very good then another would get the students.  In the event that the teacher couldn't handle all of the students then perhaps the students might decide to take up art or some other activity in the realm of prosperity not growth.

sofistek wrote:
James Wandler wrote:
for a self employed person labor and profits are one and the same.

I don't see that. The person could choose to double his charges (and, if he's good enough, will get that price). It's the same amount of labour (and so requires the same amount of energy input - which may be food, for example) but profits have more than doubled. Any profit, income above expenditures, will be spent on something eventually (or provide capital for banks to lend money to others, to spend on something), thus fuelling growth.

Profits are just reallocations of the debt based money between people's bank accounts.  It doesn't matter how much is charged - and for employed persons their "profit" is their wage - what matters is how the money is spent.

sofistek wrote:
I'm just having a hard time understanding how an economy that incorporates the profit motive can be sustainable, at least without a very disciplined (legislated?) approach to how those profits are used.

A switch from debt based monetary system is necessary but Herman Daly wrote the unread books I have on Ecology Economics so I'll throw my hat in the ring with post http://www.peakprosperity.com/comment/77916#comment-77916

Cheers,

James

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Re: Investing in the Future with SlowMoney

sofistek wrote:

But if the company is pulling in more cash than the service or product costs to produce (including overheads, resources, etc.) then it has extra cash. For what? It can either plough the profits back into the company, thus growing the company (or becoming more efficient and thus making more profit), or it can distribute the profits to shareholder, employees and/or owners, to be spent growing the economy. Even in your massage therapist example, if the charge is greater than the cost of providing the service (including labour), then a profit is earned that will go into growing the economy, somewhere down the line.

So I still can't see how profit will not translate into growth.

I am fully confident that you will always find someone to burn it all up :) That's how it works in nature... animals eat plants, other animals eat other animals.. some things get created, while others die.

Samuel

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Re: Investing in the Future with SlowMoney

James Wandler wrote:
In the event that the teacher couldn't handle all of the students then perhaps the students might decide to take up art or some other activity in the realm of prosperity not growth.

But, even then, that money gets spent on stuff (artist materials, travel to paint landscapes). Only if the students don't spend the profits can growth be avoided, as far as I can see. Of course, if some steady state is ultimately achieved, then any profits are soaked up by (the new) business as usual activities, which leads into a whole set of other questions about winners and losers, and how, or why, new businesses start up.

James Wandler wrote:
It doesn't matter how much is charged - and for employed persons their "profit" is their wage - what matters is how the money is spent.

Employed persons also have costs involved in providing their labour, so their profit is a proportion of their wage. Some people never really make a profit, because of lifestyle choices or lack of opportunity. But I'm focused on business profits, since Slow Money appears to support businesses making a profit (i.e. charging more than the cost of providing a product or service).

Carl Veritas wrote:
A switch from debt based monetary system is necessary but Herman Daly wrote the unread books I have on Ecology Economics so I'll throw my hat in the ring with post http://www.peakprosperity.com/comment/77916#comment-77916

I must read more Herman Daly. A steady state economy is a must, for sustainability, but it's difficult to envisage how that would work, in practice (how do businesses arise, and why; how do they operate; how are prices determined; what products are services are sustainable; and so on).

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Re: Investing in the Future with SlowMoney

sofistek wrote:

But, even then, that money gets spent on stuff (artist materials, travel to paint landscapes). Only if the students don't spend the profits can growth be avoided, as far as I can see. Of course, if some steady state is ultimately achieved, then any profits are soaked up by (the new) business as usual activities, which leads into a whole set of other questions about winners and losers, and how, or why, new businesses start up.

You know, maybe we shouldn't try to make things more complicated than they really are (brandishing Occam's razor). There are winners and losers.. people compete with each other, just like animals, which we basically are. For the past century, it's been going better in the Western world because we found lots of food (energy, oil) as a species, but that doesn't make us any better than any other species. Nature will avoid any further growth whether we like it or not. What makes us so certain that we are any more rational than the average stray cat? That's the question I think we need to answer first... Maybe "I made a profit today" is just our human way to say "I stole that other guy's food today" or "I prevented a newborn to come to life today".

Samuel

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Re: Investing in the Future with SlowMoney

sofistek wrote:
James Wandler wrote:
A switch from debt based monetary system is necessary but Herman Daly wrote the unread books I have on Ecology Economics so I'll throw my hat in the ring with post http://www.peakprosperity.com/comment/77916#comment-77916 
I must read more Herman Daly. A steady state economy is a must, for sustainability, but it's difficult to envisage how that would work, in practice (how do businesses arise, and why; how do they operate; how are prices determined; what products are services are sustainable; and so on).

Another approach is to read David Holmgren's book "Permaculture: Principles and Pathways Beyond Sustainability".  For instance, if 50% of the profits given away were used to plant trees then we go beyond sustainability into regenerating the Earth. 

A second example would be to set up High Density grazing operations using the principles of Allan Savory's book "Holistic Management" which would turn desert back into grassland with a yield of healthy pastured meat.  It turns out that grassland in arid climates has a symbiotic need of rest and then intense grazing as herds in the wild would do. 

Joel Salatin will emphasize that we get three votes every day to buy healthy food.  Michael Pollan says: "Eat food, mostly plants, not too much".  Gary Hirshberg of Stonyfield Farm focuses on growth because every time he grows he converts another farm to organic - in a world gone haywire he sees a lot of merit in being good and succeeding rather than trying to be perfect and not getting anywhere.

It really is a question of that we get what money is used for - destructive or regenerative.  We need to invert the way we spend our money.

Oh, and in case anyone is interested - the calf I mentioned above did learn how to get its mother's milk at the end of Day 4 so I'm glad not to have to bottle feed it!

Cheers,

James

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Re: Investing in the Future with SlowMoney

Hi pjc

Could you give some more info on " Rishi Krishi" sounds interesting.

I believe Maharasrthra  is in India. Are there many organic farmers there? What do you think as to the sustainability of India?

V

ps who is Meher Baba?

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Can't throw my hat in this ring

We all yearn for home but ... you can't go home again. 

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Re: Investing in the Future with SlowMoney

sofistek,

It may be too late at night to give this the thought it needs but in the natural world an animal can grow and sequester more resources than it needs (ultimately coming from the constant stream of solar energy reaching the earth) but eventually it will die and all will be lost to entropy, or other organisms that subsequently sequester its previously accumulated growth, all on a constantly diminishing energy scale according to the laws of thermodynamics. If the money supply is set by how much gold we have and every bill corresponds to a piece of that gold then there will be a limit to how much profit can be made. Companies will grow to serve their market and no more, not like the current mega corporation mess. Much like in the wild, businesses will grow to fill a void and excess profit (energy) will be spread around just like a top predator does. That company will reach a limit to its growth because there won't be a large enough market to serve. Alternatively, it will displace other less efficient businesses and grow at their expense. The profits that are spread around will do their thing and enable others to sequester more ecological energy for themselves but this all goes according to the laws of thermodynamics so all profit and energy accumulated will diminish with time.

My gut feeling is that since the seccond law of thermodynamics says that energy only flows downhill, and money is basically a claim on biological energy (via human labour) then the profits will simply get radiated out to outer space as infrared radiation. It sounds bizarre, but this is exactly what happens if you assume all money is a claim on human labour and all human labour is a product of biological productivity and biological productivity is a function of solar energy captured by plants and brought into the ecosystem.

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Re: Investing in the Future with SlowMoney

Rishi Krishi (pronounced Rushi Krushi) is v. ancient vedic agriculture based on the brahma cow. Currently, twenty-six holes for my trees have dried b. cow manure, leaves, and grass. Black earth is due tomorrow as my site is mostly stony. That will sit for a month until monsoon rains. Then the trees planted. 2x / month, a RK staff / farmer will visit  with RK fertilizer -- all organic. Also he'll watch for good, healthy growth.

I learned Rishi Krishi Agri from my neighbor, Shami Shaligram, founder of an NGO, PRITHVI, that has among its activities an agricultural forum, organic farm, and education extension. Shami left for U. Minnesota yesterday where she's a presenter in a Leadership Workshop. She has global experience in work and advanced education in India. She can inform you.

In conversation listening to her talk about RK, I told her I wanted to be the first home owner to have RK in my compound. Since then 4 others have signed up. Your interest pleases me for Shami's effort growing a vital, expanding, serving NGO that she links globally to others' similar efforts / accomplishments. .A friend to her both here in MS, India, and America has loaned her 40 acres in Alabama for the first RK experiment in America. To that end she has contacted the Brahma Cow Association there and had a reply from Texas. American cows' dung isn't the right quality. There is a Brahma cow breeder near the land in Alabama.

I haven't seen this video but Shami told me a farmer in a nearby village growing onions had a poor financial return on a crop and taking Shami's suggestion to plant 1/3 the amount of land but use the RK method his crop results were triple the amount and higher quality onions. We've been in onion harvest season so fields are full of pyramids of red onions. He tells his story on the video.

Writing this I realized I could add Shami's e-address. She's also on FACEBOOK.

"Shami Shaligram" <shami.prithvi@gmail.com>,

I had sent her my blog comment on "Slow Money" and I'll forward your inquiry and my reply. Knowing Shami, she'd be absolutely delighted to hear from you directly.

I am in my eighth year living in India coming first in 1994, then 1997 - 99 and in 2003 moving here. If you know the meaning of karma then you understand why I'm here. This is where I am to be in this lifetime at this period of my life.  I'll give you the website for Meher Baba. It's my choice of spiritual belief but doesn't come under "Slow Money" so I won't comment. It's part of my writing as it defines where I am in India and why.

http://www.ambppct.org/

I haven't figured out the formatting yet.

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Re: Investing in the Future with SlowMoney

Hi V

I can't speak for organic farmers in India or sustainability. My exposure is limited to Arangaon Village area. What I do see is the families on my lane harvesting grains from their farms and bagging the wheat, millet... hanging onions. If you look on their porches or into their homes you see large bags stacked. It's impressive sustainability to me. Then there are foods they make, dry on tarps, and store.

This is a drought area. I see more bore wells being dug and that only lowers the table more rapidly. Rain harvesting is non-existent to my view among villagers. At Meherabad some have roof rain harvesting. I have an underground second tank for rain and my gutters are in the gutter materials-buying stage. Water usage is restricted in pilgrim and resident housing from 6 p.m. to 5 a.m. No Trust water is allowed for personal garden usage. No water, no irrigation, and I've seen brown acreage some years kilometer upon kilometer on the way to Pune.

The Burpee seeds I brought Shami were not organic but she explained that through growing, harvesting, planting over and over in the R/K soil she will produce organic seeds / crops from them. A relief to me as I'd spent 40.00.

It's from her practice at the PRITHVI farm that she extends to farmers building a growing improved agricultural land usage spreading exponentially as each one farmer who comes for education may have brothers, brother-cousins, and uncles to bring into the program.

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Re: Investing in the Future with SlowMoney

James Wandler wrote:
Another approach is to read David Holmgren's book "Permaculture: Principles and Pathways Beyond Sustainability".  For instance, if 50% of the profits given away were used to plant trees then we go beyond sustainability into regenerating the Earth.

I don't have that book, though I've a few others on permaculture. I agree that using 50% of profits to plant trees would be great but I'd worry what is being done with the other 50%. We have to get to steady state, as a minimum, otherwise all the good work that could be done with 50% of the profits will eventually be undone. Growth kills the planet, smart growth kills the planet.

Maybe I'm looking for perfection but, to me, it's simple. Unsustainable societied must end. Only sustainable societies will not collapse (via our own hand).

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Re: Investing in the Future with SlowMoney

Mark_BC wrote:
If the money supply is set by how much gold we have and every bill corresponds to a piece of that gold then there will be a limit to how much profit can be made.

That would only limit the total profit, of all companies combined. Actually, I'm not sure it would even do that, as, presumably, in that situation, it is just the money supply which is limited. So companies can only accumulate more of that limited supply of money by extracting it from other companies or customers. Total combined profits would be zero, if the money supply is not increasing. Wouldn't it?

Mark_BC wrote:
Companies will grow to serve their market and no more, not like the current mega corporation mess. Much like in the wild, businesses will grow to fill a void and excess profit (energy) will be spread around just like a top predator does.

How does that new business arise? If there is a void, then a new business that arises and grows to fill that void will lead to economic growth. Growth is unsustainable, and damages the environment.

Mark_BC wrote:
That company will reach a limit to its growth because there won't be a large enough market to serve.

That implies that companies will necessarily be single product/service entities. Otherwise, the company could grow by diversifying or consuming or displacing other companies.

Mark_BC wrote:
My gut feeling is that since the seccond law of thermodynamics says that energy only flows downhill, and money is basically a claim on biological energy (via human labour) then the profits will simply get radiated out to outer space as infrared radiation.

Maybe, but I'm concerned about companies operating in a sustainable way, today (since Slow Money exists in today's world). Can a company making profits be sustainable? If profits lead to a growing economy (in some way), then the company is contributing to growth and is not sustainable.

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Re: Investing in the Future with SlowMoney

sofistek,

I've really been bending my mind to wrap my head around this issue lately. It's a tough one.

Regarding the idea that profits necessarily lead to growth, and therefore environmental destruction, I don't think this is necessarily the case, but merely the way our current corporate and financial structure is set up. Profit does not necessarily need to be anything more than excess biological energy being distributed to other people via the currency medium. This is like getting dividend returns off your stock investment. This is different than getting returns from seeing the value of the stock in your company going up. Those are two different investment returns. One is necessarily based on growth, and one isn't.

In a hypothetical society of 100 people, with a ton of farmland such that they are easily able to produce way more food than they need, that excess profit could be eternally distributed to people and still be sustainable.

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Re: Investing in the Future with SlowMoney

sofistek, Mark_BC, guys,

Can we get some definitions straight first? What do you mean by "profit" exactly? According to my dictionary ( http://m-w.com/ ):

1 : a valuable return : gain
2 : the excess of returns over expenditure in a transaction or series of transactions; especially : the excess of the selling price of goods over their cost

The first definition is pretty large, and even if I am the last human alive on the planet, I could grow food, and call it "profit" I suppose...

But I think you have been talking about the second definition there, and it is also my opinion that a "profit" in that case only exists between two or more parties. Asking "Can companies make a profit without growing?" is like asking "Can companies get an excess of stuff without growing?", and the answer is obviously no. But if some dude decides to give bread away instead of selling it, his profit drops to zero, or less. At some point, people decide if they want to make a profit or not. They decide if they want to have buying power over others or not. Such a profit does NOT exist in and by itself. It's just an abstract concept that people agree upon for business, it's not a concrete object.

Samuel

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Re: Investing in the Future with SlowMoney

guardia,

Yes, I've been talking about the second defintion. I've mentioned, several times, that I'm referring to business profits. That is the crux of the Slow Money principle that allows for company profits.

But I wasn't referring to the growth of the company making the profit, necessarily, rather the growth of the economy as a result of (though I realise this is only one factor in growth) companies making profits. "Giving away" half of the profits (as Slow Money envisages) doesn't stop the profit being generated and being spent. Giving away <b>all</b> of the profit doesn't stop that profit being spent to fuel economic growth. Profit is often given away, anyway, in dividends.

Is it possible for a sustainable society to support companies making profits, without profits simply being a continuous redistribution of the same wealth (i.e. losers equals winners)?

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guardia
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Re: Investing in the Future with SlowMoney

sofistek,

In my opinion, as long as the said companies give away all their profits to do something constructive, then yes. But this "something constructive" is rather hard to define... as James noted "in a world gone haywire he sees a lot of merit in being good and succeeding rather than trying to be perfect". For example, it's pretty safe to assume that some things like planting trees are "good", but even there we can never be 100% sure. What trees? Where? How? (I can already hear the "no pine trees in my backyard" campaign, ugh) and that's the problem. I don't see everyone on ever agreeing on "what must be done", so people will keep pulling their own end of the rope, and we know the rest...

Samuel

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Re: Investing in the Future with SlowMoney

Hi.

Woody Tasch, the founder of Slow Money, recently read this thread and provided this reply which he asked me to post.

Best,
Chris


 

I am extremely honored to have Chris' hat thrown into the Slow Money ring. And very happy to see all the conversation it elicited.

As that conversation indicated, the idea of slow money sparks a deep discussion about the nature not just of food systems, but of the economy, corporations, fiat currency, profits, growth.

That's why my book is called Inquiries in to the Nature of Slow Money. As in: if we don't ask the right questions, we will only find ourselves manipulating the wrong data and formulating the wrong answers. Slow Money is, first, a new inquiry into the nature of money, looked at through the lens of the soil and principles of fertility and diversity--economic, cultural and biological diversity. In a culture that is all about the deal, all about the transaction and the portfolio, all about ready, fire, aim, nothing is more important than taking the time to think differently. Most of what passes for social investing today is trapped in the old benchmarks, the old measures of success, so structural change remains elusive. We must dare to think differently, in fundamentally different terms, about money and the soil, or we risk doing the same thing over and over again, hoping for a different outcome.

So, as someone who has been working in venture capital, social investing and philanthropy for 30 years, I do not see the Slow Money Principles as just "a petition." Or as "words" that do not equal "action." They are the beginning of a fundamental shift in economic thinking, underpinning a whole generation of action in the decades to come. This is a generational shift we are about and "well begun" depends upon a new set of values that will inform a qualitatively different kind of investing.

Over the last 18 months, I've interacted with thousands of folks in scores of places, and it is wonderful to see so many people eager to: 1) acknowledge how broken our current system is; and, 2) start doing something about it. Which in our case means: investing in small food enterprises.

As to the "what are they actually doing" questions that a few of you asked, here's an overview.

First, we are building national and regional networks of people who want to put their money into local food systems. In the lingo of triple bottom line, we can call this "building social capital." Real relationships between folks who share values and are committed to investing directly in the place in which they live. This process is well underway. We've got Slow Money networks emerging in more than a dozen locales, including Austin, Boston, Madison, Santa Fe, Seattle, the Bay Area and the Research Triangle. Reports from folks in these regions can be read in our first newsletter, which came out in March.

Second, we are convening national and regional gatherings at which small food enterprises connect with funders. At our first national gathering last fall, 450 people came together from 34 states and six countries. From the group of 25 presenting small food enterprises, four raised a total of $260,000--a small but important beginning. Last year, we also hosted three regional Slow Money Institutes, in Bellingham, WA, Hudson, NY and Madison, WI.

Third, we are building our website over time--it's still in its infancy--into a robust portal that offers options for folks who want to find places to put their money into small food enterprises and local food systems.

Fourth, we are launching, at our upcoming Vermont gathering, the Soil Trust. The first "grassroots, philanthropic nurture capital fund." Say what??? A pool of donations, of any size, that will be used as seed capital to build local food investing intermediaries around the country. Will one million Americans contribute $25 per annum to the Soil Trust? We shall see. . .If this begins to scale, it will mark a major innovation in philanthropy and social investing. We will use this as guarantees, seed capital or co-investment capital, to help build local intermediaries and prime the pump of local investment around the country.

(Now, the Soil Trust is sufficiently new, and sufficiently "integral" along the boundaries of investing and philanthropy that you have to pause to think about it. If we are about "putting back into the soil more than we take out," what could be more natural than a pool of philanthropic dollars that is INVESTED in small food enterprises? That is, all returns stay in the fund to be reinvested. I believe this is the future of philanthropy: philanthropy as investing, rather than as grantmaking. This is a big topic, too big to be explored further here. Stay tuned.)

Fifth, we are developing new investment products and funds, on the for-profit investment side. Think: Slow Munis, municipal bonds dedicated to local food systems. We are early in this process, but indications are promising. Think: Calvert Foundation Slow Money Notes. They don't exist yet, but we are exploring such possibilities with our friends at Calvert.

All of this points us in the direction of our long-term goal: a million investors putting 1% of their assets into local food systems within a decade. It's funny how some people view this goal as insufficiently audacious. Only a million folks? Only 1%? Well, that would be billions of dollars per annum, and if we can get this ball rolling, no one will be happier than I to see it go further or. . .faster. . .

In the meantime, let's get a lot us facing in the same direction. We've got around 11,000 signatories for the Principles. We've got around 1,100 members of the Slow Money Alliance. And we're just announcing the Soil Trust.

Join us.

And let's begin fixing the economy from the ground up.

In friendship,

Woody Tasch
Founder, Slow Money

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Inquiries Into the Nature of Slow Money ~ by Woody Tasch

pdf read online book. Click this link: -

Inquiries Into the Nature of Slow Money: Investing as if Food, Farms and Fertility Mattered 

by Woody Tasch

[quote=]

Back Cover

Could there ever be an alternative stock exchange dedicated to slow, small, and local? Could a million American families get their food from CSAs? What if you had to invest 50 percent of your assets within 50 miles of where you live? Such questions - at the heart of slow money -represent the first steps on our path to a new economy.

Inquiries into the Nature of Slow Money presents an essential new strategy for investing in local food systems, and introduces a group of fiduciary activists who are exploring what should come after industrial finance and industrial agriculture. Theirs is a vision for investing that puts soil fertility into return-on-investment calculations, and serves people and place as much at it serves industry sectors and markets.

Leading the charge is Woody Tasch, whose decades of work as a venture capitalist, foundation treasurer, and entrepreneur now shed new light on a truer, more beautiful, more prudent kind of fiduciary responsibility. He offers an alternative vision to the dusty old industrial concepts of the nineteenth and twentieth centuries, when dollars, and the businesses they financed, lost their connection to place; slow money, on the other hand, is firmly rooted in the new economic, social and environmental realities of the 21st century.

Inquiries into the Nature of Slow Money is a call to action for designing capital markets built around, not extraction and consumption, but preservation and restoration. Is it a movement, or is it an investment strategy? Yes.

Quote:
 

Opening Prologue

“Mr Gandhi”, a reporter asked during Gandhi’s 1930 visit to England, “what do you think of western civilization?”

“I think it would be a very good idea”, he replied.

I did not want to start this book with a reference to Gandhi. I really and truly did not. Having been in and around the sustainability movement for a few decades now, I’ve heard enough Margaret Mead and Gandhi and Einstein quotes to last several lifetimes. But if Tom Robbins can start a novel with a reference to a beet, then anything goes.

I am making light, because the subjects at hand are ponderous, because I have an inveterate scepticism when it comes to the lifeless and humourless prognostications of the experts, and because I have had it up to ~ here! ~ With the opaque, impersonal, deathly dull dismalness of the dismal science of economics. In our search for answers to the great questions of the day, we would be well served to listen less to economists and more to philosophers, poets, ecologists, entrepreneurs and farmers.

To see what might lie beyond the Era of Economics, we must look above the top line and below the bottom line. I mean this almost literally. Above the top line is the region of the “meta”, what E.F. Schumacher called meta-economics. Below the bottom line is the territory of the “sub”, as in subterranean, not in the sense of journeying to the centre of the earth or anything that science-fictional, but something equally fantastic and preposterously too non-commidifiably invisible to the modern and post-modern mind: the rich, symbiotically phenomenal, mysteriously fertile life of soil.

“A very good idea” would be a civilization that did not strip its topsoil, turn it into cheap food and highly processed food products of highly questionable nutritional value, and put its faith in markets at the expense of places.

Civilization is a big idea. So is the idea that as soil goes, so goes civilization. So is the idea that as money goes, so goes the soil.     

{Continued ...}

 

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