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Posted January 15, 2009 12:00 AM
Bringing the cash crunch back down to earth.
It is good, it is appropriate that we use the left side of our brain to study markets and industry segments and capital flows, to measure risk and return, to mete out liquidity and diversification and various instruments designed to intermediate efficiently between producers, consumers, and the natural systems on which all life depends.
But it is even better, at this moment in history, to use the right side of our brain and our whole heart, and whatever portion of our spirit can be brought to the task, to take the first steps, new steps, imperfectly charted steps, toward the realm of slow money.
We need to steer money, in its primary applications, that is, in those functions toward which it is deployed in the making of money, toward life, toward enterprises that enhance the quality of life, that preserve and restore fertility, biodiversity, and the health of bioregions and communities and the households that live in them, and away from enterprises that degrade quality in the name of quantity. This use of money, of investment capital as an antidote to the disease of excessive quantification is, in the words of a veteran McKinsey consultant, “tricky.”
There is something of financial homeopathy in it. A drop of slow money under the tongue of the body economic: What will its effect be on the health of the whole system? We cannot know, but we can assert and affirm our hope, our intimation that its effect will be salutary.
“We need to stop thinking about money as lubrication for a machine that is everywhere and nowhere at no given moment, and to start thinking about money as irrigation for the field of our intentions, which are expressed right here, right now, where we live and where we work. We need to stop giving priority to the imperatives of money’s explosive self-propagation and start giving priority to the imperatives of social implosion and impending ecological collapse.
Much of what the social investment initiatives of recent years are aiming at can be more directly, more fundamentally understood as a problem of the speed of money. Screened portfolios and shareholder advocacy work to heal the wounds caused by globalization and industrialization and corporatization. As critical as these means of redress are, most of their benefits are achieved not by slowing the economic speedboat down, but rather by minimizing some of its impacts as it speeds through the harbor.
Environmental degradation, a throwaway consumer culture, cheapened food (rich in empty calories and chemical additives), media programmers who live by ratings, nightly news reports that cover daily fluctuations of market indices – these are inevitable byproducts of an economy whose decision making is driven first and foremost by the imperatives of financial markets, an economy in which money, unleashed through the power of technology and unfettered by either connection to place or the human face of exchange, has taken on a life of its own, a speed of its own.
Fast money does violence to the web of relations on which the health of communities and bioregions depends.
It is not enough to steer money in new directions. We must slow money down.
We are surrounded by the explosive creation of wealth that drives venture capital.
Since its IPO in August 2005, Google’s stock price has shot up from $95 to more than $600, representing an increase in market capitalization from $25 billion to more than $200 billion. Google is the prototypical venture capital deal, the epitome of a process that bets billions of dollars per year on a few thousand technology companies. It is a symbol of virtually limitless upside. A Google search weighs nothing, is silent, and has, to its user, no immediate ecological footprint or cost – an apparently perfect manifestation of the Invisible Hand at work. Although it is possible to imagine a fiduciary asking, “How many McDonald’s are too many? Can the world sustain 50,000 McDonald’s and a trillion hamburgers?” it is impossible to imagine a fiduciary ever asking, “Would a trillion Google searches a day be ‘too many’?” Google is a portal to the world of unlimited upside, the world of unlimited information and entertainment, the world of unlimited shareholder entitlement.
It is deeply disturbing to stand at the edges of such extreme wealth, such extreme speculation – even when successful – and peer into the expanses of such unrelenting poverty: poverty of abandoned building and abandoned village and field abandoned to mall, poverty of slum and ghetto, poverty of pollution, poverty of congestion and sprawl, poverty of cheapness and impermanence, poverty of gated community and security system, poverty as if ordained by an invisible hand, poverty of the devalued and the overvalued, poverty of entire populations who produce little but consume much, poverty of the near and the real overtaken by the distant and the virtual, poverty of empty calorie and long shelf life, poverty of plastic, poverty of divorce and displacement, poverty of erosion, poverty of proliferating portfolios, poverty of market mania, poverty of irrational exuberance, poverty of affluence.
Our ability to redress this poverty in the 21st century will depend on our ability to look beyond wealth creation of the venture capital kind, to look across the boundary of for-profit and nonprofit, to look past market indices, and to discover more integral, truer, more beautiful measures of progress and well-being.
With appropriate vision, we will come to see each transaction, each investment not only as a tiny moment of truth, but also as a small but critical opportunity to choose beauty over convenience, beauty over competitiveness, beauty over uniformity, beauty over control, beauty over making a killing, beauty over caveat emptor, beauty over commodification. Experiments in slow money are experiments in beauty and nonviolence.
Beauty was good enough for the title of E. F. Schumacher’s seminal work, and it should be good enough for us. He could have chosen Small Is Appropriate, or Small Is Good, or Small Is the Key to Health and Happiness. He chose the word beautiful; his attention focused on issues of scale, nonviolence, self-sufficiency and a “meta-economic” understanding of man’s place: “Divergent problems, as it were, force man to strain himself to a level above himself; they demand, and thus provoke the supply of, forces from a higher level, thus bringing love, beauty, goodness, and truth into our lives. It is only with the help of these higher forces that the opposites can be reconciled in the living situation.”
The unrelenting exercise of the calculus of economics has facilitated the slide toward one-dimensional management decision making, ugly commercial landscapes, horribly littered media spaces, and dumbed-down public discourse. We have noted, and debated with varying degrees of heat, the Death of God. Some have even noted what they have called the Death of Money, as currency shifted from gold to paper to bits of information. It is the Death of Beauty that concerns us here.
Products produced cheaply create ugly work lives and ugly households and ugly communities. Profits produced quickly cannot purchase patience and care. Patience is beautiful. Restraint and care are beautiful. Peace is beautiful. A small, diversified organic farm is beautiful.
There is nothing beautiful in the idea that we will only do no harm if we can, in so doing, make as much money as is generated in the doing of harm.
Pioneering companies like Stonyfield Farm seek to capture increasing amounts of Wal-Mart shelf space for organics and responsibly produced consumer goods. Pioneering venture funds like Greenmont Capital provide venture capital to organic food companies.
These important enterprises redirect capital away from destructive industrial activity and toward restorative economic activity. However, they do not influence directly the speed of money or redefine directly the role of investors in the evolution of capital markets.
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