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Slow Money

Woody Tasch, author of Slow Money, is making a surprising change of course. In the world of capital risk he comes from, he now puts financial capital at the service of social capital. He visits a region, brings together its leaders in sustainable agriculture, evaluates the social capital at hand, and then, in the next step, secures needed financial capital. Inspired by E.F. Schumacher, he asserts that the economy is not the end, it is a means. But in this era we have made it an end in itself. In order to transform its meaning, we must reaffirm values that are beyond those of economics. Which values? Arguably, ninety-nine percent of people would agree easily on a response to this question: Motherhood, apple pie – it goes without saying, but also healthy communities, healthy families, a better world for future generations, ethical behaviour, and moral responsibility.


Why do we have the capital markets we have? We created these markets because of the particular historical juncture we were at the time. Capital markets and our version of modern corporations and shareholder entitlement and fiduciary responsibility all came from the same mindset that started around 1500, picked up steam during the Industrial Revolution, and took off in the last half of the 20th century. And it’s all about conquest and exploration and exploitation, extraction and consumption and economic growth and standards of living – all of those things together. We created a financial system that optimized for the flow of capital, reduced the risk to capital, and created ways for capital to flow quickly. At every stage we tried to optimize for faster and faster capital, so we could have more and more economic growth and more and more technological innovation, more risk taking, and more “progress” as defined by the economy.

Now we're at a new juncture, and we have to create a different set of capital markets. The current collapse is a warning sign that we can’t continue that historical model anymore. The words "restoration" and "preservation" for me capture the values proposition that you raised. We need to move from capital markets based on consumption and extraction to capital markets based on restoration and preservation. You can call the new markets values-driven, but I would say that they are just getting down-right practical. It’s just recognizing that where we are in history, we have to behave differently if we want to survive—much less live by higher ethical standards. The crucible of global warming and environmental degradation and terrorism and all of these nested issues basically collapses, in my opinion, survival instincts and ethics. I don’t think these things are different anymore. We just have to start acting differently for all kinds of reasons at the same time.

We are at the beginning of that invention process. How would we have a stock market that wasn’t built around maximum shareholder profits over the short term? How would we have companies that more explicitly gave away more of their profits to stakeholders rather than just to shareholders? I think these things are going to happen. There is a lot of energy out there for fundamentally realigning things.


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Jacques Dufresne's

The editor of L'Encyclopédie de L'Agora and well known newspaper chronicler and philosopher, analyses actuality through the looking glass of Belonging.
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