Bringing Money Back to Earth
Slow Money: “Nurture Capital” for Communities & the Environment
"Woody Tasch is a financier with an idea, and it’s a humdinger. Since the government isn’t too interested and industry is too self-interested, he argues, we need to assemble a new type of investment structure and put money directly into sustainable farming. He calls it Slow Money, inspired,as he explains below, by the Slow Food movement and by realizing that the dizzying speed of money flows in the 21st century has ripped finance away from its moorings in reality. Tasch proposes the opposite: invest in food systems down the road, slow the money down, and watch it do things in the real world.
More compelling still, Tasch has the experience to back it up. He is chairman emeritus of Investors’ Circle, a nonprofit network of angel investors, venture capitalists, foundations and family offices. Since 1992, Investors’ Circle has moved $130 million to 200 early-stage companies and venture funds dedicated to sustainability. Before that, Tasch was the treasurer of the Jessie Smith Noyes Foundation."
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This is potent, we’re not talking about a progressive publication like Mother Jones — this is The Economist. The story was about the fact that leading people on Wall Street are beginning to admit that the efficient market hypothesis no longer describes reality. It can’t be relied upon. It’s not working. Then I ask the audience, “How many people think this sounds efficient? We have $500 billion of private foundation assets in this country, and I’d like you in the audience to guess what percentage of those assets is granted to sustainable agriculture groups every year.” It’s a bit of trick question because it’s a percentage of the assets, not a percentage of the grants, but both numbers are very low. Anyway, people guess and then I say, “OK, don’t tell me your number, divide it by ten, and now tell me your number.” Usually I hear 0.1 percent, and it’s still off by a power of ten — the actual figure is a hundredth of a percent. A hundredth of a percent of the assets of U.S. foundations is given as grants to sustainable agriculture groups, meaning about $50 million total U.S. grant budgets to sustainable agriculture. Then I zoom back and again ask how many people think that’s efficient. What is the market actually efficient at? It’s not efficient at solving the problems that our survival depends on at this point — it’s very efficient at propagating capital, but where the capital goes, how it’s distributed, what it’s used for are grossly and frighteningly inefficient. That’s how we weave the bigger money questions together with the food question.
Slow Money is definitely about local food systems and about organics and soil fertility, that’s our core. It is about food but it’s also the recognition that real structural alternatives on a macro-economic level are desperately needed, and they are not going to come from Wall Street.
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More compelling still, Tasch has the experience to back it up. He is chairman emeritus of Investors’ Circle, a nonprofit network of angel investors, venture capitalists, foundations and family offices. Since 1992, Investors’ Circle has moved $130 million to 200 early-stage companies and venture funds dedicated to sustainability. Before that, Tasch was the treasurer of the Jessie Smith Noyes Foundation."
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"what would the world be like if we invested 50 percent of our assets within 50 miles of where we live?”
"We’re not investing in farm land, we’re not saving organic farms or small farms, and we’re not building local processing, we’re not supporting restaurants that source locally, we’re not building infrastructure for farmers markets, and we’re not helping CSAs expand. It’s quite a list of things that people who know about the state of agriculture very quickly understand are components of a healthy local food system from a business standpoint. We’re talking about entrepreneurship. We want to support the entrepreneurs, including farmers. We want to give these entrepreneurs the capital they need to grow their small food enterprise. If the money is not doing that, which it isn’t right now, how are we ever going to get there?
...the whole issue of the efficient market hypothesis is now under question on Wall Street. I usually hold up a recent issue of The Economist that has on its cover a picture of a textbook that was falling over and melting into the desk, and the title of the textbook is Modern Economic Theory.
...the whole issue of the efficient market hypothesis is now under question on Wall Street. I usually hold up a recent issue of The Economist that has on its cover a picture of a textbook that was falling over and melting into the desk, and the title of the textbook is Modern Economic Theory.
This is potent, we’re not talking about a progressive publication like Mother Jones — this is The Economist. The story was about the fact that leading people on Wall Street are beginning to admit that the efficient market hypothesis no longer describes reality. It can’t be relied upon. It’s not working. Then I ask the audience, “How many people think this sounds efficient? We have $500 billion of private foundation assets in this country, and I’d like you in the audience to guess what percentage of those assets is granted to sustainable agriculture groups every year.” It’s a bit of trick question because it’s a percentage of the assets, not a percentage of the grants, but both numbers are very low. Anyway, people guess and then I say, “OK, don’t tell me your number, divide it by ten, and now tell me your number.” Usually I hear 0.1 percent, and it’s still off by a power of ten — the actual figure is a hundredth of a percent. A hundredth of a percent of the assets of U.S. foundations is given as grants to sustainable agriculture groups, meaning about $50 million total U.S. grant budgets to sustainable agriculture. Then I zoom back and again ask how many people think that’s efficient. What is the market actually efficient at? It’s not efficient at solving the problems that our survival depends on at this point — it’s very efficient at propagating capital, but where the capital goes, how it’s distributed, what it’s used for are grossly and frighteningly inefficient. That’s how we weave the bigger money questions together with the food question.
Slow Money is definitely about local food systems and about organics and soil fertility, that’s our core. It is about food but it’s also the recognition that real structural alternatives on a macro-economic level are desperately needed, and they are not going to come from Wall Street.
Read More...
+10, Bob. I'm all for it. I am already doing everything I can do divest myself from The Corporation. Where do we start with an Alaskan-local currency?
ReplyDeleteGood question, Iaato. Perhaps start by seeing who might be interested in forming a study group to explore it, to see what type of system might make the most sense? Perhaps a LETS system (software based accounting, no scrip?) http://www.letslinkuk.net/software/
ReplyDeleteHere's a list of U.S. communities already doing it. Maybe contact some of them? http://en.wikipedia.org/wiki/List_of_community_currencies_in_the_United_States