permaculture

[Wesley Roe and Santa Barbara Permaculture Network <lakinroe@silcom.com>]

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.