The P2P of Zion (2): Social Economy developments within the Mormon Church

The second part of a series by Alan Avans.

This part discusses the role of Mondragon type coops and permaculture within a policy centered on city-region centered development. It makes an explicit linkage between the social doctrine of the Catholic Church, which inspired Mondragon, and the Zionic tradition within the RDLS.

Alan Avans:

“To summarize what I’ve spent so many words telling you so far, the Church is (ideally) the emerging Christian social order. One can assume that this social order develops according to a different pattern than the fallen thrones, principalities and powers. Salvation, as we learned from Ephesians chapter 2 and 3 is a social event and process having to do with being reconciled and justified for a right relationship in the context of communion with God. The Church confronts the fallen powers with radically different patterns. The fallen powers have designed and maintain fallen structures of social and economic development that led to inequities that God isn’t willing to tolerate forever. By way of anecdote, God once had the Northern Kingdom of Israel exiled to Assyria when His Jubilee law was mocked once time too many. Like the Devil, fallen powers presume possession and title to the Earth. The Church forecasts that the meek shall inherit the Earth.

Signs of the Times

You are likely aware of a process called ‘globalization’ and the ‘third wave.’ The gist of globalization is that the nation-state is becoming less important as a player on the world stage, and that the emerging global order will be based upon the acts of city regions which are increasingly unfettered by national borders.

To explain the forces actually driving city economies is to explain the decentralization taking place in North America and Europe. It is to explain the unmistakeable emergence of city regions as the key actors in the emerging global order.

Zion had been conceived of in part (through revelation) as an exercise in development of a city-region according to zionic patterns of development. This is important, because if the RLDS Church intends to build a Christian social order with its own patterns of social and economic development, the local communities, the city regions, are the only plausible platforms on which to build its operating systems and structures. It would be strange indeed for the Church to start any other way. Seen in this way, basing zionic development in part on the development of a city-region according to inspired and creative patterns should seem strange to no one.

Not only must the Church consider city-regions and local communities as key to its stragegy, it must set a proper framework for three key elements in any economy:social structures of accumulation, innovation and land stewardship.

To get some idea of what I mean when I refer to these social structures, it must be understood that there is a dynamic relationship between these structures of accumulation, innovation and land stewardship. For example, concentrated land ownership and land speculation may take away from the development of an industrial sector. Land use patterns effect our quality of life. Land use patterns also determine wha type of transportation systems we must develop and pay for, whether we must commute to work, school and shopping centers, and it determines the cost of urban infrastructures in general.

Economic organizations at micro and macro levels are manifestations of underlying “structures of accumulation” which determine access to capital as well as the pattern and mix of development and economic growth.

One model that will be explored in part of this paper is that of the Mondragon Cooperatives in northern Spain. Mondragon’s 150 plus employee-owned businesses (“EOBs”) are organized as a federation with a contract of association with their bank, the Caja Laboral Popular. The relationship these firms and the employee-owners have with the Caja (organized under Spanish law as a credit cooperative) suggests how we may recast the Storehouse Treasury conceptually.

As outlined by Bishop DeLapp in GCR 977, consecrations to the Storehouse Treasury are outright conveyances of ownership to the Church, that is, it’s a transfer of ownership from the person making the consecration to the Storehouse Treasury. I find such an arrangement constraining on both the steward and the Storehouse Treasury, given the the Storehouse Treasury objectives of funding commercial, agricultural, residential and industrial development. To fund the Storehouse’s economic development operations wwith such a narrow category of funds that outright conveyances are is to take the Storehouse Treasury out of the loop that contains pools of capital found in banks, insurance and pension reserves, and venture capital, among others.

The most dynamic feature of Mondragon’s bank is that it is a pool of finance capital democratically controlled by depositors and employee-owners of Mondragon’s many enterprises. “Surplus” is accounted for at the level of the firm, each firm holding “collective” and “individual” internal capital accounts at their bank. As you may recall, according to the Doctrine and Covenants the Storehouse Treasury is a pool of capital controlled by “the voice of the order”. If finance capital is held by an intermediary acting in a fiduciary capacity and democratically controlled, there is no need to deny individual ownership of a capital contribution held as an account.

I recommend then that we conceive of the Storehouse Treasury as a “fund manager” managing a number of categories of funds, including a bank. Owing to the expense of starting a bank, I suggest that we draw upon the experience of community activists in Vermont. In 1989 activists explored starting a bank to serve community needs for affordable housing, community land trusts, employee-owned businesses, family and organic farms, community supported agriculture (“CSAs”) and businesses innovative in ecological, educational and social spheres. It costs 7 to 10 million dollars to even think about making that loan and taking that first deposit.

As an alternative the community activists approached Vermont National Bank and suggested that the bankset up a segregated banking operation. They called it the “Socially Responsible Banking Fund” (“SRB Fund”) and it operates according to the criteria, priorities and guidelines set by the community group and fund depositors. Vermont National Bank depositors may designate their checking, savings and CD accounts as being part of the SRB Fund, maintaining FDIC insurance throughout. It’s like having a credit union at the bank, except the crushing constraints that credit unions operate under in USAmerica do not exist.

As mentioned above, there are over 150 Mondragon cooperative enterprises. Each employee-owner has one share (membership) and one vote. The federation and the enterpises are governed as parliamentary democracies. Checks and balances exist with four branches of government. Workers hire and fire their managers.

Mongdragon’s 30,000 plus employee-owners are considered by the Basque Autonomous Regional Goverment to be Basque Country’s engine of economic growth and development. And it is no wonder that they consider it so. Mondragon’s EOBs are not the result of acquisitions and buy-outs. They have developed over a 45 year period, incubated by its “secondary cooperatives” which provide every conceivable service a business, especially a start-up venture might need. During Mondragon’s history, only 3 businesses were lost due to insolvency. Mondragon has thrived and expanded through Spain’s deep and chronic recessions dating back to the mid-70s. While Spain has experienced unemployment as high as 27 percent, Mondragon had a brief experience with redundancy of 0.6 percent of its workforce in 1984. Mondragon’s employee-owners are the best paid in Spain, and their firms are the most consistently profitable in Spain.

Mondragon’s cooperatives are in fact considered by regional economic development experts to be the textbook example of grassroots regional economic development. It’s origin owes much to Catholic Social Doctrine, which has significant parallels to zionic doctrine.

The Spanish dictator Franco terrorized the Basque people during the Spanish Civil War and imprisoned thousands of Basques for several years. He got around to releasing them well into World War II. One of the prisoners released was a young Catholic priest, Don Jose Maria Arrizmendiarietta (“Arrizmendi”). Upon his release he was assigned to a parish in the village of Mondragon (Assarate). Upon his arrival he was invited to teach Catholicism to the apprentices at a metal work firm. He noticed that the apprenticeship at that firm was the only educational opportunity in Mondragon beyond eighth grade, and that the program was available only to the sons of employees and 12 other youths. He attempted to persuade the employer to take more students but was declined. Father Arrizmendi then organized his parishioners to go bar-hopping throughout the region, drinking a little wine, nibbling a little goat cheese, and talking up a storm about the technical school they wanted to start with the help of the community. In 1943 the technical school opened its doors and taught its first courses in electricity and metal work. The priest, as religion teacher of course, emphasized Catholic Social Doctrine to his students and taught them about cooperatives, particularly the Rochdale retail cooperatives in Britain. He wondered outloud to his class how industrial cooperatives could be operated according to the same principles that governed Rochdale retail co-ops. Six students in his first graduating class started a stove manufacturing operation (now Spain’s largest household appliance manufacturer) in 1956, operating according to the Rochdale principles. Between 1956 and 1959 several other employee-owned businesses formed and began to collaborate together.

In the course of their collaboration they discussed common challenges and opportunities. For example, because they were employee-owned businesses the employee-owners were considered by the Spanish government to be self-employed, and so excluded from the Spanish social security system. Because they were employee-owned businesses and hired and fired management, the role of management had to be fit to a new corporate culture. Because their businesses were employee-owned, banks didn’t understand their needs.

The period between 1959 and 1967 was spent answering the tough questions they asked in 1959. They organized a credit union in the parish basement that year and organized a number of supporting services they called “secondary coperatives” among them being an R&D laboratory, R&D arrangements, documentation and control sytems, “intervention” procedures, their own social security arrangements in the form of insurance and pensions, etc. The bank built the capability to guide prospective ventures from prefeasibility study to break-even point and beyond. The technical school became a secondary cooperative, where students were acclimatized to Mondragon’s cooperative and entrepreneural culture, and supplying Mondragon with its technical support, engineers and managers.

The CenterPlace Regional Development Strategy is symbolized by a vision: the “Village Concept” or “CenterPlace Community Village”. The village design itself can be thought of loosely as a zoning and land-use concept that brings urban life into conformity with the insights of “systems” theory, and most particularly “permaculture.” Permaculture is the “…conscious design and maintenance of productive ecosystems with the diversity, stability and resilience of natural ecosystems.” (Bill Mollison). It results in the harmonious unity of landscape and people, providing their food, energy, shelter and other material and nonmaterial needs in a sustainable way. “Permaculture design is a system of assembling conceptual, material and strategic components in a pattern which functions to benefit life in all its forms”(Bill Mollison).

But most importantly, the CenterPlace Community “Village Concept” is meant to build both a “visible” physical environment, delightful to the senses, and an “invisible” working environment that serves as the symbolic ground for human community.

Permaculturalists feel that ‘bio-regions’ are the proper subject of their design discipline. I feel that a similar systematic approach to economic development would be overlaid with templates derived from the ecological metaphors of permaculture design because the proper scope and scale of economic development is that of city-regions and their localities. I choose to refer to the product of such an ecologically-based overlay as the “CenterPlace Regional Development Strategy.”

We cannot compartmentalize our social and political economies form the ecosystem and expect to rise to whatever challenges both. The destruction of our farms, forrests, and rivers makes manifest the “fallenness” of our social order. As long as the social order is ill, destructive and unbalanced, the biosphere will continue to be destroyed. Consequently wars and poverty will not cease. When designing any system we must take the economic development patterns and the biosphere both into account, and as we do, we will be better able to develop awareness, patterns of thought and learning, as well as applications that will help us to generate innovations in our regional social political economy.

Centralized, bureaucratic organizations reliant upon ‘econonmies of scale’ are too rigid a platform upon whch to build social and political economies that are engaging, inclusive and broadbased. Corporations and national governments have long relied upon the force of resource intensive strategic planning (“extensive development”), seeking to control events and organizations according to rigid linear and hierarchical patterns, as well as through brute force.

Communities seeking to control their own destinies must replace such heavy-handed means for an approach that is responsive, collaborative and adaptive to change.

Why a Regional Development Strategy?

A region is served by a city. It is the city in which are found leading economic systems and structures undergirding a region’s economic platform. It is the city that generates a region’s employment, markets and innovations. We have all heard of “globalization” and the “third wave”. The gist of the process these terms describe is that the centralized nation-state is becoming less of a player on the world-stage and consequently the emerging global order will be based on the acts of city-regions increasingly unfettered by national boundaries and norms.

Nowhere is this more graphically illustrated than in Europe, which has seen the revival of several ancient city-regions, often cutting across national borders and fast attaining political and economic importance in the European Union tha trivals that of most European nation-states.

Jane Jacobs, in her acclaimed book “Cities and the Wealth of Nations” describes the phenomena that lead to the creation of city-regions, the city-regions that are now and always have been, subverted the rigid and heavy-handed hegemony of nation-states. Economic development and growth, according to Jacobs, are the result of processes taking place in cities. Cities can be thought of as the true organisms of economic development and growth. Cities provide a framework and mechanisms for the organization and assimilation of capital, labor, R&D, etc. “Economies develop by grace of innovation and grow by force of import replacement.”

Cities and Market Economies

Cities innovate when there is a social structure of innovation present that can develop new technologies, new processes and new products. Industries cluster in cities where universities and firms with large R&D budgets are found. At the same time, “cities are where real markets are and where real work gets done.”

City economies grow when they can assimilate the new developments in technology, processes and products that have been developed elsewhere. This assimilation takes place whe there is labor/skill competencies enough and capital enough to replace a city’s imports with its own production.

Cities replace imports they can afford to buy with their own production and export that production most feasibly to cities occupying similar places on the “ladder of economic development” and become new competitors to cities that developed the innovations initially.

Cities are therefore in one of two phases of the development cycle: a development/export phase and an import/import replacement phase. Cities in different phases of their economic development now exist in the same centralized nation-states with the same uniform tax, banking, industrial policy and monetary schemes enforced indiscriminantly on all cities within the nation-state regardless of what particular phase a city may be in. This “goofy” hegemony exercised by nation-states creates faulty feedback to cities because the feedback generated is aggregated and undifferentiated, another example of a signal processing disaster.

Currencies are the gatekeepers that regulate an economy’s flow of exports and imports. Jacobs suggests that since city-regions are where the real and meaningful economic processes take place, city-regions ought to have their own currencies.

Regional Capital Formation

Jacob’s suggestion that city-regions adopt their own currencies provide much of the basis for the CRDS approach to regional capital formation. When contemplating the possbility of a regional currency the immediate question comes to mind of hwo to back a new currency. One can back a currency with commodities, renewable resources, solar electricity, etc. The possibilities are nearly endless.

I believe initial backing of a regional currency with the existing national currency offers some opportunities that ought not be passed up. We are in USAmerica, so the CenterPlace Region wold initially back its regional currency with the US Dollar. The immediate benefit of such backing is that US Dollars are captured in reserve as the regional currency is placed into circulation.

In addition, the CRDS calls for the creation of a segregated banking operation modeled on that of the Vermont National Bank’s Socially Responsible Banking Fund. Deposits are lent out by Vermont National Bank according to the criteria, priorities and guidelines set by a community group in Vermont.

It is within our segregated banking operation, the “Storehouse Banking Fund” (“SBF”) that we would place the US Dollar reserves, placing into circulation the regional currency and insuring that the US Dollar reserve backing the regional currency will be deployed according to CRDS criteria, priorities and guideline drawn from zionic and permacultural patterns.

Once capital is captured in the form of US Dollar reserve, a boundary is placed around the regional market. To some degree then, the regional market is also captured, or more accurately, liberated, from the logic of unaccountable corporations and centralized bureaucratic government.

Social Structures of Innovation, Accumulation and Land Stewardship

Every social and economic system is characterized by specific social structures of innovation, wealth accumulation, and land stewardship. These structures have a dynamic relationship one with the other. For example, social structures of accumulation determine who has access to capital, control of capital, who benefits from the use of capital and furthermore it also determines the structure and organization of enterprise, where the norms of a given social structure are enforced and most deeply felt and seen.

In turn, a social structure of land stewardship goes right to the ethical root of how we see our relationship to this Earth and one to another. Because land is a finite resource upon which we make increasing demands, a social structure of land stewardship will determine the allocation of wealth due to productivity of labor and capital. For example, when land is traded as a marketable commodity like sugar, lumber or pork bellies, speculation and concentrated patterns of land ownership will result. As an economy expands and makes further investments in plant, equipment and office space, a greater portion of investment is overtaken up in overhead related to the expense of land use…..”

1 Comment The P2P of Zion (2): Social Economy developments within the Mormon Church

  1. Pingback: Mondragón y los Mormones

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.