Slow Money: Bringing Money Down to Earth
Woody Tasch has thought a lot about money: what it does, how it moves, and how to connect people who have it with people who need it. He's been a venture capitalist, a treasurer and advisor to foundations, and the chairman of a network of angel investors. He even helped found a field of investing with the rather surprising name "community development venture capital."
But he found that even socially responsible investing couldn't do much to fix an economy that focused too much on extraction and consumption and too little on preservation and restoration.
In 2008, Tasch wrote Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered. Soon after, he founded the Slow Money Alliance, an NGO devoted to the principles of slowing money down, reconnecting it to the Earth, and respecting carrying capacity, the commons, sense of place, and nonviolence. Tasch calls it the transition from "Making A Killing" to "Making a Living."
YES! Magazine Web Editor Brooke Jarvis spoke with him about "nurture capital," local food systems, and why we all may soon be thinking differently about money.
Brooke Jarvis: What does the Slow Money movement mean by slowing money down and bringing money back to Earth?
Woody Tasch: Three trillion dollars a day zooms around the planet in currency markets alone. Our current financial system has, by cutting money off from people and place, allowed it to start circulating at such crazy speeds and in such complexity that no one can really understand it anymore. Even the experts don’t understand the consequences of what’s now going on. The derivatives and sub-prime mortgage mess is just one manifestation of that.
The way we slow money down is by bringing it down to Earth: connecting it directly to the land and to places where investors live. As long as how you’re investing is completely disconnected from where you live—meaning it’s just dictated by distant markets, distant companies, abstract securities—then the money can kind of circulate in this wild, crazy, volatile, and ultimately destructive fashion. If you bring money back down to Earth, connecting it to the place where you live, and all the way to the land itself, then you will be slowing money down and having a healthier outcome for all concerned.
Brooke: How does Slow Money propose to bring money back down to Earth?
Woody: Members contribute financially to Slow Money, and we use that money as seed capital to build what we’re referring to as the “nurture capital” industry, putting it to work via intermediaries all across the country that are connecting local investors to local food enterprises in those regions. The idea is to build a financial infrastructure around the country that would make it easy for individual investors to put their money to work supporting food in their own communities. Right now, that infrastructure doesn’t exist.
Of course, developing that infrastructure depends on our ability to raise money in the manner that we’ve set out to do it. We’ve just announced a very audacious goal of trying to get a million people to sign the Slow Money principles, on our way to a million members of the Slow Money Alliance. This would be a major accomplishment, and we are taking the first steps toward that long-term goal.
Brooke: Your focus is on using “nurture capital” to develop local food systems, but do you also see this model being able to expand to fund things like worker-owned cooperatives or community lending institutions?
Woody: Absolutely. We’re starting with food for a number of reasons. We’re very inspired by the Slow Food movement because it’s a beautiful, cultural, very positive, humanistic approach to a whole bunch of terrible problems. Biodiversity, heirloom plants, indigenous culture, community health—all are addressed very beautifully by Slow Food, and so we’re very inspired by that. That’s one of the reasons we’re starting with food.
Another reason is soil fertility. Our food system produces relatively inexpensive and plentiful food because it extracts fertility from the soil that it took millennia to make. The World Watch Institute calls that the quiet crisis of the 21st century. We are rapidly degrading soil organic matter and topsoil. We’ve all started getting religion about carbon in the atmosphere, but we haven’t really focused on carbon in the soil.
Food is a very important place to start, but it’s obvious that once you begin thinking about money this way and begin deploying it this way, you see that it’s needed in a whole bunch of other sectors of the local economy, whether it be energy, smart transportation or smart development, green housing, independent media, or community health care.
Brooke: You have been involved in foundation work, community investing, venture capitalism—many different ways of injecting money into the system. What was missing that you’re hoping that Slow Money can provide?
Woody: Joseph Stieglitz, a Nobel Prize-winning economist, says that we’re not fixing the structural problems of the economy because we don’t know what the structural problems are. Governments of the world just threw tens of trillions of dollars of stimulus money at the economy. If you think of the economy as a big, leaky vessel, they dumped all this money in and it’s going to take a long time for it to leak back out, but they didn’t actually fix the vessel.
Angel investing, mission-related investing for a foundation, socially responsible investing, watching the triple bottom line—all these different things—are all steps in the right direction. Now we’re moving toward what we have to invent next.
Slow Money is an effort—looking at one piece of the system, which is the food system—to begin fixing structural problems. We don’t just want to invest in the next wave of organic food companies, if we know that at the end of the rainbow, they’re all going to be acquired by multinational companies. We haven’t really designed an alternative system or fixed the structural problem.
The good news is that there are thousands of small food entrepreneurs who aren’t interested in growing companies that will become billion-dollar businesses owned by multinationals. What we’re trying to do with Slow Money is to match up that emerging group of businesses with investors who share their values, and let them do what they want to do.
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