[Ccpg] Is Slow Money the future of Finance? A seasoned investor suggests putting your money where your meal is
Wesley Roe and Santa Barbara Permaculture Network
lakinroe at silcom.com
Thu Dec 4 08:49:52 PST 2008
Is Slow Money the future of Finance?
A seasoned investor suggests putting your money where your meal is.
http://green.msn.com/Green-Living/Is-Slow-Money-The-Guture-Of-Finance/1
By Jean Weiss
MSN Green
Updated: 11/11/2008 9:27:00 AM
You need only look as far as your latest 401k statement to grasp the
profoundly personal implications of the sub-prime mortgage collapse.
Yet you may not have linked this crisis to your local food system.
For Woody Tasch, founder of the slow money movement and author of the
book Inquiries Into the Nature of Slow Money (Chelsea Green, November
2008), the relationship between capital and soil is clear. Tasch is
the chairman of Investor's Circle, a network of investors that meets
this week in Boston to fund startups that focus on sustainable
business practices. In Slow Money, Tasch suggests a financial
paradigm shift that mirrors the tenets of the slow food movement:
valuing local food systems over global, industrialized food systems.
We caught up with Tasch this week to talk about why slow money may be
a long-term solution to sustainable finance.
MSN.com Green: This is a big concept for those new to the idea of
scaling back our investment expectations. How would you describe what
slow money means?
Tasch: It means we have to find ways to steer meaningful quantities
of investment capital and sustainable capital to build local food
systems. Essentially, to prioritize places over markets. There is
such a thing as money that is too fast, companies that are too big,
intermediation that is too complex. Slow money enables the financial
and cultural transformation toward rebuilding social and
environmental relationships that industrialization has destroyed.
MSN.com Green: Why would this be a leap for most investors?
Tasch: Most food companies have limited growth potential. And
investors are trained to focus exclusively on markets and sectors,
rather than on places. Slow money poses the question: What would the
world be like if everyone invested 50 percent of their assets within
50 miles of where they live?
MSN.com Green: How do you see the link between food, soil and capital?
Tasch: This connection can be a beautiful wake up call. Soil is
tangible, it's very grounding, and yet it also has a bit of mystery
to it. Nutrients connect from the soil up to the food. There's a
certain epicurean, artisan, heirloom aspect of food. There is an
element of pleasure, of conviviality. If you understand how important
food is, you realize our environmental concerns are not just about
parts per million of carbon in the atmosphere. It's also about soil
fertility. Since World War II, we have been rapidly mining our soil
in order to produce cheap industrialized food. In the long term, this
type of investment leads to fiscal and environmental collapse.
MSN.com Green: A sense of connection seems significant in this
equation. How can we create connection between people and their money?
Tasch: That's a great question. Slow food is about connecting food
producers and consumers. Slow money is about connecting investors to
that in which they are investing. Once you realize how disconnected
everything is, you want to reconnect. So if you think about
investing, where does your money go? It goes into a mutual fund,
which might as well be a black hole or cyberspace. Once it goes out,
it really isn't yours anymore. It is out in the market. Think of a
portion of that dollar going up a smokestack in China. Either
directly or indirectly, your dollars are supporting a system based on
unlimited economic growth. So if you reconnect investors to those
impacts, it makes people realize that how they use their dollars is a
direct vote for or against sustainability.
MSN.com Green: How does the idea of slow money link in with the
subprime mortgage collapse and our current economic situation?
Tasch: We just experienced a death knell for industrial finance, a
finance of hyper-securitization, divorced from how and where people
live. The question is, how do you interpret that death knell? No one
really knows. We set up a system of finance, starting 500 years ago,
to explore and exploit the New World. Now we are bumping up against
the limits of that system. The collapse is a major signal that the
system cannot endure.
MSN.com Green: Is slow money the next financial paradigm?
Tasch: Slow money is part of a response, not a direct response, not
an antidote, but part of a deeper response by a group of people
saying 'Hey, we can't push the reset button, ride out the storm,
hunker down.' Slow money is an attempt to put a healthy system in
place now so that a generation from now it will make a meaningful
difference.
MSN.com Green: How do you transition from a philosophy to a strategy?
Tasch: We are holding a series of institutes, starting with three
regions: Vermont, Kentucky and Northern California. We're bringing
together food entrepreneurs, farmers, investors and philanthropists,
and seeing how people think the concept would work in that region.
We're talking about understanding small food enterprises, or "SFEs",
as a new asset class. SFEs include CSAs, slow-food restaurants, local
dairy and meat processing facilities and regional organic brands.
We're also looking at investing in small organic farms in the region.
We believe that highly diversified portfolios of these investments
will generate modest but predictable long-term returns that will look
increasingly attractive in the years to come.
MSN.com Green: To save our economy and our environment, you've said
we don't need big ideas, we need small ideas. Can you explain that?
Tasch: Long-term health depends on diversity, cultural, biological
and economic diversity -- lots of small things, decentralized. Manure
is great, as long as it isn't concentrated. Money is the same way. If
it gets too concentrated, it gets toxic. Small farms are the
microorganisms. We need a lot of these small food enterprises and
farms to have a healthy system.
MSN.com Green: In your book you say it makes more sense now to listen
to philosophers and poets than to economists as we look toward the
future. Why?
Tasch: We are so inundated by data, and bytes, and bits, and blurbs,
and numbers, and abstract formulas and stock quotes every second.
Poetry explores new meaning and ways to see patterns of meaning. It
forces you to slow down. You can't read a poem fast, it isn't just
data. You could say that poetry creates new mental rocks that the
stream of consciousness has to flow around. We are at a time where we
need to see new patterns rising around a myriad of things. We are
lost in a blizzard of data. We need a larger, slower view of where we
are headed. I don't think we can find our way by analyzing more data
or developing new financial tricks. In this sense, slow money is
about returning to fundamentals, but defined in terms of the
realities of the 21st century.
MSN.com Green: What are the consequences if we don't adapt?
Tasch: We are destroying the life systems on the planet. We know we
are on a bad course. There are 2 billion people benefiting from the
current economic paradigm, but billions of others cannot get access
to these benefits, and future generations will be precluded. Not to
mention the cost to other species. If we are smart enough to turn
this around, if we can rise to the occasion. This is the part that is
too easily overlooked: Restraining our destructive behaviors and
shifting to new, restorative patterns
will be beautiful and ennobling, not demeaning and diminishing.
MSN.com Green: What aspect of slow money do you think will be the
most difficult for people to adapt to?
Tasch: We're all about speed. We've been addicted to speed for 100
years, starting with the car, rocket ships, cyberspace, how fast
things can be transmitted. We know fast food is not healthy, yet we
still eat it. Addicts know they are wrong, but changing their
behavior is extremely difficult.
How to Invest Your Money in Local Food
If you are looking to slow down, or even park, your money locally,
Tasch has a few simple tips. Right now there aren't yet any slow
money intermediaries, though he hopes to eventually have in place
funds that represent slow money ventures by region. Still, here are a
few ways to start adapting strategies for slow money.
Tip One:
Support your local farmer. Tasch says that joining a CSA (community
supported agriculture) is one of the most direct ways you can invest
your money in local food. "Investing in a local farmer is an easy way
to put a little of your money to work," he says. "It has a huge
social impact, we shouldn't underestimate the impact of small things."
Tip Two:
Bank with the local credit union. Your neighborhood financial
institution may already be investing in local food systems, so check
them out and put your dollar there if you can, says Tasch.
Tip Three:
Buy local foods first. Tasch suggests dining at restaurants that
serve local food, shopping at farmers' markets and selecting local
foods over foods that have traveled far to make it to your grocery
store.
Tip Four:
Keep slow on tap. Stay updated on the slow money movement through
Investor's Circle, a group that meets twice annually to invest in
triple bottom-line companies (people, planet, profit). Right now, IC,
the Blue Moon Fund and 35 venture capitalists have signed on to
pursue slow money. To more fully understand the concept, check out
the slow food movement. Find out what is going on in your community
with slow food and develop a clearer connection between you, your
food, your local farmland and your money.
Jean Weiss is a regular contributor to MSN.com.
GreenMoney Journal - publishing since 1992
Fall 2008 issue
tp://www.greenmoneyjournal.com/article.mpl?newsletterid=44&articleid=604
GreenMoneyJournal.com
Slow Money, Manure and Prudence
By Woody Tasch
We have, of late, begun to get religion about carbon in the
atmosphere. We have begun to pour venture capital into clean tech,
searching for ways to maintain our lifestyles and grow the economy,
while dramatically reducing our ecological footprint. This vision of
ecological footprint is, in a great many respects, a mechanical one,
asking only: How can we design new machines that work more cleanly?
No one, it seems, is asking a corollary question: If we cannot create
wealth without degrading soil fertility and draining the vitality out
of local economies, how can we, no matter how clean our machines,
hope to thrive, or, even, survive?
Last August, at the 25th Anniversary Gala for the Rocky Mountain
Institute, eminent panelists tried to answer yet other questions,
posed by moderator Thomas Friedman: "If this is a win-win-win, if
these new technologies and design solutions are so elegant and so
profitable and so clean, what is holding them back? Where is the
resistance to these innovations coming from?" To my surprise, since
this was not a finance conference, the group discussion zeroed in on
CEO compensation, short-sighted financial incentives and the
structure of capital markets.
Inventor Dean Kamen opined from the dais:
Venture capitalists have great enthusiasm but short attention spans.
We are stuck in a 19th century way of thinking that leads to
largescale, centralized production and power generation. We don't
have the mindset to really invest for the long-term in small-scale
solutions that would improve life for billions of people.
Such questions and observations lead to the premise for a new kind of
financial intermediation, going by the improbable name of slow money.
That premise is this. The problems we face with respect to soil
fertility, biodiversity, food quality and local economies are not
primarily problems of technology. They are problems of finance. In a
financial system organized to optimize the efficient use of capital,
we should not be surprised to end up with cheap food, millions of
acres of GMO corn, billions of food miles, dying Main Streets, a dead
zone in the Gulf of Mexico and obesity epidemics side by side with
persistent hunger.
Speed is a big part of the problem. We are harvesting from the soil
in decades fertility that was created over millennia. We are
extracting generations-worth of economic and cultural vitality from
our communities. We are acting as if the biological and the agrarian
can be indefinitely subjugated to the industrial and the urban
without significant consequence. We are, as the colloquial saying
puts it so eloquently, beginning to believe our own bullshit.
Which reminds me of a story...
About 15 years ago, I was turning a horse stall into my office. My
first project was to shovel out the dried horse manure and shovel in
sand, in advance of the construction of a wooden floor.
One day, reflecting on the transition from equine to intellectual, I
realized, "How appropriate: from horseshit to bullshit."
No consideration of the disconnect between capital markets and the
land is complete without at least one reference to manure.
o
If slow money is going to be effective, it is going to be in part due
to inspiration derived from the celebratory, life-affirming, pleasure
inducing humanism of Slow Food.
Slow Food began as a protest against McDonalds, but it quickly
evolved from a single act of protest into an international NGO, on
the strength of a family of pro-biodiversity, pro-small farmer
initiatives dedicated to restoring and preserving quality of life.
Similarly, slow money seeks to support the creative power of
entrepreneurship to build new commercial relationships that enhance
quality of life for farmers, food consumers and their communities. In
a world of monoculture and special interests, the emergence of
for-profit social entrepreneurs, whose companies integrate private
enterprise and public benefit, is particularly intriguing, and worthy
of support.
Just as is the case with Slow Food, slow money needs an approach that
dares to be cultural, agricultural, economic, historical and
biological. We will need to fight against over-specialization,
putting the jargon of the specialist, the technician, the quant in
its place. We will need to define new benchmarks, being unafraid to
assert the importance of qualitative distinctions.
oo
"Money only knows one speed," the scion of one of America's
wealthiest families once said during a public discussion. "Money only
goes fast, faster, fastest. Try to slow it down, and you'll just end
up with sloppy investing."
To which I say: If insanity is doing the same thing over and over
again hoping for a different outcome, then it is insane to think that
by continuing to create wealth via an extractive system, so that we
will have more money to give away, we will be able to adequately
address the urgency of the current global moment. Both unfettered
fast money, and its twin, philanthropy, which has an odd non-speed
all its own, create and depend upon broken social relationships. We
must seek to build an economy in which healthy relationships remain
integral to the wealth creation process.
Prudence-as in the Prudent Man-can no longer be defined completely by
tens of billions of dollars of fast money pouring into high-tech
venture deals. Such prudence is incomplete.
We must find new ways to steer capital to tens of thousands of
independent enterprises that promote the health and diversity of
communities and bioregions. For every $1 billion that zooms around
the planet-or is it cyberspace?-looking for the highest return and
lowest risk, and supporting globalization, consumerism and unlimited
economic growth, we must invest $10 million or $100 million in
enterprises that support what is going by many names: virtuous
globalization, localization, local living economies, natural
capitalism, restorative economics.
Reconnaissance with respect to this new prudence comes from author
Michael Pollan in a recent New York Times Magazine article:
The story of Colony Collapse Disorder and the story of drug-resistant
staph are also the same story: Both are parables about the
precariousness of monocultures. Whenever we try to rearrange natural
systems along the lines of a machine or a factory, whether by raising
too many pigs in one place or too many almond trees, whatever we may
gain in industrial efficiency, we sacrifice in biological resilience.
The question is not whether systems this brittle will break down, but
when and how, and whether when they do, we'll be prepared to treat
the whole idea of sustainability as something more than a nice word.
Pollan reminds us that the particular challenges that face us in this
or that sector of food or energy or health actually have much deeper
roots, reaching all the way to an historic struggle between the
industrial and the biological. His reference to parable is telling.
As easily, he could have referred to myth.
We are quick to assume that no battle between myths, or no myth at
all, could hold sway over the modern mind. Yet could it be called
anything other than myth, the story that is powerful enough to have
us believing that unlimited economic growth is not only possible but
desirable, despite the rapidly accumulating data to the contrary?
What else but a myth could be powerful enough to convince us that
what made sense as an economic organizing principle in a 1 billion
person planet or a $1 trillion dollar global economy would still be
appropriate in a 6.4 billion person planet and a $24 trillion dollar
global economy? What else but a myth could be powerful enough to
convince us that there is no such thing as a company that is too big,
intermediation that is too complex or money that is too fast? What
else but a myth could make the violence of the modern economy
invisible to the modern investor?
ooo
I believe that social investing can best be understood, with its
roots in Quakerism and anti-apartheid divestitures, as an expression
of the ethos of non-violence in the context of fiduciary capitalism.
Of necessity, this expression manifests itself in partial
adaptations, pragmatic mutations and imperfect applications. Lots and
lots of half-steps. After all, who can ignore how daunting it is to
look at the Fortune 500 or the Russell 5000 and think: What would I
invest in if I really wanted to do no harm?
Our success in moving beyond half-steps depends upon acknowledging,
unabashedly, without scapegoating, without undue recrimination, and
with a commitment to looking forward, the violence of the modern
economy.
This is the violence of the modern economy: by prioritizing markets
over households, community, place, land, it does violence to the
relationships that underpin health and that give life sustaining
meaning-family relationships, community relationships, relationships
to particular places, relationships between consumers and producers
and between investors and the enterprises in which they invest,
relationships between companies and the places in which they do
business, relationships between wonder and awe and the universe that
gave us plutonium, light-years, fertility, sentience, poetry, fugue.
All of these relationships are attenuated, or, in the extreme,
deracinated, by the modern, global economy.
This is violence of the most fundamental kind. It is no accident that
such an economy would find it easy to support, and to depend upon,
the building of nuclear weapons, the waging of wars in distant lands,
the selling of cigarettes, the flying of trillions of air miles, the
commodification of leisure, urban and suburban sprawl, gated
communities and favelas, toxics in the food and water, and kids who
watch an average of four hours per day of TV, paying more attention
to instant messaging than to people in the room.
In these first few decades of the 21st century, it is our
"inescapable duty," to use Wendell Berry's words, to change not only
our light bulbs, but our myths. And along with them, our concepts of
entrepreneurship, investing and philanthropy, which will have to be
amended, expanded, and, perhaps, even radically transformed, as part
of a new vision of restorative economics.
Article by Woody Tasch, Chairman and President of Slow Money, which
is currently holding Slow Money Institutes in several U.S. regions,
in anticipation of launching a first Slow Money fund in 2009. He is
also Chairman of Investors' Circle ( http://www.investorscircle.net )
and author of the forthcoming book "A Bee's-Eye View and Inquiry into
the Nature of Slow Money," which is due out fall 2008 from Chelsea
Green.
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