Getting Beyond Growth at Any Price
By Ted Wysocki Posted on April 9, 2013
The Resilience Imperative: Cooperative Transitions to a Steady-State Economy, by Michael Lewis and Pat Conaty. New Society Publishers, 2012, 400 pp., $26.95.
I must admit that until now resilience was not a word in my regular vocabulary. Given the challenges of pursuing community development with public and private sector partners, I usually use persistence and tenacity to describe our nonprofit sector attributes. However, resilience made #6 on The Chronicle of Philanthropy’s Top 10 list of buzzwords for 2012 because it is quickly replacing sustainability. The Chronicle article notes that with all the changes affecting nonprofits in the world, focusing on adaptability and bouncing back is a good idea.
In The Resilience Imperative, authors Michael Lewis and Pat Conaty offer a scientific definition of resilience as “the amount of change a system can undergo (its capacity to absorb disturbance) and essentially retain the same functions, structure and feedbacks.” Given the prevailing aftermath of our global economic crisis and the ignoring of climate change, the authors have convinced me it’s resilience that is essential for our future.
Lewis and Conaty challenge each of us to use “Social, Ecological, Economic” lenses to “SEE” change and to fulfill the imperative of seeking strategic pathways by sharing what we are learning in order to secure the innovations that are getting results by scaling up and broadening their applications. They call for “cooperative transitions to a steady-state economy.” We can no longer afford growth at any price.
The fundamental question that The Resilience Imperative poses is one that the authors credit to ecological economist, Hazel Henderson: Growth for whom and for what? This question has been asked consistently throughout the history of community development here in the United States.
Lewis and Conaty advocate an economic strategy that “values diversity, is decentralized, additionally broadens, localizes and democratizes ownership in the economy and in turn widens the distribution of benefits, including the extension of democratic control over the commons of land, the corporation and finance.” Too often confirmed by daily news reports, increasing debt and carbon levels are, as the authors contend, “rendering communities, nations and the global economy and the biosphere more and more vulnerable to catastrophic events.”
Yet, the cycle continues unquestioned as “economic growth is required more and more to pay back escalating levels of debt, which has sky rocketed over the last four decades. Growth continues to be dependent on fossil fuels. Thus, financial debt is a major contributor to our ecological crisis and socially, contributes significantly to increasing inequality and poverty.”
Debt-based money creation and compound interest are targeted by the authors as key culprits contributing to the problem. We must remember that the origins of community reinvestment initiatives were also accompanied by financial services deregulation in the 1970s which removed the caps on interest and “marginalized usury laws that historically provided legally enforceable and transparent speed limits on creditors.”
The book connects the dots between shelter, food, energy, and different forms of structuring property rights, ownership and finance with innovative strategies for a “Solidarity Economy” based on the shared “values of social justice, inclusiveness, ecological sustainability and deeper, democratic forms of participation.” It covers a breadth and depth of economic thought that merits the investment of time just for the history lessons alone. It addresses how little is understood about the hidden power of land, capital and ownership, with real and practical case studies of decommodifying land, moving financing from compound interest to fee charges, radically reducing energy waste, and creating a second source of income (besides wages) through forms of trusteeships.
The authors bring these lessons home with a running tally of savings for an average Canadian family, the Hartwicks, as they deploy and integrate these strategies. In a concluding table, the Hartwicks can save over 25 years almost the full price of their $371,000 home through using a land trust, a fee-based loan and energy conservation. The authors cite research that the exponential impact of compound interest embedded in the economy may make up close to 35 percent of a hidden cost structure that benefits the financial industry rather than our local economy and families’ fiscal health.
The analysis offered by Lewis and Conaty is so distinctive because rarely are land reform, corporate reform, and capital/monetary reform discussed outside of their separate silos. They challenge the reader to “SEE” the sum of these reforms as a transition that is imperative for our collective future.
Particular case studies that drew my interest include:
Interest-Free Lending as managed by Sweden’s JAK Cooperative Bank (an acronym for Jord Arbete Kapital or Land Labor Capital); Community Land Trusts as established by Vermont’s Champlain Housing Trust; Eliminating “Fuel Poverty” (spending more than 10 percent of household income to keep your home adequately warm) as demonstrated by the UK’s Kirklees Energy Services, a not-for-profit social enterprise; and Community Economic Development as implemented by Montreal’s Regroupement Economique et social du Sud-Ouest (RESO) and Maine’s Coastal Enterprises Inc. (CEI).
Cooperative Land Banks are proposed to transform property rights in order to capture for community benefit the uplift in land values created by public investment in infrastructure. Another benefit cited is making it more difficult for speculators to sit on properties, an especially pertinent strategy to combat vulture investors now swarming over communities plagued with foreclosures by predatory lenders.
Honest self-reflection would admit that our efforts for banking reform are still falling short and we have yet to adequately address or even consider the land reform and corporate reform necessary for a just economy.
Chapter 8’s title — Convivial Banking — may seem to be a relic from the past or a current oxymoron. But the authors share as seeds for transition how the UK is developing new initiatives for community banking partnerships to address the multiple needs of low-income households and patient equity investments for social enterprises through “withdrawable share capital.”
As the authors implore us, community development lenders should revisit and seek to replicate successful interest-free and fee-based lending practices outlined in The Resilience Imperative that either charge low rates of interest or replace interest entirely with fees for service and risk cost premiums.
Ecological economics holds the answer, they assert, since the single most powerful lever available is price. They insist, “We must price the social damage we are causing ourselves and the ecological damage we are inflicting on the planet.” They implore us to:
Expand our investment in green infrastructure; Radically reduce the costs of compound interest; Implement broad land reform; Reclaim our lives from the moneylenders and speculative developers; and Ensure shared ownership under a diversity of trusteeship companies and Community Land Banks.
As the authors stress, we all face the formidable challenge of:
“combining the community and social banking parts into more visible and powerful consortiums that can be federated to shape public discourse, social investment policy, and priorities…. What is missing is leadership to bring diverse networks together, forge intensive cooperative links, mobilize a social/ecological justice vision, and develop creative ways to deliver knowledge capital through dynamic services that make money our servant and no longer our master.”
These may be particularly difficult times to achieve national policy support here in the United States for the reforms that Lewis and Conaty advocate. But in the meantime, we can certainly pursue local innovations and cooperative alliances to demonstrate what real change can accomplish.
Ted Wysocki has launched U2Cando, a consulting practice based on his 40 years of community development experience. He is also an Affiliated Consultant with the Economic Development Assistance Consortium. Ted was CEO of the Local Economic & Employment Development Council, now North Branch Works, in Chicago for 12 years. Previously, he was CEO of the Chicago Association of Neighborhood Development Organizations (CANDO) for 17 years. He started his community development career in 1974 with Gale Cincotta, the mother of the Community Reinvestment Act. Ted is a director emeritus of the National Community Reinvestment Coalition.