08021 Financial Permaculture, Slow Money, and Eight Forms of Capital

Too many people spend money they don’t have . . . to buy things they don't want . . . to impress people that they don't like. — Will Rogers

A primary characteristic of the mainstream economy is the extreme velocity of its financial transactions. Stock markets move so fast that computer programs execute many trades — no human intervention required or even wanted.

One of the most radical things that we can do with our money is slow it down and localize it. Instead of sending it to New York and Chicago and Los Angeles, we should endeavor to keep it at home, close at hand, for as long as possible. This starts when we keep our money in credit unions and locally owned banks who invest in the local community.

Permaculture author and consultant Eric Toensmeier defines financial permaculture as —

. . . the design and management of business and monetary systems that increase ecological health while meeting human needs. Financial Permaculture thinking can be applied to many different economic and business models, suited to specific circumstances and designed accordingly. More at http://www.financialpermaculture.com/cms/aggregator?page=1

The Financial Permaculture Institute is a group of people in Lewis County, Tennessee who have been exploring these ideas in their community for several years. About their work, they say —

The FPI’s primary finding have been that the most viable steps in our bioregion are towards creating more, healthier, and more regenerative local businesses, and empowering people to become regenerative investors. The task at hand, as we see it in our region, is the creation of businesses that turn a profit in the existing (and for the most part broken) financial system, and re-invest that profit into more regenerative projects and businesses in the local community. This strategy puts power back into the hands of local people, and has demonstrated the capacity to build a movement slowly and surely while still keeping an eye on the bigger picture of opportunities for whole-systems regeneration. Instead of focusing on policy change we seek to engender change on the personal scale to empower individuals, friends, family and communities to invest in projects that matter to them, to buy and bank locally, or within a clear ethical and strategic framework, and to concentrate on building businesses that build local and multi-local resilience. http://www.financialpermaculture.com/cms/aggregator?page=1

They identify four financial permaculture design principles:

Decentralization is better than centralization. The current financial system is linear and centralized, and is designed to continually further centralize power and wealth. We must find ways to decentralize power and wealth so that people within a given community can make well informed, well resourced, and locally appropriate decisions.

Participatory design is true democracy. By empowering people with the process and tools needed to take decision-making into their own hands, we tap into the wisdom and fresh thinking of previously unheard voices.

Land based businesses that use permaculture as a foundation of their design; production and distribution processes are the best investments and form the foundation of any viable long-term economy.

Financial Intimacy creates closely knit and resilience communities. Invest in local enterprise. Invest in the dreams you share with friends, family and community. Become a stakeholder in your vision for a better world.

They use two primary processes in creating successful businesses by permaculture design:

  • Participatory design, and
  • Holistic management.

Participatory design utilizes group processes to involve the stakeholders in the design and birth of businesses. The Hohenwald Financial Permaculture team developed nine steps in this process:

  • Framing the discussion and design
  • Building community cohesion
  • Mapping the financial ecosystem (or other context)
  • Brainstorming
  • Narrowing the options
  • Digging into the details
  • Presenting the final projects to each other
  • Articulating achievable next steps and generating responsibility for those next steps.
  • Celebrating success.

Holistic Management includes both holistic goal setting and holistic financial management created by Allen Savory. More information about it is available at http://holisticmanagement.org/.

While financial permaculture is a big tent, those involved thus far believe that the entire conversation can be simplified into two questions:

  • What are the most successful strategies for creating profitable right livelihood?
  • What are the most successful and accessible strategies for reinvesting profit back into the community?

The answers to these questions will vary based on context. They frame the parameters of a future of just and sustainable opportunity that cares for people, cares for the planet, and has a care for the future.

See http://www.perennialsolutions.org/financial-permaculture-organizing-communities-to-manage-resources-with-perennial-objectives-ends.html for more information on financial permaculture.

Eight Forms of Capital

Ethan Roland is one of the originators of the financial permaculture concept. He helped facilitate the first two Financial Permaculture summits in Hohenwald, Tennessee. Later, in conjunction with Catherine Austin Fitts, another of the financial permaculture leaders, he formulated the concept of “Eight Forms of Capital” which he identifies as:

  • Social capital
  • Material capital
  • Financial capital
  • Living capital
  • Intellectual capital
  • Experiential capital
  • Spiritual capital
  • Cultural capital

Read more about this concept at http://appleseedpermaculture.com/8-forms-of-capital/.

Slow Money

The Slow Money movement could be summarized as “investing as if food, farms, and fertility mattered.” These are its principles:

Preamble —

In order to enhance food security, food safety and food access; improve nutrition and health; promote cultural, ecological and economic diversity; and accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration, we do hereby affirm the following Slow Money Principles:

  1. We must bring money back down to earth.

  2. There is such a thing as money that is too fast, companies that are too big, finance that is too complex. Therefore, we must slow our money down — not all of it, of course, but enough to matter.

  3. The 20th Century was the era of Buy Low/Sell High and Wealth Now/Philanthropy Later — what one venture capitalist called “the largest legal accumulation of wealth in history.” The 21st Century will be the era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place and non-violence.

  4. We must learn to invest as if food, farms and fertility mattered. We must connect investors to the places where they live, creating vital relationships and new sources of capital for small food enterprises.

  5. Let us celebrate the new generation of entrepreneurs, consumers and investors who are showing the way from Making A Killing to Making a Living.

  6. Paul Newman said, "I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out." Recognizing the wisdom of these words, let us begin rebuilding our economy from the ground up, asking:

    What would the world be like if we invested 50% of our assets within 50 miles of where we live? What if there were a new generation of companies that gave away 50% of their profits? What if there were 50% more organic matter in our soil 50 years from now?

http://www.slowmoney.org/principles