Since late last year, F4DC has been working with individuals and organizations from across North Carolina to frame a different approach to economic development action plan. Over the last 9 months or so, we been thinking, planning and organizing with cooperative business stalwart Frank Adams, workers in NC cooperative businesses, and leaders from a range of economic development groups (the NC Community Development Initiative, Ownership Appalachia, Good Work, the NC Association of Community Development Corporations, and others). Out of these conversations has emerged a vision of a statewide initiative and a set of principles that might guide the work of such an initiative.

On Monday, August 29th, this work stepped up a level, when 54 cooperators, lenders, funders, economic development leaders, and other supporters convened in Durham, at the offices of the Self-Help Credit Union. Titled “Building and Strengthening North Carolina’s Grassroots Economy,” the day-long meeting framed the problem of our stuck economy in a new light and then started to map out a set of solutions based in the idea of nurturing community based enterprises that pay a living wage and are rooted in place, green, and sustainable. Lots of great conversations took place across the meeting, and a consensus started to emerge around the need for a coordinated statewide effort.

Marnie and Ed opened the meeting with remarks that gave some context to the day’s work. Marnie tried to define “The problem we’re trying to solve,” and Ed outlined possible solutions in the vein of Mondragon’s worker owned cooperatives and other place-based business models. In preparing his remarks, Ed ended up writing a much longer speech than was needed at the meeting, but which we think provides a useful metaphor for understanding the relationship between communities and their economies, called “Fish, Pies, the Commons and Economic Development.”

Remarks made by Ed Whitfield of the Fund for Democratic Communities at the “Building and Strengthening North Carolina’s Grassroots Economy” meeting held August 29, 2011 at the offices of the Self-Help Credit Union in Durham, NC

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Fish, Pies, the Commons and Economic Development

I’m going to talk a little about fish. Not real fish. I’m not a fisherman, although I have cleaned my share from an uncle who loved to fish and eat them, but didn’t want to scale them and remove the guts. But I’m going to talk about metaphorical fish, the kinds that keep showing up in discussions of self reliance and education.

But first a brief digression: I want to mention pies. Another important metaphor.

Why do we talk so much about pies? Slice of the pie, bigger pie, make our own pies, pie chart, etc. Why do we talk about pies and not talk about fish when it comes to sharing?

Pies are not natural. They are simple, easy to divide, relatively uniform whether in a circle or a box, and they make good charts and graphs. Some of the discussion about the economy and economic justice is about pies and dividing things equally. Some folks propose that the current social division of goods and services or even income and wealth, should be redone so everyone gets the same or a fair amount. This redistribution discussion quickly brings up the challenge of some people who don’t want to give up something so that other people can get something that often the folks who have to give up something think they don’t deserve. It is called a zero-sum-game where getting something means someone else losing the same amount. Those who do fairly well with the status quo are afraid of those who are disadvantaged taking something away from them. Pies get us in trouble.

Economic participation is more like fish than pies. It is complex and hard to divide fairly—who gets the head, who gets the fins, who gets the filets and who consistently gets only the fish guts?

We are much better off talking about folks catching their own fish for themselves rather than trying to divide something so complex. But, that brings me to the “great fish lie”. You have all heard it: “Give a person a fish, they eat for a day, teach a person to fish, they eat for a lifetime.” It’s vicious lie. I used to tell it myself, until I thought long and hard about it and did some research. It became clear to me that just knowing how to fish was insufficient. Knowing how to fish will not feed you at all. You have to also have access to a water hole – lake, ocean, river or stream — someplace where fish can be found – and even then, you needed access to some fishing stuff. We can hardly catch fish with our bare hands. We need a pole and line, hook, bait, sinker, float, or some such maybe even less, but still some tools and equipment suited to the fish we want to catch. The idea that knowing how to fish would feed you rang hollow and useless when we live in a world where knowing stuff is relatively easy, but gaining access to the things we need to be productive can be quite difficult. It is another way of blaming people for being poor and hungry because they won’t learn about fishing. If that fish tale wasn’t wrong, we wouldn’t have construction workers who know how to build houses living under bridges or inhabiting homeless shelters.

Once upon a time, everyone had shared access to lakes, streams and oceans. People had access to land where they could plant food to eat. People had access to forests where trees grew (without anyone having to plant them) and they could use the wood to make shelter, or take clay from the ground to make brick or adobe to shield themselves from the elements. These things were available on the lands that were shared in common. In fact, they were even called “the commons”. These commons were shared and available as the basis for the opportunity to be productive. These commons had the water holes on them, and the stuff we would need to make fishing gear. We didn’t make the commons. This is the abundance that has been found by people who, living on this earth, make use of what is here to be productive, to survive and to thrive – to pass on to the next generation to do so as well.

Since the time when the commons was available and widely shared, some people have understood that the commons had a tragic side. Claiming to be worried about this source of livelihood for the community being kept responsibly, the commons were locked up. They were enclosed. Fences were erected and a new understanding came into being that unless these common spaces were owned privately, they would not be properly taken care of. The idea was that people would cheat. Every cow herder would have an incentive to over graze the commons because he could raise a few more cattle for himself, but he would share any degradation of the common space with the others who use it. That is to say, if you are the first one to cheat, you get the entire benefit, while you get to divide any losses with others who get nothing from your cheating, so you come out ahead. The worry then was that the commons had to be protected and that protection could only come from someone locking it away and restricting how others might use it. So, that which had been the basis for everyone being productive – that which was shared in common, that which had been cultivated and cleared, enriched and improved as part of the accumulation and improvement of communities over thousands of years became, relatively quickly, the private property of the king, nobles or other landowners. These people then wielded the considerable power that comes from being able to decide who will or will not be allowed to be productive.

The real facts contradict this so called “tragedy of the commons”. The commons existed for thousands of years without being destroyed in this way by people in whose interest it was to cheat. Many people around the world have been good stewards of their community’s resources. If they hadn’t they couldn’t have survived. But this idea of the tragedy of the commons became a justification for the concentration of ownership and the concentration of power that comes from a few people getting to decide who will be able to be productive.

Now, in our time, great wealth produced by thousands of years of labor, including slave labor, is concentrated in the hands of a few people. Nearly every square inch of the earth is owned by someone. I know there are parts of the ocean that are international water, but they are largely inaccessible without expensive ships and navigation equipment, so it is still not the case that all who know how to fish are allowed to go fishing.

So let’s go back to correcting the fish lie. The ingredients required to feed one for a lifetime are a) one’s willingness and ability to work, b) a place where that can be done, and c) the equipment needed to do it effectively. We don’t have to own each of these things ourselves to use them. If we are not in jail, we certainly do own our ability to work, but land or access to water and equipment are generally owned by someone who can make our use of them conditional. We have to pay to play.

It is the community’s accumulated surplus, stored in financial institutions in our community and around the world that is the pool of funds from which we should be able to borrow what we need to gain access to the places and things we need to be productive. From being productive, catching our own fish, we would be able to produce enough to feed ourselves and our families, pay back the resources we borrowed, invest in improving the community, and keep the excess for a rainy day (or a drought). We can also set aside some surplus so that someone else might borrow it to become productive and give back to the community after paying back what they borrowed.

So, we here today want to talk about facilitating the productivity of a community where many of its members are willing to work, are willing to secure the knowledge to allow them to be a part of the healthy economic life of a community, and still are not able to be productive. People in such communities are told fish stories, that it is their fault they are hungry because they lack the knowledge of how to fish, when instead, they have been denied access to the water holes and the fishing gear.

The financial market crisis is an acute form of this problem that gives us an opportunity to see it sharply and discuss it with folks who are otherwise not interested in talking about pies or fish or access to capital, but the problem is a longstanding one even in relatively good times. The problem with those good times is that they keep periodically changing to bad times, and we don’t know how long these times will be bad times before the good times come back, if they ever do.

We know from what we heard a little earlier that the conditions we face are severe. We need to figure out what we can do to have a big impact on the situation. In North Carolina hundreds of thousands, if not about a million or more people need employment or better employment so that they can become productive and contribute to their communities. But these neighbors of ours are not able to do so, largely through no fault of their own, but rather because they do not have access to the commons, which no longer exists as a free space, and they don’t have access to the money they would need to access these productive spaces in today’s world where everything is owned and restricted.

Responsible and adequate access to finances — to capital — is the key to unlock the commons. It is the key to the health of the community. As political economists Cohen and Rogers have said, investment “is effectively the only guarantee of a society’s future. If that future is not available as a subject of social deliberation, then social deliberations are fundamentally constrained and incomplete.” That is to say, poor communities remain poor when the resources are denied to them or drained from them; when the finances are not available to create opportunities for all who are willing to be productive; when the place and the equipment, the land and the machinery are not made available for people to be productive and produce the surplus that goes into assuring the community’s future.

But we are all concerned about the community’s future. We are concerned about communities developing economically. Local governments offer incentives to bring businesses into communities. We try to make communities attractive to investors so that they will put these productive opportunities in place. Our current way of approaching economic development privileges bad corporate and business citizenship. We have seen development based on the race to the bottom, where businesses are enticed with low wages, few environmental protections and the freedom to externalize the cost of damage to the environment rather than having to pay the full price of doing business. Rather that “what’s good for General Motors” being “what’s good for America”, what is good for business profits is often exactly what is bad for the quality of life in a community.

Still, even with the incentives that are offered, some businesses come to town, stay a while and then leave. In Greensboro we are celebrating the arrival of Honda Jet and mourning the departure of American Express this year. We need businesses that are rooted in place. But how? We can’t tell the owner of finance, tools and equipment that he cannot sell what he has in one place and buy something somewhere else. That he can’t liquidate an investment in one place and make another investment somewhere else where he will get greater returns on his investment. How do we begin to restrict the flow of money out of our community without creating oppressive coercive practices and structures?

The answer is under our noses. It lies in those business entities that have no incentive to relocate. Business entities that are owned by the community do not behave like we have seen so many others behave, and no coercion is required. When the owners of a business are members of the community who need and use the business’s services, then the business has little incentive to leave. When the owners of a business are the workers in the business, they have no incentive to outsource their jobs to other parts of the country or world where wages are lower or where there are less environmental protections or where they can appropriate huge chunks of the tax base for their private use and leave the community without needed services.

Most communities already have some such institutions, but they are not well connected and there are not enough of them. They include credit unions (which are co-ops) as well as individual proprietorships, co-op stores, buying clubs and other small scale things where community members work together on supplying and distributing the things that they need.

There is also a possibility, that many of us are just coming to see, of doing this on a large scale and in a coordinated way that can make a big impact on the kinds of problems we know we are facing.

We have the evidence from Mondragon Cooperatives in the Basque region of Spain, that such large scale businesses are possible and that they can be world class, competing with the rest of Europe, North America, and Asia for innovation, quality and sound management practices. They are organized around the principles of the sovereignty of labor and the instrumental but subordinate nature of capital. They uphold the importance of democratic practice and participatory management. They are owned by the workers, but hire managers with sufficient skills to run large complex enterprises. They have their own insurance company, bank and retirement fund as well as doing research and development and continuing to think about their core business purpose of creating jobs and community wealth rather than simply increasing corporate profit. With about 100,000 jobs, the largest retail store in Spain and the economically healthiest communities in spite of the international financial crisis, there is much we can learn from Mondragon. As we will see shortly with the video of the Evergreen Co-ops done by the Cleveland Federal Reserve, there are already some communities here in the USA who are taking their lessons as a basis for developing new approaches to community economic development.

Cooperatives and worker owned co-ops are certainly not the only economic entities that are rooted in communities. Many of our smaller mom and pop operations are tied to place, and not likely to cash out and move. We need to think about how we can generally make resources available – productive resources that are tied to principles of DEMOCRACY, SUSTAINABILITY and JUSTICE. We need community based enterprises which are a) sustainable, b) pay a living wage, c) pay attention to not damaging the environment (green) and d) have a conscious connection to building community.

We do, however, need to recognize that the current practices of lending and grant-making make it difficult for less common forms of business organization, such as cooperatives, to exist and gain access to finance. This money is a portion of the social surplus, the accumulation of the social product, capital, that businesses need to be as efficient as possible and grow to meet the needs of their communities.

Much of the current way that new business entities are fostered is based on the idea of individual entrepreneurship. While the idea of an individual coming up with innovative business plans and taking clear responsibility for implementing those ideas is commendable, it does not match what is possible and useful with a group of people coming together to share in business ownership and design. Good management can be found and hired until it emerges from the affected communities of workers. Folks in a worker owned business will make the hard decisions that go along with making a business successful and the option of packing up and leaving will be off the table. When we push open the doors wider to the ways of developing local community based enterprises, we need to make sure we make room for businesses organized around co-operative models.

I want to end by adding a few extra points on these community based enterprises:

First, they should produce as much as possible for the needs of the local community before looking to the increasingly distant state, regional, national and international markets over which they have decreasing levels of control and influence. Food, energy conservation, energy, shelter, services and other things that are hard to outsource lend to a certain rootedness and stability. There is less worry about large swings in national or international commodity prices when we are producing first and foremost for our own needs. This is also a way to help the surplus generated by our community stay in our community and not be sucked out and put on the market for the highest returns at whatever social costs that it would entail.

Second, I’d like to say we should promote inclusive entrepreneurship. We want to make sure we are opening doors to allow the entry of those who have previously found it difficult to go into business. This will require us to promote and develop the culture, mentors, financing and inexpensive business spaces that are needed to allow groups entry into business development.

I would conclude by saying that we know a lot about what will not work. Simply talking about redistribution is not sufficient. Re-slicing the pie will not get us what we need. Engaging in more economic-development-as-usual is not sufficient. Continuing this race to the bottom is not sufficient. Low wages, disorganization and fracturing of the communities, a lack of environmental regulation and ultra-low taxes do not make a good community. Education, alone, is not sufficient. We may need to teach people how to fish, but only when we have made sure the waterholes are available for everyone.

We have a lot of work ahead of us, but we can make this work.