Rearranging our economic system(s)

By Mike Morin

In light of the coming shortages in oil (See peakoil.net) and the destruction of our natural environment, ecosystems, and habitats that are caused by the current paradigm of corporate conglomerate capitalism (See davidkorten.org), we are facing the dire need to restructure our socio-economic systems into a strategy for global relocalization (See postcarbon.org) of our production and distribution systems.

So much has been written about our environmental predicament and strategies to avoid environmental and economic collapse that I can only present a cursory overview of the situation. I offer my apologies to all those who have done and/or are doing great work whom I have not included. In my adult lifetime (approximately thirty years), many people have been working to develop paradigms for community re-development and ecological evolution. A pioneering work was, of course, Small is Beautiful by E.F. Schumacher. Other initiatives sprung up such as the Institute for Local Self-Reliance, RAIN, and Eco-City Berkeley among others. The interest, formation, and participation in eco-villages and intentional communities has been growing. New urbanism has become a popular mantra among architects and planners.

Still, there is a missing piece to all this. If we are to reorganize our socio-economic systems to live in ecological, lower energy, more self-reliant and self-sufficient local and (bio)regional communities (i.e., global relocalization), we need a mechanism to change the way that resources are allocated to and within our communities.

According to Lewis Mumford, the word "eutopian" means good place and outopian means no place. Long ago, eutopian socialists such as Fourier, Owen, and St. Simon, among others, formulated and wrote about cooperative community development structures. Such was the beginning of the notion of socialism in western culture. Many intentional communities developed as the result of their efforts. More enduring was the creation of cooperative or mutual business organizations. These are economic democracies where direction of the organization is set up in a one person, one vote scheme. Probably the most successful effort in recent years has been the worker cooperatives of the Mondragon Society in the Basque region of Spain. Since its humble beginnings in 1956, this society of workers' cooperatives has grown to a conglomerate cooperative corporation employing and owned by more than 30,000 workers.

Based on the study of the early cooperative communitarians, the
anthropological study of indigenous and historical cultures, comparative
economic systems, the Mondragon system and other modern cooperatives, and the assessment of our current situation, I have devised somewhat of a new paradigm for the funding of cooperative community development organizations.

At the core of the concept is the Neighborhood Improvement Fund. I can
visualize neighbors forming eco-villages and coming together in larger
neighborhood cooperatives. The neighborhood cooperatives would then form a union on the regional level and various regional organizations (Unions of
Neighborhood Improvement Funds or UNIF) would form an alliance with the
other regions in the world. The organization(s) would be based on the
following principles:

• ecology
• sustainability
• cooperation (economic democracy)
• equity
• community stewardship
• conservation
• peace and tranquility
• sufficiency
• production and access to essential goods and services
• primacy of the pedestrian/walkability/new urbanism
• economy and humanity of scale
• risk diversification
• life long education

Most discussion and work in the area of community development finance relates to lending and micro-enterprises. The trouble with such strategies is that small businesses have a very high failure rate because they cannot compete with capitalist conglomerates. They are at an acute disadvantage
with respect to economy of scale and risk diversification (i.e. conglomerates who are making good profits in one division can afford to forego profits in another endeavor in order to survive a period of intense competition). The problem with the emphasis on lending is that highly leveraging a business is usually a bad strategy since lenders have the first claim on revenues/profits.

What I propose is the formation of equity unions that give community members and workers the opportunity to invest in the ownership of the production and distribution of essential goods and services, and amalgamated/conglomerate cooperatives that would help make the local cooperatives competitive. My proposal is as follows:

As Einstein said, Imagination is more important than knowledge. I would like
to think that the following plan has solid grounding in both. It is based on
eutopian socialist models and represents a most ethical approach to economic restructuring. The prospects of radically rearranging how resources are allocated to and within communities may be slim, yet may be the best hope for the human and non-human communities.

Here it is:

Start in our (and all) neighborhoods, a Neighborhood Improvement Fund.

Each adult resident in the neighborhood would voluntarily invest in a mutual
fund to be held in local credit unions. The purpose of the fund would be to
create access to necessities (food, housing, household goods, clothing,
hardware, building supplies, office products, appropriate transportation and
energy and conservation, health items and services, education services,
etc.) at the local level (i.e., within walking distance of all residents). The mutual fund would make investments only in community- and worker-owned (hybrid) cooperatives. All decision making would be democratic with a one-person, one-vote system, democratically elected Board, and a referendum system.

There would be an association or union of NIFs and we would encourage more wealthy neighborhoods to donate to poorer neighborhoods (perhaps through a 501(c)(3) vehicle). Through the Union of NIFs (UNIF), the NIFs would cooperate to achieve the benefits of economy of scale and bulk purchasing. Involvement in many business segments would create the competitive advantage of risk diversification.

Let's UNIFy!!!

______________________________________________________________________________

Mike Morin

Mike Morin is a Eutopian Business writer and resident of Eugene, Oregon who has studied the unusual combination of Environmental Studies, Planning and Business. He describes his work as an effort to "Trying to Make it Real Compared to What John Lennon imagined".

He is currently working to develop a regional cooperative community development organization, MUNSCCDO, in the Eugene/ Springfield Oregon metro area. Mike also hosts a Yahoo Groups discussion list about fostering, faciltating, and developing such cooperatives.

(541) 683-2107

mikemorin@earthlink.net

This article was previously published at culturechange.org and survivingpeakoil.com.