All the powers of the old-world have entered into a holy alliance to exorcise this spectre: liberal States and dictators, banks and FANG, regulators and speculators.

Where is the State that hasn’t attempted to muzzle freedom of communication and information, or to expand surveillance of its own citizens? Which major online service hasn’t monetized their users’ data without their knowledge or closed user accounts without possible recourse? Which banker hasn’t publicly opposed the right of everyone to have personal and absolute ownership of one’s assets through cryptocurrencies?

Two things result from this fact:

1- Peer-to-peer is already acknowledged by all world powers to itself be a power.

2- It is high time that peer-to-peer supporters should openly, in the face of the whole world, publish their views, their aims, their tendencies; that they counter oppressive forces with their diverse and energetic initiatives. To this end, peer-to-peer contributors will assemble in Paris from the 8th to the 12th of January 2020 at the Paris P2P Festival, the first event dedicated to all forms of free interplay between peers: technical, political, cultural, social, and economic.

If we indulge in allusion to a much more famous Manifesto, it is because we believe that p2p technology projects (Bitcoin, blockchains and Web3, distributed Web and Solid, self-sovereign identities, decentralized protocols…) need to be put in perspective.

In 2019, people’s protests and social demonstrations have flooded the streets of every continent: Sudan, Chile, Hong Kong, Catalonia, Algeria, Iran, India, and of course, in France, our Gilets Jaunes. In many cases, governments reacted not only through police or military crackdown but also with censorship of electronic communication: the internet shutdown in Iran, the censorship of social networks in Hong Kong, the prohibition of decentralized identity systems in Spain… Unfortunately, it is now well-established that internet censorship effectively protects the police states that use it.

Therefore, it is no surprise that we’re seeing an increase in infringements of freedom of the press and physical attacks against those who spread information. Antoine Champagne, journalist and co-founder of reflets.info, will come to the festival to talk about the current state of the protection of journalists and whistleblowers.

Along with the cypherpunk tradition, we believe that cryptography and decentralization are essential means to protect individual and collective civil liberties. We hope that talks on the history of the cypherpunk movement and on the history of decentralization will spark conversations about this point of view among the festival participants.

Peer-to-peer technology is a concrete way to arm the resistance against oppressive powers by providing the resilient and confidential communication channels needed to coordinate social movements in hostile environments. Multiple initiatives in this domain will be presented, from the research work of the LIRIS-DRIM team (CNRS) on streaming and Web request anonymization, to Berty‘s decentralized messaging protocol, to talks and workshops on libtorrent and ZeroNet, Ethereum’s network protocol, cjdns, ZKP and identity, and homomorphic encryption.

For the general public less comfortable with the nuts and bolts of p2p cryptography, the documentary Nothing to Hide will give evidence of how mass surveillance impacts everyone and why we have come to accept it so easily. The festival will also host a show on mentalism and social engineering and a serious game which aims to help everyone learn about effective cybersecurity practices.

Bitcoin and cryptocurrencies are another branch that stems from the cypherpunk movement. Over the last few years, the importance of having a form of money that is independent from political powers and financial institutions became obvious. At first it was ignored, then it prompted only laughs and sarcasm, and finally, open hostility. Now states and mega-corporations try to compete with their own digital and centralized currencies.

Hence the necessity of articulating and educating the public about what makes decentralized currencies so special! We will tackle this challenge in many ways: a talk on Bitcoin by the founders of Cercle du Coin, a screening of the documentary Protocole with its director in attendance, workshops introducing how to use wallets and cryptocurrencies, presentations and workshops on Libre Money (Monnaie Libre), Dash, Ark…

Since the inception of Ethereum, the scope of the blockchain, this decentralized ledger which stores cryptocurrency transactions has exceeded its monetary applications. Blockchain-based Dapps, DeFi and DAOs refer to new ways to perform peer-to-peer interactions and new approaches for managing common resources in more open and less inegalitarian ways. The audience will be introduced to several programmable blockchains such as Ethereum, Holochain, Tezos, or Aeternity.

DAOs, or Decentralized Autonomous Organizations, are a way to introduce self-governed and transparent rules in place of the arbitrary exercise of centralized power in organizations. We will review the most interesting DAO initiatives such as Aragon, DAOstack and MetaCartel, with a panel, talks and two workshops: co-designing a DAO using DAOcanvas and participating in a decentralized jurisdiction with Kleros. Lessons learned with iExec and Paymium will shed light on decentralized marketplaces and exchanges, another form of decentralized and programmable entities.

But blockchains are not the only way to decentralize the internet. The Solid standard, created by Tim Berners-Lee, aims to re-decentralize the Web, which today lies under the control of a small number of global mega-firms such as Google and Facebook. In France, this standard is actively supported and extended by several teams gathered in the Digital Commons Consortium, present at the festival. They will give talks and workshops covering the Virtual Assembly and Startin’Blox.

Blockchains and distributed Web are closely associated with open source and free software, considered a type of digital commons. More generally, the question of the commons, is defined as a shared resource that is co-governed by its user community according to the community’s rules and norms and is an essential aspect of peer-to-peer networks.

The P2P Foundation, which will give one of the opening talks of the festival, claims the autonomy of the commons with respect to both the private and public sectors. An event within the festival, the Public Domain Day, organized by Wikimedia France and Creative Commons France, will invite open conversations about multiple aspects of intellectual property in the age of the commons: open science and open education, free licences and development aid, and the implications of IA and blockchain on art production. We will also screen a documentary telling the tragic story of Aaron Swartz, the freedom activist behind Creative Commons, and Hacking for the Commons, a brand new documentary about the clash between supporters of intellectual property and those who stand for open and free knowledge. Several members of the Coop des Communs will also participate, such as the Digital Commons Consortium and Open Food Network. Finally, a talk by The Commons Stack will show how blockchain, DAOs and commons can be tightly coupled.

The last major theme of the festival will be shared governance and peer collaboration, as these are critical to all the other topics mentioned above, from blockchain upgrades to management of the commons to the ability of people to act as free citizens and economic agents. We will open the festival with the Citizens’ Convention for the Climate, the first experiment of direct democracy embedded in the institutions of the French republic, as a response to the demand for real democracy expressed the Gilets Jaunes, in the context of climate emergency. The association between climate and collective intelligence will also be discussed during a talk and workshops on the Climate Collage. Tools, practices, and ideas for distributed governance and collective sense-making will be discussed and experienced with Jean-François Noubel, Open Source Politics, the Open Opale collective, and a Warm Data Lab by Matthew Schutte.

In short, peers and commoners everywhere support every revolutionary movement against the existing social and political order of things.

In all these movements, they bring to the front, as a leading question in each, the intellectual and physical property question, no matter its degree of development at the time.

Finally, they labour everywhere for a unanimous agreement on initiatives supportive of civil liberties and the construction of the commons.

Peers and commoners disdain the concealment their views and aims. They openly declare that their ends can be attained only by the overthrow of the prevalent logic of concentration of power, wealth, and information.

Free Peers of All Countries, Unite!

Lead image: Close view of Hong Kong Lennon Wall by Ceeseven under the Creative Commons Attribution-Share Alike 4.0 International license. Special thanks to Kirstin Maulding.

The post The P2P Festival in Paris: Unite the Peers appeared first on P2P Foundation.

Walking down the high street of a place described as one of the UK’s most ethical towns, the first thing you notice is the absence of national chain stores and fast food outlets. Instead, you find a diverse mix of independent shops selling organic food, clothes, art, antiques and furniture, as well as cafes and restaurants and an abundance of charity shops.

This is Totnes – a small, historic market town in the south-west of England that has garnered a reputation as a thriving hub for art, music, theatre and alternative lifestyles. Noticeboards around the town advertise everything from yoga lessons to Zen meditation, together with posters for various events – including the next Extinction Rebellion non-violent direct action training session.

In many shop windows today, there are stickers which read “Totnes pound accepted here”. Sadly, after 12 years of operation, the Totnes pound will come to an end on June 30, 2019. This highly symbolic initiative inspired other local currencies including the Bristol pound and the Brixton pound, which encourage people to spend locally and keep money in the community.

But the gradual shift to a cashless society and a lack of uptake by local government agencies have ultimately led to the Totnes pound’s demise. Rob Hopkins – co-founder of community-led charity Transition Town Totnes and initiator of the local currency – thinks the Totnes pound has helped to build a sense of community and strengthened the town’s identity, with the £21 note reflecting the local sense of humour.

The impact of austerity

The Totnes pound is just one example of the kind of outside the box thinking that has kept this local community resilient in the face of austerity. Since 2010, the pressure on local authority budgets across England has been intense, with a 50% decline in central funding support. The result has been cuts to public services and less money circulating in local economies.

In Totnes – as elsewhere – there are visible signs of these trends, with the closure of local bank branches and “to let” signs on vacant shops. According to Francis Northrop, former manager of Transition Town Totnes, smaller rural communities like Totnes face difficulties because they lack the economies of scale which make cheap goods and services more accessible in big cities.

Leer más: Retail decline, in maps: England and Wales lose 43m square metres of shop space

Totnes has responded by developing a new ethical economy that puts community values at the core. The closure of the Dairy Crest factory in 2000 convinced many locals that the answer was not to wait for inward investment from big businesses outside of the town. Instead, the focus is on internal investment: harnessing community wealth to address community needs.

But unlike anti-austerity efforts seen in larger cities – such as Preston – a small town like Totnes cannot rely on anchor institutions including local government, universities or hospitals, to redirect their spending into the local economy.

Indeed, one such institution – Dartington College of Art – relocated to Falmouth in 2010 with the loss of an estimated £6m a year in local spending from 900 students and staff. Instead, Totnes has had to show it’s possible for small towns to withstand such losses, by drawing from a toolbox of different methods to build community wealth.

A new ethical economy

The response has grown from more than a decade of community trust building, since the launch of Transition Town Totnes in 2006. Initially set up to promote local resilience in the face of climate change and peak oil, Transition Town Totnes now coordinates an extensive range of local projects, and forms part of a global Transition network, with initiatives from around the world sharing knowledge and ideas.

Some of these projects focus directly on combating the effects of austerity. For example, Caring Town Totnes is a collaboration of around 80 organisations seeking to counter the impact of budget cuts on local health and social services.

Current Transition Town Totnes manager Jenny Gellatly is also working with the Common Cause Foundation to explore how it may be possible to place compassionate values at the heart of the future transformation of the town. During a recent visit for my research, she explained to me how initiatives like these promote caring for neighbours, friends and family, to help ensure that the most vulnerable people in the community get the support they need.

Other projects focus on building up the local economy and making it more self-sufficient. An important breakthrough came with the launch of the Reconomy Center, to support new enterprises and promote local investment. The centre hosts an annual Local Entrepreneur Forum to crowdfund low carbon, ethical and sustainable business projects.

A number of organisations also came together to produce a Local Economic Blueprint, which highlights the economic benefits for small independent businesses in Totnes of sourcing goods and services from other local businesses and suppliers, to ensure more money circulates in the economy.

The next critical step was the launch of the Totnes Community Development Society – a not-for-profit that raises funds and implements local development projects. It’s currently implementing the Atmos Totnes project, to transform the disused Dairy Crest site into a school for food entrepreneurs and a business incubator, with affordable housing.

In the face of severe challenges, Totnes has shown how a community can mobilise to achieve a more ethical and resilient local economy. It will be fascinating to observe how the town changes in the years ahead, and to see what the next initiative will be, to replace the Totnes pound.

Author Brendan Barrett is Specially Appointed Professor, Center for the Study of Co*Design, Osaka University

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This article is excerpted from my new book Banking on the People: Democratizing Money in the Digital Age, available in paperback June 1.

The U.S. federal debt has more than doubled since the 2008 financial crisis, shooting up from $9.4 trillion in mid-2008 to over $22 trillion in April 2019. The debt is never paid off. The government just keeps paying the interest on it, and interest rates are rising.

In 2018, the Fed announced plans to raise rates by 2020 to “normal” levels — a fed funds target of 3.375 percent — and to sell about $1.5 trillion in federal securities at the rate of $50 billion monthly, further growing the mountain of federal debt on the market. When the Fed holds government securities, it returns the interest to the government after deducting its costs; but the private buyers of these securities will be pocketing the interest, adding to the taxpayers’ bill.

In fact it is the interest, not the debt itself, that is the problem with a burgeoning federal debt. The principal just gets rolled over from year to year. But the interest must be paid to private bondholders annually by the taxpayers and constitutes one of the biggest items in the federal budget. Currently the Fed’s plans for “quantitative tightening” are on hold; but assuming it follows through with them, projections are that by 2027 U.S. taxpayers will owe $1 trillion annually just in interest on the federal debt. That is enough to fund President Donald Trump’s trillion-dollar infrastructure plan every year, and it is a direct transfer of wealth from the middle class to the wealthy investors holding most of the bonds.

Where will this money come from? Crippling taxes, wholesale privatization of public assets, and elimination of social services will not be sufficient to cover the bill.

Bondholder Debt Is Unnecessary

The irony is that the United States does not need to carry a debt to bondholders at all. It has been financially sovereign ever since President Franklin D. Roosevelt took the dollar off the gold standard domestically in 1933. This was recognized by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, in a 1945 presentation before the American Bar Association titled “Taxes for Revenue Are Obsolete.”

“The necessity for government to tax in order to maintain both its independence and its solvency is true for state and local governments,” he said, “but it is not true for a national government.” The government was now at liberty to spend as needed to meet its budget, drawing on credit issued by its own central bank. It could do this until price inflation indicated a weakened purchasing power of the currency.

Then, and only then, would the government need to levy taxes — not to fund the budget but to counteract inflation by contracting the money supply. The principal purpose of taxes, said Ruml, was “the maintenance of a dollar which has stable purchasing power over the years. Sometimes this purpose is stated as ‘the avoidance of inflation.’”

The government could be funded without taxes by drawing on credit from its own central bank; and since there was no longer a need for gold to cover the loan, the central bank would not have to borrow. It could just create the money on its books. This insight is a basic tenet of Modern Monetary Theory: the government does not need to borrow or tax, at least until prices are driven up. It can just create the money it needs. The government could create money by issuing it directly; or by borrowing it directly from the central bank, which would create the money on its books; or by taking a perpetual overdraft on the Treasury’s account at the central bank, which would have the same effect.

The “Power Revolution” — Transferring the “Money Power” to the Banks

The Treasury could do that in theory, but some laws would need to be changed. Currently the federal government is not allowed to borrow directly from the Fed and is required to have the money in its account before spending it. After the dollar went off the gold standard in 1933, Congress could have had the Fed just print money and lend it to the government, cutting the banks out. But Wall Street lobbied for an amendment to the Federal Reserve Act, forbidding the Fed to buy bonds directly from the Treasury as it had done in the past.

The Treasury can borrow from itself by transferring money from “intragovernmental accounts” — Social Security and other trust funds that are under the auspices of the Treasury and have a surplus – but these funds do not include the Federal Reserve, which can lend to the government only by buying federal securities from bond dealers. The Fed is considered independent of the government. Its website states, “The Federal Reserve’s holdings of Treasury securities are categorized as ‘held by the public,’ because they are not in government accounts.”

According to Marriner Eccles, chairman of the Federal Reserve from 1934 to 1948, the prohibition against allowing the government to borrow directly from its own central bank was written into the Banking Act of 1935 at the behest of those bond dealers that have an exclusive right to purchase directly from the Fed. A historical review on the website of the New York Federal Reserve quotes Eccles as stating, “I think the real reasons for writing the prohibition into the [Banking Act] … can be traced to certain Government bond dealers who quite naturally had their eyes on business that might be lost to them if direct purchasing were permitted.”

The government was required to sell bonds through Wall Street middlemen, which the Fed could buy only through “open market operations” – purchases on the private bond market. Open market operations are conducted by the Federal Open Market Committee (FOMC), which meets behind closed doors and is dominated by private banker interests. The FOMC has no obligation to buy the government’s debt and generally does so only when it serves the purposes of the Fed and the banks.

Rep. Wright Patman, Chairman of the House Committee on Banking and Currency from 1963 to 1975, called the official sanctioning of the Federal Open Market Committee in the banking laws of 1933 and 1935 “the power revolution” — the transfer of the “money power” to the banks. Patman said, “The ‘open market’ is in reality a tightly closed market.” Only a selected few bond dealers were entitled to bid on the bonds the Treasury made available for auction each week. The practical effect, he said, was to take money from the taxpayer and give it to these dealers.

Feeding Off the Real Economy

That massive Wall Street subsidy was the subject of testimony by Eccles to the House Committee on Banking and Currency on March 3-5, 1947. Patman asked Eccles, “Now, since 1935, in order for the Federal Reserve banks to buy Government bonds, they had to go through a middleman, is that correct?” Eccles replied in the affirmative. Patman then launched into a prophetic warning, stating, “I am opposed to the United States Government, which possesses the sovereign and exclusive privilege of creating money, paying private bankers for the use of its own money. … I insist it is absolutely wrong for this committee to permit this condition to continue and saddle the taxpayers of this Nation with a burden of debt that they will not be able to liquidate in a hundred years or two hundred years.”

The truth of that statement is painfully evident today, when we have a $22 trillion debt that cannot possibly be repaid. The government just keeps rolling it over and paying the interest to banks and bondholders, feeding the “financialized” economy in which money makes money without producing new goods and services. The financialized economy has become a parasite feeding off the real economy, driving producers and workers further and further into debt.

In the 1960s, Patman attempted to have the Fed nationalized. The effort failed, but his committee did succeed in forcing the central bank to return its profits to the Treasury after deducting its costs. The prohibition against direct lending by the central bank to the government, however, remains in force. The money power is still with the FOMC and the banks.

A Model We Can No Longer Afford

Today, the debt-growth model has reached its limits, as even the Bank for International Settlements, the “central bankers’ bank” in Switzerland, acknowledges. In its June 2016 annual report, the BIS said that debt levels were too high, productivity growth was too low, and the room for policy maneuver was too narrow. “The global economy cannot afford to rely any longer on the debt-fueled growth model that has brought it to the current juncture,” the BIS warned.

But the solutions it proposed would continue the austerity policies long imposed on countries that cannot pay their debts. It prescribed “prudential, fiscal and, above all, structural policies” — “structural readjustment.” That means privatizing public assets, slashing services, and raising taxes, choking off the very productivity needed to pay the nations’ debts. That approach has repeatedly been tried and has failed, as witnessed for example in the devastated economy of Greece.

Meanwhile, according to Minneapolis Fed president Neel Kashkari, financial regulation since 2008 has reduced the chances of another government bailout only modestly, from 84 percent to 67 percent. That means there is still a 67 percent chance of another major systemwide crisis, and this one could be worse than the last. The biggest banks are bigger, local banks are fewer, and global debt levels are higher. The economy has farther to fall. The regulators’ models are obsolete, aimed at a form of “old-fashioned banking” that has long since been abandoned.

We need a new model, one designed to serve the needs of the public and the economy rather than to maximize shareholder profits at public expense.

_____________________

An earlier version of this article was published in Truthout.org. Ellen Brown is an attorney, founder of the Public Banking Institute, and author of thirteen books including Web of Debt and The Public Bank Solution. Her latest book is Banking on the People: Democratizing Money in the Digital Age, published by the Democracy Collaborative. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com.

The post The Bankers’ “Power Revolution”: How the Government Got Shackled by Debt appeared first on P2P Foundation.

1. Could you tell us a bit about your background?

I discovered libertarian socialism as a student at York University in 1976, where I was studying English with the idea of becoming a journalist. The mid-late 70s were a high point of working class confidence in the UK. There was also a government favourable to cooperatives and a rediscovery of ‘common ownership’ of enterprises. The decade between 1975 and 1985 witnessed fast growth in the number of worker cooperatives. By 1985 there were more than 2,000 in the UK. After university I joined one of the many collective publishing and print production projects that had sprung up and organized along cooperative lines.

2. You currently work as Client Services Director at Calverts Cooperative. What is this cooperative about?

Calverts  is a worker-owned creative design studio and print shop. It was founded by seven people in 1977. It was the product of a conflict between employees and manager-owners of a publishing and printing subsidiary of the Institute for Research in Art and Technology. It started as a ‘sweat equity’ common ownership worker cooperative, designing and printing community, union and political publications. I became a member of Calverts in 1985.

Over the years, Calverts grew meeting its members’ evolving needs and aspirations and investing all its surplus in skills and technology development. It is now a leading print house and design studio, working for universities, consumer brands, arts organizations and publishers. It is still, however, also a ‘movement’ resource, often working pro bono for grassroots community organizations with which our members are involved. It has also remained true to its founding principles of equality. Our members are all hourly paid, on the same hourly rate – from the Finance Director to the Cleaner. We have no line managers, working instead as interlinked team circles, with a General Meeting every month. We have a culture of ‘emergent strategy’, and most decisions are made by consensus, using a mixture of sociocratic and devolved process. We try to avoid conventional voting, except when it is required by statute. This efficient and empowering approach is quite common in UK worker cooperatives, which are in the forefront of cooperative democratic innovation.

3. What other activities are you involved in as a co-operator?

Worker cooperatives in the UK fell back after 1985, and by 1999 the sectoral organization – Industrial Common Ownership Movement (ICOM) – was no longer viable. In 2000, ICOM merged with the consumer cooperatives’ apex to form a new apex body called Cooperatives UK. At that time I had not really been concerned with the cooperative movement outside worker cooperatives. I participated in a national cooperative congress with the idea of selling Calverts services to other cooperative businesses. The people I met, the friendships I made, and the things I learned at the event made me want to deepen my understanding of cooperatives.

In 2004 I was elected to a policy forum called the Worker Cooperative Council, then served as a board member of Cooperatives UK from 2006 to 2011. By that time, I found out that I was, in effect, already a ‘barefoot’ worker cooperative organizer – because groups would approach Calverts to learn from our experience, with the idea of setting up their own cooperatives, and I would help them. I was also giving presentations on worker cooperation to groups of students, particularly in the creative industries, in the context of the increased social and economic pressure on young workers after the 2008 crisis.

I formalized this in 2012, when I set up Principle Six that provides support and advice on cooperative enterprise development in areas of membership strategy, campaigning, policy, branding, copywriting and editorial and strategic communications. Through Principle Six I became involved with a range of cross-movement bodies, including the board of a specialist cooperative lender (Cooperative and Community Finance ); the London regional cooperative council (Cooperatives London ); a consortium of independent coop business advisers (London Coop Development); and now a crowdsourcing platform for cooperative development (Platform 6 ).

At the moment, I am focussing more energy on grass roots, local and international worker cooperative organizing. I still work part time at Calverts, managing key client accounts and maintaining Calverts links with the wider movement. I also serve as a board member of CECOP , European confederation of industrial and service cooperatives and support its communications team.

4. What do you think are the challenges and opportunities for the cooperative movement? How have you been addressing these challenges within your work?

Growing the cooperative movement is not so much a matter of finding the right formula, but of understanding how changes in the composition of communities, and in the world of work, are producing forms of collective resistance in new places. We need to see where people are already cooperating, using solidarity principles to articulate their demands for a better life, to see how we can connect with them – bringing in the technology of cooperatives, and putting our experiences to work.

This has implications for where we put our limited energy and resources. For me, defending cooperatives is important, but lobbying governments for special treatment is not a core task. Similarly, we might think there are self-evident opportunities for cooperation in (for instance) social care, platform-based businesses, or self-employment – but we will not succeed by offering top-down solutions. We need an agile strategy based on a close analysis of currents for social change, associating with them and investing tactically to see ‘what works’. This is the opposite of formulating grand narratives and strategies, where we propose cooperatives as ‘the answer to everything’. In this spirit, my recent work has been focussed in five main areas.

1) Supporting disaffected young people who are articulating a desire to take control of their situation: I helped with the formation of AltGen, the campaign for youth cooperation, and I also mentor young worker cooperatives in London.

2) Organizing around housing and public space: I work with the London Radical Housing Network  that brings together housing cooperatives, tenants of municipal housing and unions of private sector renters to promote access to decent housing.

3) Creating a better technology sector: Recent technological changes are transforming the world of work. I work with CoTech, a growing network of worker cooperatives providing technology, digital and creative services. The members of the network can use their collective experience, skills, and resources to promote the worker cooperative model that can create better workplaces, better products and better value for customers.

4) Connecting the cooperative movement with organized groups of super-exploited workers and new, small, and industrial unions, to see what scope there is to bring together these different strands of worker cooperation in a productive way.

5) Strengthening the existing network of worker cooperatives, creating accessible resources of knowledge, practical support and funds to spread and deepen cooperation. An example of this is the Worker Coop Solidarity Fund , which has collected more than £120,000 in four years in the form of micro-contributions from individual members and supporters. This means we can independently underwrite small worker cooperative education projects, fund co-learning and mentoring activity, and sometimes just give tiny amounts of money where it will make a difference. One example is that we have been able to sponsor CECOP’s 40th anniversary General Assembly and conference to be held in Manchester, which we hope in turn will result in meaningful conversations and learning between worker and social co-operators in the UK and across Europe.

—————
Spotlight interviews with cooperators is a series of interviews with cooperative leaders around the world, whom ILO officials have encountered in the course of their work with cooperatives. This article does not constitute an endorsement by the ILO.

Republished from ILO.org

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His specialties are program development, research, data analysis, agent based modeling, computer simulation, monitoring and evaluation, complementary currencies, informal settlements, environmental programs, cooperatives.

In this episode, Will talks to us about his work over the past eleven years, organizing micro-entrepreneurs in poor areas of Kenya. Central to his work has been the creation of community currencies that have enabled a greater amount of trading and utilization of capacity in those communities. Recently, Will and his associates have been implementing digital forms of those currencies, and networking communities together in a wide area exchange system.

Grassroots Economics, https://www.grassrootseconomics.org
“Through community currencies people have a way to exchange goods and services and incubate new businesses, without relying on scarce national currency and volatile markets.”

Documentary on Will Ruddick and Kenyan Community Currencies, https://youtu.be/ojFPrVvpraU

How to Give People the Same Power As Banks, https://youtu.be/PfEW2atiB4s

Unblock HongKong – Interview with Will Ruddick – Director at BANCOR, https://youtu.be/OagQNEecZhA

M-Pesa, https://en.wikipedia.org/wiki/M-Pesa

This interview with Will Ruddick was conducted 2019 April 30.

Reposted from the Beyond Money Podcast

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By Michelle Chen

Can good values be good business, too? For generations, the cooperative movement has been answering with a resounding “Yes!”

After a surge of entrepreneurial fervor following the 2007 economic collapse, cooperative ventures are even getting a nod from our divided government: In August, Congress passed the Main Street Employee Ownership Act. The measure aims to help launch the next crop of worker-ownership ventures by directing the Small Business Administration to take proactive steps to increase technical and financial assistance for budding worker-owned cooperatives. Although the law does not provide major new funding, advocates hope it broadens avenues for securing seed financing, and for conducting community-outreach programs through local SBA offices.

Although the law offers just a small boost to the sector, according to Melissa Hoover, executive director of the Democracy at Work Institute, “It’s a start. It’s the very first time that anyone ever said worker coops matter in federal legislation.”

Often the main barrier to launching a coop is simply lack of knowledge—worker cooperatives aren’t just a fluffy hippie social experiment, they’re viable businesses with a track record of promoting civic-minded sustainable enterprises. What worker-owned cooperatives offer is simply this: a stake for each worker in the future. Based on a structure centered on shared equity and worker autonomy, the business model, which hews to a principle of “one-member-one-vote” workplace governance, intrinsically guarantees that each worker profits in tandem with their labor. The key difference from the conventional corporate model is that workers share in the equity and direct how funds are reinvested, be it in pay raises and pensions, new hires, or investing in tech upgrades and staff training.

According to surveys of the roughly 300 to 400 cooperatives nationwide, more than a third were launched since 2000. Their trades range from craft breweries to cab companies. The median coop workforce has nine to 10 people (that’s basically the equivalent number of co-owners), and a total workforce of more than 6,800. Far from the penurious, tree-hugging stereotype, coops run on average a yearly profit margin of some 3 percent, yielding about $150,000 in profits. Compared to the precarious, low-wage jobs that are driving the fastest-growing industries, coop workers earn considerably more, about $15.80 per hour, and work just over 30 hours per week. Median tenure for employee-owners is also about 50 percent higher.

The foundation of the cooperative is an idea for a business that produces material and social good together, which in turn also does good for workers’ communities. This principle, reflecting an ethical framework known as the “solidarity economy,” is put to practice in ventures like the Queens-based eco-friendly cleaning company Pa’lante, which is cooperatively run by a group of housekeepers who merge environmental concern with labor empowerment. Or the driver-led Union Taxi coop of Denver, which also mobilizes against the expansion of exploitative ride-sharing apps.

Though worker-ownership doesn’t necessarily mesh with the traditional unionization model, the Oakland-based Design Action Collective has joined a unique cadre of unionized coops, represented by Pacific Media Guild, in order to fully embody the movement culture that the enterprise serves. On a larger scale, Cooperative Home Care Association has established a 2,000-strong presence in New York City’s home health-care sector, with a fully unionized staff of care workers, who also mobilize with labor-led campaigns for health-care funding.

The equity principle of worker-owned cooperatives could be especially crucial for communities of color, as a path toward expanding community investment and closing the abysmal racial wealth gap. A community-based cooperative can be a vital economic on-ramp for women, immigrants, and people of color historically excluded from entrepreneurship. So far, the cooperative sector is roughly 63 percent people of color, up from 59 percent in 2015.

While many coops are start-ups, conversion of conventional businesses to cooperatives can be a vital investment in marginalized communities, and also widen accessibility to credit, since start-up capital can be pooled collectively. Of the 15 new cooperatives that launched in 2016, 11 were conversions.

As struggling communities lose the mom-and-pop shops that have long been a bulwark of economic opportunity, Hoover says,“It’s really dangerous for our small-business ecosystem for [systematic sell-offs and closures, instead of conversion to coops] to happen.… What’s happening to those businesses as their owners are getting older is that they’re getting shut down or consolidated, it really changes that landscape.”

But conversions to more democratic ownership can preserve local assets, and in less-diverse economic landscapes, cooperatives can actively diversify historically white-male dominated sectors. “Who owns businesses in this country,” Hoover says, “are white men.… And who works in most businesses in this country are not white men.” When a retiring boss passes ownership onto workers, “you’re effectively making a racial wealth transfer from an aging white man to a much more diverse set of business owners.” Cleveland’s Evergreen Cooperatives, a coalition of worker-owned firms, has tried to expand its sector by launching a new Fund for Employee Ownership to finance fresh conversions of old local businesses.

When coops rescue a local family business, it could inject not just a capital infusion but an inspired redevelopment vision. Unlike your average big-box retailer, cooperatives tend to stick with their democratic ethos over the long run. Many coop enterprises actively partner with civic-minded financial institutions, like community credit unions. And while a single business won’t radically change the country’s dysfunctional social and economic policies, a network of cooperatives can foster progressive programs such as promoting workers’ healththrough providing comprehensive benefits, expanding access to affordable childcare, and cultivating more balanced schedule systems and labor-directed workplace-safety programs.

Now that the cooperative sector is entering a more complex economic horizon, it can push for more supportive public policies—like pro-cooperative labor laws that help worker-owners organize, city-based development programs like New York’s Worker Cooperative Business Development Initiative, and opening Workforce Development funding for coops.

“More and more, people who are developing coops to solve social problems are thinking at a bigger scale, and with more ambition,” Hoover says. “They’re thinking about…how do we leverage all the things that traditional businesses do, but for good?”

And since worker-owners practice and produce what they preach, the budding world of cooperatives is in a perfect position to make the change they want, and to pay it forward.

Image: Glut collective member Fiifi Andoh tends to a customer in 2015. Glut is a worker-owned cooperative store that serves the community in in Mount Rainier, Maryland. (USDA / Lance Cheung)

Originally published on The Nation, 8th March 2019: https://www.thenation.com/article/worker-cooperatives-economy-business/

The post What if Workers Owned Their Workplaces? appeared first on P2P Foundation.

Transnational corporations have become the dominant force directing our world. Humanity is accelerating toward a precipice of overconsumption, and the large transnationals are the primary agents driving us there. We’re rapidly losing the earth’s forests, animals, insects, fish, even the topsoil we require to grow our crops. The earth is becoming denuded of its bounty as every living system ­is ransacked for resources—not to mention the looming emergency of climate breakdown. As a result, twenty thousand scientists have recently issued a public warning to humanity, while prominent academics consider the collapse of civilization this century to be a serious threat.

Changes in our personal consumption patterns are important, but are ultimately inconsequential compared with the impact of the transnationals that have come to dominate our global economic and political system. Of the world’s hundred largest economies, sixty-nine are now corporations. Political parties in many of our so-called democracies are funded in large part by billionaires, while government cabinet positions are staffed by corporate executives. International bodies setting global policy are infiltrated by corporate agents so successful at entrenching corporate power that even those governments that still prioritize their people’s needs can no longer make autonomous decisions without risking crippling lawsuits from the transnationals whose interests they threaten. Meanwhile, countries and cities compete with each other to beg their corporate overlords for investment dollars, even it means undermining public services and legal protections for their own populations.

Environmental groups, recognizing where ultimate power resides, try to pressure corporations to improve practices through the threat of public shaming, with some appreciable results. However, these attempts are necessarily constrained by the very structure of big corporations, which exist to enrich their shareholders regardless of the consequences. The common goal of corporations around the world is to monetize human activity and what’s left of nature’s abundance as rapidly and efficiently as possible. The overriding purpose of the world’s powerful institutional force is thus directly at odds with a flourishing earth or a viable future for humanity.

Having spent the first part of my career in the heart of the capitalist system, consulting to major international banks and corporations, I developed a sense of the underlying forces that direct the centers of financial power. These ideas are my distillation of what I believe could be effective levers for humanity to take back some control from the increasing hegemony of corporations and billionaires.

If we are to avoid disaster, our global economic system with its gaping inequities and deranged consumption will eventually need to dismantled and replaced by one based on life-affirming principles rather than wealth maximization. These suggestions, even in aggregate, wouldn’t do that. They represent mere tweaks in a system that ultimately needs to be completely transformed. But like a modest trim tab that helps redirect an ocean liner, perhaps they could begin to curb the destructive force of transnationals and redirect their enormous power toward a more sustainable path.

1. Triple bottom line required for corporate charters

A fundamental reason for the rapacious behavior of transnational corporations is their drive to maximize shareholder value above anything else. While there is no explicit requirement for this in the standard corporate charter, a century of case law has entrenched this principle into the behavior of large corporations to the point that is has become the de facto standard of operation. As a result, if corporations were people, they would be considered psychopaths, utterly devoid of any caring for the harm they cause in the pursuit of their goals.

It is easier, however, to change a corporation’s values than those of a human psychopath. All you need to do is change the legal basis of their charter. Instead of pursuing shareholder interests alone, they could be re-chartered with the explicit purpose of achieving a triple bottom line of social and environmental outcomes as well as financial—sometimes known as the “triple Ps” of people, planet, and profit.

This alternative corporate value system is already available through chartering as a benefit corporation or certifying as a B-Corp, and has been adopted by over 2,000 corporations in over fifty countries around the world—including several multibillion-dollar transnationals.  My proposal is that, instead of being a voluntary step taken by a select few, this would be a requirement for all corporations above a certain size.

Overnight, the intrinsic character of the corporation would be transformed. Currently, CEOs and corporate boards are faced with continual pressure to grow their earnings at all cost. If they chose to make a humane decision, such as not to exploit a copper mine because of the consequent pollution, they could expect to be sued by shareholders, and possibly acquired by a more ruthless competitor. However, if they were legally required to achieve a triple bottom line, they would weigh up decisions in a more balanced way, as a rational person might. With the board responsible for all three bottom lines, they would have to consider the risk of being sued if they caused excessive pollution, or if they were callous to the needs of the communities where their plants were located.

Currently, large corporations boast of their corporate social responsibility departments that are supposed to care about issues such as employment practices of their suppliers, sustainability of their raw materials, environmental impact of their packaging, gender balance and ethnic diversity in the workplace, and investments in local communities. Suddenly, they would have to stop paying mere lip service to these issues and take them as seriously as marketing costs, revenue growth and distribution channels—the things that CEOs actually worry about when they go home at night.

2. Charter renewal required every five years

Changing the corporate charter requirement might not, however, be enough by itself to halt the relentless pursuit of profits by large transnationals. After all, executive pay packages consist of dollars rather than goodwill, and those dollars are linked directly to the share price, which is driven by shareholders’ expectation of financial returns. If they could get away with it, they might continue their rapacious practices, while trying harder to look like they’re meeting the other two bottom lines.

That’s the reason for my second proposal, which is to require that corporations, which currently enjoy what’s known legally as a “perpetual existence,” get their charters renewed every five years. If they failed to meet pre-established criteria on their two non-financial bottom lines, they would not be permitted to continue in business. Currently, if a company can’t meet its financial obligations, it’s forced into Chapter 11 bankruptcy proceedings and the value of its stock generally tanks to zero. Under my proposal, executives would also have to consider the risk of declaring “social bankruptcy” or “environmental bankruptcy” as they made their business decisions.

As in currently regulated industries such as banking, the final step of losing their charter would not have to be immediate. If a corporation failed to meet its basic parameters, it could be given a warning, with a time period set to fix things. However, the mere threat of this happening would lead corporate executives to make sure they were well above the criteria required to keep their charter.

Corporations are, of course, highly adept at using their financial resources to influence regulatory bodies through bribes and other mechanisms. To avoid this, panel members responsible to renew the charter would be representatives of the communities and ecosystems covered in the company’s scope of operations. Their task would be to weigh up the findings of experienced independent auditors on the company’s performance. To minimize corruption, the panel could be chosen by a process of random selection called sortition, just a like a trial jury is chosen in our legal system.

3. Tax stock trades based on the length of the holding period

Powerful as they are, even corporations have their masters: their shareholders. But don’t think of the typical shareholder as a Warren Buffet type, sitting back in his leather armchair perusing his holdings. Instead, corporate stocks are subject to the frenetic activity of financial markets, where split-second computer algorithms govern much of the trading. Investment firms spend hundreds of millions of dollars enhancing their computing networks to shave as little as three milliseconds off the timing of their trades. The hyper liquidity of global markets means that investors are obsessed with short-term market trends, which leads corporate CEOs, forever anxious about their stock price, to focus their time horizon on the next quarterly earnings report. Financial valuations apply discount rates to future earnings, which means that an investment paying off thirty years in the future can be worth as little as five percent of its future payoff in the present. Under these conditions, why would any CEO care about the state of the planet—or even their company—thirty years from now?

During the 2016 US election campaign, Bernie Sanders proposed a Financial Transaction Tax to pay for free college tuition, setting the rate at 0.1% of the transaction. In Europe, discussions are under way to apply a similar EU-wide tax. My proposal increases the tax rate by orders of magnitude, and differentiates based on the length of the stock holding. For example, the tax rate might look like this:

• 10% if the stock is held less than a day
• 5% if less than a year
• 3% if less than 10 years
• 1% if less than 20 years
• Zero if more than 20 years

The effects of this single step would be enormous. The financial services industry would be transformed overnight. High frequency stock trading and same-day traders would disappear. The short-term orientation of the stock market would be replaced by carefully considered long-term investment decisions. A typical mutual fund, which in the US currently turns over its portfolio at the rate of 130% a year, could no longer afford to do so, and would have to change its investment decision-making based on sustainable returns. The tax could be waived for individuals experiencing a life-changing event or for simple hedging techniques where, for example, farmers need to lock in the price of their produce at a future time.

The result would be a massive shift away from destructive extractive industries and toward sustainable businesses. For example, the fossil fuel industry is recognized to be vastly overvalued as a result of its “unburnable carbon”: the amount of fossil fuels in the ground that can never be burned if the world is to keep climate change below the 2° rise agreed at COP21 in Paris. A recent study estimates the overvaluation as high as $4 trillion. Investors, however, play a game of musical chairs, hoping they won’t be the ones left holding the stranded assets. This proposed transaction fee would incent them to dump fossil fuel investments immediately for opportunities in renewable energy with longer-term payoffs.

4. Cap on billionaire’s assets over $5 billion

As corporations have taken increasing control of the global system, they have catapulted founding shareholders and their heirs to previously unimaginable pinnacles of wealth.  The combined wealth of the world’s 2,754 billionaires is now $9.2 trillion, an amount that has doubled in the past six years, and increased tenfold since the beginning of this century. The magnitude of this wealth is difficult to conceive. The top six billionaires own as much as the lower half of the entire world’s population. Taken together, the world’s billionaires would represent the third largest economy in the world, behind only China and the United States, with wealth equivalent to the GDP of Germany and Japan combined.

There is no legitimate rationale for this outrageous concentration of such wealth in a few individuals. The argument that the founders of Microsoft, Amazon, or Facebook deserve such excessive wealth is no more valid than the belief of the ancient Egyptians in the divinity of their Pharaoh, or the Medieval notion of the divine right of kings. Mark Zuckerberg, aged 33, currently owns over $70 billion. If someone had singlehandedly miniaturized the transistor, developed the logic for computer code, invented the PC, and come up with the internet, then maybe they’d deserve having close to that amount as a reward for the value they created. But all Zuckerberg did was figure out a way to connect people up in a network that became a bit more popular than other networks, and because of the internet’s scale effects, he was the lucky one who hit the jackpot. Zuckerberg merely took advantage of all the other infrastructure work that led to the internet, painstakingly pieced together by millions of people over decades, which has been the real value creator for the world.

In response to this excess, my proposal is to cap billionaires’ wealth at, say, $5 billion. It’s an arbitrary amount, still obscenely high and presumably more than enough for those who argue that people should receive ample financial rewards for success. Beyond a certain level of wealth, however, what drives these people is power and prestige. This could be tapped by requiring them to donate their excess wealth to a trust over which they could retain some influence.

Such a trust, however, would need to have some strict criteria. While the billionaire could influence the trust’s priorities, he would not have control over its activities. The current Bill and Melinda Gates Foundation, for example, while a step in the right direction, is under the total control of the Gateses and Warren Buffet. The foundation set up with much fanfare by Mark Zuckerberg is viewed by experts as little more than a fancy tax dodge.

Each trust would need to avoid interference in a country’s political system and be dedicated to life-affirming activities, the scope of which could be based, for example, on the principles of the Earth Charter, a framework for building a just, sustainable and peaceful global society endorsed by over 6,000 organizations.

The positive impact that these trillions of dollars could have on human and natural welfare would be prodigious. Imagine a country the size of Germany and Japan combined dedicated entirely to serving human and natural flourishing. It would have the resources to end extreme poverty, increase regenerative agriculture to over a billion acres worldwide, educate hundreds of millions of girls through the Global South, disseminate up to a billion clean cookstoves, and much, much more.

The billionaires of the world, meanwhile, would continue to enjoy enormous wealth, and when they jet to Davos to hobnob with other luminaries for the annual World Economic Forum, they could finally have something worthwhile to boast about.

5. Declare a crime of ecocide at the International Criminal Court

Even with all these constraints, the powers of transnational corporations would remain enormous, and there would still be times when, through willful negligence or intentional bad faith, corporate action causes massive environmental damage. A UN study, which remained unpublished, found that the world’s largest companies had caused over $2 trillion of environmental damage, which would cost a third of their overall profits if they were forced to pay for it. Because of their extensive political influence, even their most damaging activities go unpunished. This leads to my final proposal: to declare a crime of ecocide at the International Criminal Court (ICC).

The ICC is an independent judicial body set up by international treaty, the Rome Statute, in 2002 to prosecute war crimes, genocides, and crimes against humanity. While it continues to face serious challenges to its enforcement powers, it has had the effect of putting tyrants everywhere on notice that they can no longer act with impunity. If ecocide—the loss, destruction, or severe damage of an ecosystem—were declared a crime by the ICC, this could have a similarly daunting effect on those corporate tyrants who currently know they can get away with devastating the world’s “sacrifice zones” where they are pillaging the earth’s resources for profit.

There is a campaign, Eradicating Ecocide, already under way to make this happen. A model law has been drafted, and an Earth Protectors Trust Fund has been set up to permit common people everywhere to become legal Earth protectors. If a two-thirds majority of the Rome Statute signatories were to approve this as an amendment, it would become enforceable globally. Suddenly, corporate boards and CEOs everywhere would realize they are no longer above the law.

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There is a strange paradox to consider about these proposals.  One the one hand, notice how limited they are in scope. Even if they were all implemented overnight, the global system would not be overturned. People would still go to work and get paid, food would still be on the shelves of the grocery store, the same governments would still be in power, and the internet would still work. The gaping structural inequities of our current world order would continue unabated, and we’d still be consuming far more than our planet can sustain. Ultimately, we need a complete transformation of our global system if our civilization is to survive intact through this century.

On the other hand, it doesn’t take a political genius to realize that these ideas are so far from mainstream thinking that they have virtually no chance to be adopted any time soon. They would be considered too radical for even the most progressive mainstream politician to endorse. What does this tell us about our current political dialogue? To me, it suggests that our conversations are too severely constrained by what we’re “allowed” to think in terms of how our system works. We need to cast our gaze outside the norms that our billionaire-controlled mainstream media permits us to consider.

Imagine a world where these ideas (or others like them) began to be seriously entertained. How would they even be enforced? The only way corporations could be brought to heel, or billionaires compelled to give up their excess billions, would be a concerted effort led by the United States in conjunction with the European Union, and joined by the preponderance of other countries.

This, of course, could only happen if grassroots demand for these ideas spread so powerfully that politicians had to take notice. This is not such an unrealistic scenario, given the worldwide disavowal of the dominant capitalist model: most Europeans have a higher opinion of socialism than capitalism, and even in the US, the overwhelming majority see big business as unethical and unfair.

Then, there is the potential “trim tab” effect of adopting these ideas. Even though these proposals alone wouldn’t fundamentally transform our system in the way that’s needed, they might set changes in motion that could eventually take us there. There may be other ideas more effective than these, and of course each proposal contains within it complications that would need to be worked out carefully. However, my hope is that these ideas invite a new mode of political dialogue, along with a recognition that even in the darkest times, realistic pathways exist toward a thriving future for humanity and the natural world.

When the Occupy movement failed to achieve its initial promise, many people pointed to its lack of specific demands as a reason for its demise. If and when the next radical grassroots movement emerges, which may be sooner than you expect, let’s make sure they have an array of ideas such as these in their quiver to focus public opinion on actual political deliverables.

There are very few people who really want to see our civilization collapse. If these proposals eventually did get implemented, perhaps even the executives of the transnational corporations might sleep better at night, knowing that they can become part of the solution rather than a force of destruction.

Jeremy Lent is author of The Patterning Instinct: A Cultural History of Humanity’s Search for Meaning, which investigates how different cultures have made sense of the universe and how their underlying values have changed the course of history. He is founder of the nonprofit Liology Institute, dedicated to fostering a sustainable worldview. For more information visit jeremylent.com.

The post Five Ways to Curb the Power of Corporations and Billionaires appeared first on P2P Foundation.

Fanatical belief in cryptocurrencies lead to the perfect becoming the enemy of the good. Michel Bauwens takes us on a tour of what’s good.

The future of tech: the next billion seconds are the most important in human history as technology transforms the way we live and work. The rate of change we will experience will be the fastest humanity has ever seen. Award winning podcast creator and journalist, Mark Pesce is an inventor, writer, entrepreneur, educator and broadcaster whose work and global connections in all things internet and tech extend back to the early days of the web. He speaks to the brightest minds shaping this new world and creating the future via smartphones, connected devices, artificial intelligence and beyond.

Here’s a P2P Foundation post about “10 blockchain projects to keep an eye on“, including: The Possible Project and ShareRing. (ShareRing is Australian, so we do our best to have them on CRYPTONOMICS in our next series!)

The Bill & Melinda Gates Foundation’s Level One Project promises to bring cryptocurrency and smartphone-based trading to the developing world.

Finally, the Regen Network, which sees in itself a complete rewriting of how we account for value in civilisation.

Photo by markchadwickart

Republished from Cryptonomics.show

The post Podcast: CRYPTOPIA – Mark Pesce interviews Michel Bauwens appeared first on P2P Foundation.

What’s the issue?

Thresholds and allocations are easiest to understand by thinking of doughnuts and pies. Seriously.

Oxford Economist Kate Raworth popularized the idea of environmental and social thresholds by envisioning a doughnut: its outer edge represents “ecological ceilings” (i.e. Planetary Boundaries), or “do-not-exceed” limits of resource use beyond which natural systems start to collapse; its inner edge represents “social foundations,” below which societal systems start to founder[i].

And a “slice of the pie” is the best way to envision allocations, or a proportionate share (slice) of the full stock of a resource (pie). Think of water in a watershed, which needs to account for natural processes (e.g. evaporation; plant, animal & human consumption, etc…) before being divvied up between commercial / industrial users.

But now that you know what thresholds & allocations are, so what? How do they help us better understand how best to use our shared resources in ways that ensure their ongoing availability?

The idea of thresholds & allocations isn’t new. In fact, the concepts grew out of the notion of “capitals” as stocks of resources that generate productive flows, which are vital to support well-being (see below for a visual overview of the history of novel contributions to this thinking).

The key to achieving sustainability is to respect the carrying capacities of the capitals, as Reporting 3.0 Advocation Partner Mark McElroy established in his 2008 Doctoral Dissertation (applying the carrying capacities concept from the field of ecology). And McElroy also proposed a Sustainability Quotient for expressing thresholds, whereby sustainability (S) equals actual impacts (A) over normative impacts (N) — think carbon footprint over carbon budget.

And Reporting 3.0 notes that most practice in the so-called sustainability space (think CSR, ESG, etc…) amounts to numerator-only work, focused on incremental improvement that falls short of sustainability thresholds. As Reporting 3.0 Steering Board Member Brendan LeBlanc of EY notes, “the only thing more dangerous than no progress is the illusion of progress.” We at Reporting 3.0 also like to point out that thresholds and allocations are always being employed (resources always have upper or lower limits of viability, and use of a shared resource alwaysrequires parsing it out); the main question is how consciously resources are used and shared.

The key “marriage” of thresholds & allocations started with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines in its second generation (G2) released in 2002, which introduced the Sustainability Context Principle that tied micro-level organizational impacts on the multiple capitals to macro-level economic, social, and ecological systems viability. Ideally, this would have inspired companies to make this vital micro/macro link in their management, performance, and reporting in order to operationalize sustainability.

Unfortunately, a 2017 study of 40,000 sustainability reports issued since then found that only 5% make any mention of ecological limits, and only 31 of 9,000 reporting companies (0.3%) integrate such limits into their strategy and product development. Reporting 3.0 calls this the Sustainability Context Gap.

What can you do about it?

In its 2015 Raising the Bar report, UNEP succinctly summarizes what companies can do:

All companies should apply a context-based approach to sustainability reporting, allocating their fair share impacts on common capital resources within the thresholds of their carrying capacities.

A number of initiatives have spawned in the past decade to help operationalize thresholds and allocations:

• Employ Context-Based Metrics, such as Science Based Targets for greenhouse gas emissions reductions and Context-Based Water Stewardship Targets;
• Implement the UN Guiding Principles on Business & Human Rights;
• Utilize the Vital Capital Index in agriculture and assess synergies between sustainability impacts;
• Consult the Embedding Project’s Road to Context for guidance;
• Set “break even” and “positive pursuit” goals using the Future Fit Business Benchmark;
• Apply systems-level considerations and measure influence in investment decisions, as advocated by The Investment Integration Project;
• Conduct scenario analysis (with guidance at the TCFD Knowledge Hub) and produce transition plans to <2°C business models (as advocated by Preventable Surprises);
• Use the MultiCapital Scorecard.

In additions to these actions, Reporting 3.0 provides a comprehensive approach to applying thresholds & allocations through a number of fit-to-purpose tools:

• Mapping: The Reporting 3.0 Strategy Continuum (covered in Part 5 of this series) enables plotting of practices, impacts, business models, etc. on the spectrum from incremental improvement through sustainability (defined by thresholds and allocations) to regeneration and thriving;
• Implementation: The Reporting 3.0 Integral Materiality Process (covered in Part 6 of this series) applies thresholds and allocations in its context-based approach to materiality;
• Governance: The UNEP Raising the Bar report also recommends: Multilateral organizations should collaborate to create a global governance body of scientists, governments, businesses, NGOs and other stakeholders to provide guidance on methodologies for determining ecological (and social) thresholds, as well as guidance on approaches to allocations, all of which are broadly applicable to the business level.

Reporting 3.0 is enacting this recommendation by establishing the Global Thresholds & Allocations Council (GTAC) with a 3-prong mission:

• Identify thresholds & norms for sustaining the carrying capacities of systems-level capital resources in the commons that are vital to stakeholder wellbeing, based on a comprehensive review of research in physical and social sciences and practice in the field.
• Design and validate allocation methodologies that apportion fair share responsibility for jointly preserving and enriching capital resources vital to stakeholder wellbeing.
• Disseminate consensus-based thresholds/norms/allocations with “off-the-shelf” ease-of-use in mind to facilitate global mainstreaming of such practices.

What will you have achieved afterwards?

Application of thresholds and allocations is a necessary precondition for achieving truly sustainable organizations (at the micro level), industry sectors, investment portfolios and bioregional habitats (at the meso level), and economic, societal, and ecological systems (at the macro level). Indeed, thresholds & allocations approaches enable fulfillment of the transition from shareholder value creation to shared value creation (which aligns financial and social value creation while overlooking value destruction) to system value creation– which harmonizes financial value creation with the enhancement of social and ecological systems in which the economy operates.

What question will we discuss next time?

How Can New Lenses of Risk Help Ignite Breakthrough Transformations?

[i]The idea of outer and inner limits was first proposed by Barbara Ward in the Cocoyoc Declarationat a 1974 joint UNEP / UNCTAD Symposium.

Please add your feedback, the authors Ralph Thurm and Bill Baue of Reporting 3.0 will look at all responses. Don’t forget to ‘wave’ if the above resonated with you ;-).

[Context of this series: The sum of these articles form the basis of an Implementation Guide that summarizes the total value of Reporting 3.0 in implementing a future-ready sustainability strategy and disclosure approach, in line with the idea of a Green, Inclusive and Open Economy. By posting these articles here Reporting 3.0 seeks feedback in the writing process of the final document, released as Blueprint 5 at the 5th International Reporting 3.0 Conference in Amsterdam, The Netherlands, on June 12/13, hosted by KPMG, see www.2018.reporting.org]

Photo by .Jops.

The post What Are Thresholds & Allocations, and Why Are They Necessary for Sustainable System Value Creation? appeared first on P2P Foundation.

This week we are talking about deepening democracy in our communities through participatory budgeting and participatory decision making more broadly. We’re joined by three great guests: Shari Davis of the Participatory Budgeting Project, Lorian Ngarambe of the Rochester-Monroe Anti-Poverty Initiative, and Yale University Ph.D. student Alexander Kolokotronis.

Adam Simpson: Welcome to The Next System podcast. I’m your host, Adam Simpson. Today we’re talking about participatory budgeting and, more broadly, broadening the scope of democracy in our communities and movements. We have a great group of guests lined up, starting with Shari Davis, co-executive director of the Participatory Budgeting Project. Shari, welcome to the program.

Shari Davis: Thank you so much.

Adam Simpson: We also have Alexander Kolokotronis, a Ph.D. student at Yale University, and founder and board chair of the Student Organization for Democratic Alternatives. Alex, thanks for joining.

Alexander Kolokotronis: Thanks for having me.

Adam Simpson: And we also have Loriane Ngarambe, a community engagement specialist with the United Way. Loriane, it’s great to have you with us.

Loriane Ngarambe: So excited to be here.

Adam Simpson: Shari, can you start us off with just a brief intro into participatory budgeting. What is it? How does it work? What are some of the benefits and limitations?

Shari Davis: Sure. Participatory budgeting is something that gets me really excited. I’m a person who worked in local government in the City of Boston, Massachusetts for just about 15 years overseeing youth services. While I had seen a lot of really interesting and innovative approaches to community engagement, participatory budgeting was an opportunity to explore that in a way that I hadn’t seen before. My first introduction to this was in my role overseeing youth initiatives. The mayor coming to me saying, “I really want young people to play a leadership role, not just a figurehead role, in how I govern and in how I make the City of Boston better.” When a community, a school, an institution adopts participatory budgeting, it really marks a change in the way that they govern, and a change in a way that they have a relationship with their constituency or broader community.

From that initial introduction, I learned that participatory budgeting is relatively new in the United States, but, globally, it’s been around for several decades. That said, the way that we practice it in the US is also a bit different. The first thing that happens, and my favorite part to ensure transparency, is that community members come together to write the rules that will govern a participatory budgeting process. Then we enter the idea-collection phase, where we collect hundreds, if not thousands, of ideas on how to spend a pot of money to make a community better. We’re not talking about the entire public budget; we’re talking about identifying a space, a line item in the budget, where we can make some decisions together.

After we collect those ideas, we go into the next phase, maybe my most favorite. This is proposal development. This is where community members come together and form a couple of committees to review all of the ideas that have come in based on need, feasibility, and impact. This is an important piece around ensuring equity, not only for the projects that come in but the projects that make it onto the ballot. They work alongside agency or institutional staff to distill and vet those projects so that we have final projects for the ballot. Nothing makes it on a participatory budgeting ballot unless it can really happen if it gets enough votes.

We enter the almost final phase then, the voting phase. Unlike traditional local or national elections, the voting phase is usually a bit longer. It can last a week. And the vote goes out to where people are. That steering committee, and the folks that have been involved in the process, really think about who is typically left out, and how do we really center their engagement in this process, so that their voice is heard. After the vote phase, the projects with the most votes are implemented, truly enacted in the community, until that pot of funds runs out. Then the process begins again the following year, after an evaluation.

When a community, a school, an institution adopts participatory budgeting, it really marks a change in the way that they govern and a change in a way that they have a relationship with their constituency or broader community. That’s the quick-and-dirty overview.

Adam Simpson: Wow, so much to dig into there. Thank you for that, Shari. In particular, you mentioned that participatory budgeting isn’t a new idea. I’ve actually read in some of your work, Alex, that the tradition of participatory democracy having both international indigenous roots. Can you say a bit more about this and how you view participatory budgeting fitting into that historical tradition?

Alexander Kolokotronis: Sure. Traditionally, I think we connect these things to direct democracy, and we think of ancient Athens. But I think a lot of recent work, in the last few decades, has been connecting up this notion around participatory democracy to the Iroquois Confederacy here in the United States. Most recently, in explicit work on participatory democracy, Michael Menser really foregrounds this in his beginning chapters of his book, We Decide. But on through that, into history, we see a lot of other instances of participatory democratic praxis on a wide scale. So, of course, there are the traditions I’ve just mentioned, but then we see larger cases in the 20th century, such as the Spanish Revolution in the 1930s. Then, of course, the coining of the term, participatory democracy, in the ’60s by Students for a Democratic Society in their Port Huron Statement, which itself has a lot of international renown.

Often, if I mention that some of the things I’m looking into with my own research include SDS, Students for a Democratic Society, I’ll hear people from various parts of the world say, “The Port Huron Statement and participatory democracy.” But its practical roots really, really lie in different areas of the world, including right here with the Iroquois Confederacy.

Adam Simpson: Now, there are a variety of ways that participatory budgeting can be deployed. In Loriane in Monroe County, New York, this was part of the antipoverty initiative that you were involved in, which incorporated a participatory budgeting process. What do you think was different about the outcomes, and the initiatives, of that process, as opposed to the outcomes that would have been advanced from a more top-down process, either from city leaders alone, or social impact investors, nonprofits, et cetera? What do you think was different about the fact that this process to alleviate poverty in the Rochester, Monroe County area because of the participatory nature of it? For so long, you’ve always had content experts, people who understand poverty and the issues that people are going through, because it’s the work that they do or it’s what they studied. But context experts are those people who understand poverty because it’s literally their lives.

Loriane Ngarambe: This is the thing I always use whenever I’m talking about communities, or other community engagement efforts over at RMAPI: It’s always that the people closest to the problem are closest to the solution. And for so long, any time people are talking about poverty, and strategies, and solutions you always have this top-down approach. I look at this through a context of content experts, and context experts. And for so long, you’ve always had content experts, people who understand poverty and the issues that people are going through, because it’s the work that they do or, maybe, it’s what they studied. But context experts are those people who understand poverty because it’s literally their lives. They understand it through, and through, because it’s not just a nine-to-five thing for them, right?

Adam Simpson: Right.

Loriane Ngarambe: When they go home, they still have to deal with the poverty. At night, they deal with it when things are good. When things are bad, they understand it at a deeper level. A PB process really allowed an opportunity to see just what happens when you give these context experts an opportunity to really tell you what makes sense for them, right?

Adam Simpson: Right.

Loriane Ngarambe: The PB process allowed for ideas to come up that could be sitting at tables for decades and an idea like 24-hour daycare, that was one idea that came out a couple of times when we’re doing idea collection. It’s just like, “Wait, why isn’t that something that happens more often?” You have A, B, and C-shift jobs, but when you think of daycare, it’s usually for people who are working A-shift. But then there’s all these jobs that are available, and people, especially single mothers, aren’t able to take advantage of them, because they don’t have something like 24-hour daycare, where they can be secure on where they’re leaving their child. It’s things like that, that make the PB process make sense because they’re able to bring ideas and propose solutions that a content expert may not think about, because their understanding to the problem is limited to their experience.

Loriane Ngarambe: So PB just allowed us to really highlight what happens when you co-create solutions with community, rather than come up with an idea, a creative solution, and then present it to the community that has to live with the consequences of whatever decisions are made. So PB just allowed us to highlight that, and it’s really given us a lot of momentum, and energy, and buy-in from the community, as well, too. Now, you have people who then, as part of this process, that say, “We want more. How can we be more involved? What are more opportunities where we can really let our voices shine through?” And it’s just been an incredible experience for us.

Adam Simpson: That’s something I want to ask about directly. I think Shari mentioned a little bit what the process of participatory budgeting looked like, but I’m interested, particularly, in how you get people involved and engaged. I know that a lot of people, they have work, they have, as you mentioned, childcare, they have so many duties going on. Did you find it difficult to get people engaged? What were the strategies you employed there? In your experience, were people really eager to get involved?

Loriane Ngarambe: The main strategy that we used, that was really important, was meeting people where they were at, and not making this be an additional thing that they have to do. For instance, in idea collection, just getting out there and getting people more informed and engaged with what was going on. We would go to places like our Department of Human Services, where people are going to be sitting there for hours anyway to get their benefits or go to their appointments. So, instead of making a meeting, later on in the evening, where they have to find their way there, meet people where they’re at, go to schools, go to libraries, go to rec centers, go to churches, meet people where they’re at. Identify your key communities’ members, people who already have those relationships, people who will be advocates for what’s going on.

It’s a ripple effect, essentially, right? We’ve identified our 20 key people who really understand what PB is and are really for it. So they start going onto their networks and that’s, really, how the engagement bloomed, how the engagement grew. Then you’d have people hitting up our Facebook page, people reaching out to us because their cousin, who goes to their church, told them about this thing that they’ve been taking a part of. That’s really how we were able to get that engagement going. It wasn’t because of what me and my colleague, Graham, are doing. It was more about the people who understood this for what it was and were passionate about it, and so they were looping in their neighbors, their friends, their family. That’s really how the engagement happened.

Then just meeting people where they’re at, mitigating barriers. If we knew that childcare was an issue, then we made sure we had childcare available at a meeting that we had. We made sure we had food. We had giveaways, if people needed it, just to incentivize people to be able to get there, so it’s worth their time, essentially. I don’t want you to have to leave your kids to come participate and be engaged; bring them with you. We’ll have things for them to do, as well, too. Just meeting people where they’re at and being cognizant of the barriers they need to be facing and how you can help mitigate that. That was really important for us.

Adam Simpson: Wow. That sounds like a really amazing process. Shari, could you say a little bit about this and your experience? What do you see as the most successful strategies for getting the community engaged in these participatory processes?

Shari Davis: Well, one thing I want to just underscore is this principle that was mentioned before, and that’s around content and context expertise. I often say, “If I were to build a building, I would get an expert.” I would go get an architect because I don’t want the building to fall down. So, if I’m going to build a healthy community, I need experts to do that. I need people that live, walk, breath, and exist in that space on a regular basis. When we’re infusing their ideas, impact, and, really, voice, we’re able to build communities that are responsive to generations to come. I think that’s a really important piece here.

In terms of what we’ve seen work, and how this really works is, is centering those folks—who now we’re turning to as experts, and have always been experts and leaders in their own right. But if we’re going to center their engagement, we have to design the process with them, and not for them, and that’s why this steering committee component is so important. If we want single parents, or parents period, to participate, then we have to really think through childcare, times that we’re meeting. If we want young people to be in the room, then we probably can’t meet at 10 a.m. on a Tuesday. These considerations and the design process are essential. And that’s not me, Shari, or other members of PBP, that make those decisions. It’s the important folks that are on the ground, the folks that work in government, but especially those that are of the community that we’re trying to engage in a participatory budgeting process, really need to be at the helm of that design.

That’s what we’ve seen work in Oakland, where there’s no minimum voting age, anyone of any age, as long as they can interact with the materials, can participate. That’s what we’ve seen work in the City of Boston, where young people reported being more likely to engage in their community or being more likely to vote in a local or national election, as a result of participation. That’s what we saw in Phoenix, Arizona, where the entire school district engaged in a participatory budgeting process. And, last year, nearly a thousand of those young people that engaged in the PB process also registered to vote in local and national elections.

That’s what we’ve seen be a big piece of success is making sure that community, and those that are representative of their community, are really involved in the design process early, and in a way that they can make some decisions.

Loriane Ngarambe: Just to add to that, real quick. Here, in Rochester, we have a community advisory council. This is made up of community members who have decided to take on that extra time to really be involved with what’s going on, and provide input and guidance to the solutions and programs, and conversation, that are being had around what’s going to be happening with our communities. They played a really important role in the education part of introducing PB to the community. We brought it to them. We explained what it was to them, and they helped with the creation of our steering committee, and getting the word out there. Just to back up that statement, that was a huge, huge component of this, as well, too for us.

Shari Davis: I think you were touching on something that’s super important, and I know Alex can attest to this too. Often times we see councils and engagement strategies, and the councils may work, sometimes they’re a bit defunct, so participatory budgeting can be a way to really build robust advisory council level support. And, to your point, really allow them to infuse the beginning stages of planning that lead to the steering committee creation. And, in the City of Boston, we saw that with the Mayor’s Youth Council. They became huge ambassadors and key to the success of participatory budgeting, and really ran this process, and continue to now. I know that’s true, in terms of what Alex has seen, on the university scale, as well. Things like participatory budgeting on a very, very simple level allow people to connect with one another and identify different things in their neighborhood that they didn’t even have any awareness of.

Alexander Kolokotronis: Yeah, to add to that. At the university scale what we’ve seen is—and you’ll find this again; this is another product of the ’60s—so many schools have a series of advisory committees in every aspect of the school structure, in terms of making school policy, or making recommendations for school policy. What we found, when we were doing our participatory budgeting process at Queens College, was that there were all these committees for different things, related to finance, related to buildings and grounds, related to all these things. As we looked through the lists, nearly all the students’ seats were vacant. It really astonished us, because it was clear that in a school with 20,000 students, there was an opportunity there and that no one, nearly no one, was taking up this opportunity to push things forward.

At the same time, we were recognizing that these are advisory structures and, after all, we, ourselves, are pushing for a process where we actually had decision-making power and weren’t simply being shuffled off into advisory seats that we were afraid might not affect change. But the result in having a participatory budgeting process is that people felt anchored, and felt able to try out, maybe, also sitting on some of these advisory seats, and, maybe, also having that feedback into the participatory budgeting process itself at Queens College.

The effect has been, over the last few years, that students have consistently found certain committees are really great to work within and are able to push things that sometimes may spill out of the PB process. For example, we have, at Queens College, a lot of technology projects have been pushed, rather simply having those projects having funds allocated through PB itself, they’ll be brought into the technology feed committee and will be pushed that way. We’ve seen, in that case, a lot of spillover effects in terms of the preexisting advisory structures and how PB not only provides people with the confidence to step up into positions in those councils or committees but also brings in the information and all the different perspectives that are accumulated through PB into those advisory structures themselves, affecting change in a lot of different ways.

And that’s what we’ve seen, where projects have been, ultimately, taken up and have been funded well beyond the PB process itself at Queens College.

Adam Simpson: I’m really interested in what your views are, all of you really, on participatory processes at different layers beyond different governments, including universities, as you mentioned, Alex, or neighborhoods, and workplaces, et cetera. But maybe, in an effort to begin gesturing toward that, I think one of the really resonating things to me about participatory budgeting is that the community—and this is what I’ve heard from Shari and Loriane—is being treated explicitly as the actor rather than something that’s acted upon. Alex, I wanted to ask, in your research, have you seen what effect this level of gesturing toward direct democracy has on broader social participation and building a sense of community and community wellbeing?

Alexander Kolokotronis: Absolutely. I think, actually, this indirectly gets back into one of the earlier questions you asked, in terms of traditions that this all derives from or is related to. A big push in the first half of the 20th century, and is now, of course, creeping back in and is something that is often addressed by The Next System Project is a push towards workers’ control, towards cooperatives, and towards, really, trying to reshape the workplace from something that is seemingly separate, or it feels separate, from us to something that actually can constitute a community in its own right.

Things like participatory budgeting, I think, do the same thing for neighborhoods, and for any institution that’s using participatory, or has a participatory, budgeting process where people might feel quite apart and distinct from their neighborhood. That’s something you’ll experience, for example, in New York City, where I’m from, where people often get caught up in their daily commute, caught up in a lot of the different transformations of New York City, where, maybe, a lot of locally owned businesses have now terminated. A lot of the community and civic life has slowly been drained. And, of course, New York City has been a big battleground for things like this, when we think of, for example, Jane Jacobs in the ’60s and ’70s, and the fights around neighborhoods and maintaining a neighborhood vitality.

Things like participatory budgeting on a very, very simple level allow people to connect with one another and identify different things in their neighborhood that they didn’t even have any awareness of. This is something I’ve seen time and again. But, in terms of my own research, I really look at participatory democracy within public schools. There are a few reasons for that. One, actually, connects to what Shari and Loriane were talking about. I view the adult-child relationship as the first iteration of the expert-layperson relationship. For me, when I think about these issues in terms of expertise, when it comes to architecture, when it comes to medicine, or when it comes to physical infrastructure, and we talk about the very particular distinctions between expertise in all those realms, I try to get at that thinking about, “Well, how is this expert-layperson relationship constructed from the very beginning and, particularly, within schools?”

Alexander Kolokotronis: I think one thing that we see in schools is that kids, and children, and teachers themselves, often experience the school as theirs, like “This is my school,” or “At my school, we’re doing this.” But, at the same time in their daily life, their daily experiences, they don’t necessarily feel the school is really theirs. Something like participatory democratic processes, including PB, really allow for people to not just take ownership of the school, and take ownership in the sense that what is theirs is actually really theirs, but that they are an agent, as you push forward, within that setting and can constitute themselves as a collective agent in the process.

I’ve seen that in my own research in the way in which students and teachers at more traditionally and, dare I say, authoritarian-structured schools have a far different sense of, and range of emotions, when it comes to their setting, than those, even if there are problems and difficulties at participatory democratic schools and trying to build a community around that, as well. I mean, that might be a long-winded way of getting at that, but I think we see that daily in the daily distinctions between different types of schools and how well incorporated people are, in terms of acting within them.

Shari Davis: Alex, you bring up something that’s so important to me and, as you were talking, I was just thinking about one thing. That is, a lot of what we talk about when it comes to democracy—and we haven’t talked about it or defined the problem—there is no secret that a lot of folks are not happy, or feel that government is not designed for the benefit of all. There’s been reasonable research on this, and I think that one part of the long-game strategy to addressing this bigger problem is to change government, and to change who’s in government, so that government looks like the people that we see in communities, so that they’re familiar with the issues, and so that there is more of a conversation, and there’s not this big divide between those individuals.

How do we prepare folks for roles? Not everyone necessarily wants to be, or is interested in being, an elected official. There are so many roles in government that serve community and I ask myself this question: What does lifelong civic engagement look like? What does onboarding look like? I was a young person who started working in government as a teenager and had nearly a 15-year career in local government, and that was unique. How do we not make that a unique story and make that an opportunity that folks can really attain, and lean into, and explore, especially as a young person? I think, to Alex’s point, introducing that in a school context is so important, and then can become foundational. And organizationally, at the Participatory Budget Project, that’s why we’re not only focusing our efforts on the county level, and citywide level, and regional, and larger scale PB, but we’re also really focusing on school, and school-district level PB, because it’s so important to empower our young leaders that are not future leaders but are leaders today, and need tools and support. [Participatory budgeting] is a way to crack that door open, and now we just have to figure out how to keep that door open, because you have people who, when their eyes are open, want to be more involved.

Loriane Ngarambe: For us, we also had our Mayor’s Youth Advisory group that was heavily involved in this whole entire process. And the energy that they brought, and just the innovation that they brought to this process, it wouldn’t have been what it was without them. To just piggy-back off of when you’re trying to say, “How can we get communities that are more centrally engaged?” You’re right, it is foundational. It needs to start early on.

I know when we would go out into the community and tell people about what this PB process is, you have community members who almost feel siloed from the democratic process that’s going on. You have these people in position of power making decisions, but, to them, it’s like, “I got to figure things out for me. I don’t have time to worry about what they’re doing or how they’re doing it.” Because, in their minds, decisions that are being made are not being made with them in mind because, if that was the case, then these decisionmakers would be way more informed about what really matters for people living in poverty. They’d be more aware of what is it that community members are doing that works, that we can build from, what is it that community members are missing that we’re missing on our end, as well.

This process, a lot of it, was just relationship building and education, as well, too, really informing community members of the power that their voices have. The power that they have, as a collective, when they really stand up and say, “Hey, enough is enough,” or “This is what we need. This is what should be happening.” In RMAPI community engagement, it’s a huge cornerstone, a huge part of the work that we’re doing, because we understand poverty is not going to be reduced, eradicated, or any other word, if community is not a part of what’s going on.

Again, I keep saying this, PB is a way to crack that door open, and now we just have to figure out how to keep that door open, because you have people who, when their eyes are open, want to be more involved; they want to know, “How can I, in my sphere of influence, do something that can make a difference? How can I be more involved? How can I be part of this greater democratic process? What does that look like? There just needs to be more education and strategies around making sure people get the information that they need. So, whatever they decide to do with that, at least, they have that information.

Adam Simpson: I want to turn from how we’re thinking about community engagement and broadening this scope of democracy, and think about how racial equity fits into that. Shari, I know I’ve seen you highlight, and you, as well, Loriane, in the Rochester-Monroe Anti-Poverty Initiative, a participatory budgeting process as a pathway to creating racial equity, and bring that, really, out of frame and into focus. Shari, could I start with you? Can you tell me about the impacts you’ve seen and how participatory budgeting, and participatory processes, in general, can really begin building pathways toward racial equity?

Shari Davis: Absolutely. Since 2009, the first instance of participatory budgeting in the US, we’ve seen over 400,000 people be empowered to decide how to invest over $300 million on community projects in over 30 cities across the United States and Canada. The participatory budgeting projects have played a lead role in most of these processes in US and Canada at some point. For us, ensuring equity, and racial equity, in particular, is a little bit different in every space. No two PB processes are the same, but, honestly, I can’t find two communities that are the same.

With that said, layering in the important elements of racial equity, it really goes back to design. That means, who is designing the process? What are the considerations that they’re making? And how are we ensuring that this process is really centered around people? People that are, you could say, often left out, but these end up being the folks that are easiest to ignore. With that said, I think a lot of our strategy around racial equity is having honest, open, and transparent conversations, and allowing folks to be on the same side of the table. A key element to that is excellent facilitation and training folks to be able to hold space, so that they can have some group agreements, and really be able to dig into some things.

I’m really interested to hear how this rolled out in Rochester, in practice, and I can give a few other examples.

Loriane Ngarambe: I know, when we were designing the process, there was a lot of time and emphasis around making sure that this made sense for our community. What does that look like? We wanted to be very intentional about reaching to, but also reaching past, the usual suspects, as I like to refer to them. Anytime there’s anything new that comes into Rochester, those engaged community members are always there. But we wanted to make sure that we were making an effort to reach behind them, to the people who are not engaged for whatever reason. When our steering committee first came together, there were a lot of honest, sometimes uncomfortable, conversations that needed to be had to say, “All right, so why is it that anytime something new comes to Rochester, the people who are going to benefit from it the most, are always the last to hear about it.” And when they hear about it, it’s usually when decisions are already made. There’s a plan already being rolled out, and they didn’t know anything about it, but what can we do, this time, that’s different?

Having those intentional conversations was really important. They did so much work in creating the guidebook and making sure that they were taking into consideration things that normally wouldn’t be taken into consideration. So having single mothers at the table, having young people at the table, was really important as well. Then having predominantly context experts and then having people, who I call the hybrids, context experts who also are content experts, so they can live in both of those worlds. They’re almost like culture brokers, so they know how to navigate both of those worlds, and being able to think practically like, “Okay, this is something that’s going to make sense,” or “This is something that’s not going to make sense,” and just encouraging those conversations. As staff persons who are helping facilitate this process, we wanted to make sure this was as community-led as possible.

We wanted to do everything on our end to mitigate barriers, to mitigate influencing what these guidelines or rules that they laid out look like, and just really making sure this was community-led, and community-owned. I think it made a huge difference for this process to be what it was.

Shari Davis: Loriane, I have a question for you. First, let me just commend you, because I think often folks get nervous when we talk about opening up transparent processes that center race and, really, that center tension. I think that there’s a way that tension can be healthy and tension can be toxic. But I’m curious if you can talk a little bit about your experience in moving this through government and getting to a “yes” and dealing with some of the strong hesitation around being so transparent. I think folks are often afraid that it’s going to be counterproductive and not productive. You’re telling a different story. I know a different story. How do we get there?

Loriane Ngarambe: Yeah. At RMAPI, we were lucky enough to be able to roll out this pilot PB process without having to do it through government. Our process wasn’t through a city government. We secured the funding, and we helped roll out the process. So, as a result, we didn’t necessarily have to deal with the red tape of government and the bureaucracy that lies everywhere. We were able to really make the process whatever is the community members who were helping design it be what it was. Then, also, at RMAPI we have our three guiding principles of addressing structural racism, being trauma informed, and community building. This is something that we infuse in everything that we’re doing.

Any project, any solution, any process, conversation that’s being had, these guiding principles are meant to be utilized as lenses in which we’re doing all of this, so that we’re not just sitting around sugarcoating what the real problem is. We’re trying to deal with the root causes of why we’re here, and what we’re going to do, and what’s going to make the most sense. Having these tense conversations goes with the territory of doing RMAPI work. So having the right people in the room, and being able to sit in those moments, was interesting, because it was almost the community members themselves guiding that process. When you were in moments of tension, moments of people not sure of how to receive what was being said, just sitting in that moment and facilitating: Where are people’s heads at? How do we move past? What about this do you not understand? Just allowing the space to really get through that, I think, is and was really important.

Shari Davis: Adam, the reason why I very much tagged Loriane in on this is because I mentioned no two PB processes are the same. But a big piece in addressing racial equity is grassroots leadership, and that usually looks like a strong community-based partner that is very much involved in this, because they have the connections, they’ve done a lot of this work, and they have a really good sense of the landscape. Oftentimes we’re talking about bringing these folks together, making these connections, getting them on the same side of the table. I can’t think of one PB process where this wasn’t the case, where there weren’t really strong relationships with community-based organizations that were centered on things like racial equity, housing inequality, gentrification, and really inviting those folks to be at the forefront who are doing some of this deep engagement.

Shari Davis: We need those community ambassadors, whether it is a youth council, an advisory board, or, really, those groups that have the deep relationships in communities with those folks that are often hard to reach, is a key element to centering this process and really using a lens of equity, racial equity, gender equity, and these other pieces. We have to be clear on the goals at the beginning of the process, otherwise they will not show up in the design.

Adam Simpson: Before moving on, I wanted to follow-up, Shari, on something you mentioned earlier about the first PB project in the United States, or in North America, maybe, you said, beginning in 2009, now, over 400,000 participants across the country. I get a sense that PB is spreading, and I wanted to ask, why do you think that is? Why do you think? Maybe, it’s something to do with this particular moment or maybe it’s something that the idea is just compelling to a lot of people. But why do you think PB is growing in this popularity, in this particular moment?

Shari Davis: Well, I think, to be honest and completely transparent, we’ve seen some slower growth of participatory budgeting in the United States compared to what we’ve seen in some other places. I think there are a few things to think about here. In Paris, France, for example, they do a PB process with over 100 million euros, a school-based process, a district-based process, and a city-wide process. The mayor has committed 5 percent of the budget to be decided on by folks that live in the City of Paris. So it can be that big. We’ve seen countrywide PB in Portugal. We’ve seen really big large scale PB processes in other places across the world. And, I think, we’re starting to see some real growth of participatory budgeting in the US since 2009. And, as I mentioned, the practice of participatory budgeting is different in every process, but it’s also a bit different in the United States, and it should be, because the context in the US is a bit different.

I do think that we are seeing a continued growth, and there is a moment here for us to think about what participatory democracy looks like overall, and really, for us, to think about what civic engagement looks like beyond just voting, and what building pathways to lifelong civic engagement are. And, I think, participatory budgeting is not the silver bullet or the only solution, but is one of some innovative solution that should definitely be considered in addressing this. And I think we’re in a moment where we’re seeing an uptick, and a real desire for things like PB.

Adam Simpson: Absolutely. I just want to follow-up on that. As a tool for building community power, and a sense of community cohesion, I’m hoping to hear from folks about how far they think these processes can go beyond budgeting, really, to local issues like zoning or economic development plans. The recent fiasco with Amazon HQ II in New York City comes to mind immediately. But being conscious that one of the criticisms I’ve heard about PB is sometimes that of the decisions that are put on the table by various local governments, et cetera, the amounts of money involved are relatively small, or the decisions involved are not as consequential as they could be.

Maybe we could start with Alex. Do you think that participatory budgeting, or participatory processes more generally, could be applied to bigger economic decisions whether we’re talking about the state level, or the regional level, or even the federal level, or is there really, truly a scale dilemma and this is much more appropriate for municipal processes? I’m just wanting to get a sense of the scale and what are the limitations or the potentialities.

Alexander Kolokotronis: This is a question I thought about for years. Recently, I started to think about the criticism of PB, and what that criticism says in the more underlying way. I think what the criticism of PB does is that it actually says something about the way we understand money. The way we understand money is really this very orthodox neoclassical economics-based outlook of seeing money as something really separate from us. If you take an Econ 101 class, the way it starts, and the thing that animates it all the way through, is the supply and demand curve, and that’s that.

Somewhere the consumer and the producer are supposed to meet at this optimal space. The whole point there is the service or good being exchanged. Money is external to that. Money is not seen as really a part of that. Money is just this separate thing that, at best, maybe helps facilitate that private meeting or exchange. This is the private money story, where we really start our barter. Now, and I think in recent years, what’s really taken off, especially with modern monetary theory, is another story that is more historically based, that it’s not that we were born as these isolated individuals who come to market and then separate; we’re really born into a community, and when we think of things that way, we understand provisioning far differently.

Let’s say I’m looking for a shoe and someone else is looking for a bottle of water. Instead of understanding it as, “Well, we so happen to have this double coincidence of loss, so I’ll give you want I need, and you’ll give me what I need.” It’s rather more like, “You have this, I owe you one.” Then that person, who I’m exchanging with, owes someone else one. Then we come to the question of, well, what is one? One of what? This is something covered really well in David Graeber’s Debt: The First 5,000 Years. We see that this story is not really barter comes first, then money, and then credit. It’s really credit comes first and then money.

The reason why I’m taking this story and bringing it here is that when you think of it this way, money is really a part of, and really emblematic of, the community that we’re building. And money is not really the super-private isolated thing. Actually, money is public. And if we think of it that way, things like participatory budgeting are not simply this add-on thing. Think about participatory processes, like participatory budgeting, as actually really necessary to community control. They’re not simply a tool for someone to maybe pat themselves and look better. And they’re certainly not necessarily this thing that some on the left will criticize as things that are just about crumbs and don’t really get at bigger things.

In fact, I think a really big power of participatory budgeting is it gets at the very question of how we experience money. In our day-to-day lives, we experience money as something completely alien to us, whether it’s our boss who pays us, whether it’s a government that bureaucratically allocates funds, or whether it’s money in terms of the sense in which we don’t have it. What I think you experience with PB is actually really unique and almost a rupture in how we relate to each other through money. We start to see money as not this necessarily disgusting alien thing that’s above us and controls us, or that we lack control in relation to. I mean, you can think of when someone might feel quite ashamed of spending money. I mean, all these dynamics. All of these are reversed or upended, when we do something like PB, where people start to relate to each other through, “Well, how are we going to allocate funds?” Participatory budgeting is an absolutely necessary component to any version of community control at any scale.

I think PB is an absolutely necessary component to any version of community control at any scale. As Shari was referring to, there are some national initiatives, such as in Portugal, with national PB process there, and there have been statewide PB processes, such as in Ontario, Canada, or in Rio de Consul, Brazil. So there have been some initiatives to try and get at this, and it’s really about, I think, getting at the mechanics. But PB is, I think, connecting very much with modern monetary theory, and I don’t think it’s absolutely coincidental that we’re seeing these things dovetail, in terms of their rise in the current political moment, that we’re fundamentally re-understanding what money means, or can mean, to us, and that it neither has to be this thing that is a fetish, as Marxists, might frame it, as the only way money can exist, nor does it have to be a thing where it’s something that we just have to, as a result of being a fetish, feel ashamed of even touching. Rather, it’s something we have to embrace and redesign to have an experience of something far more shared and something that will facilitate the provisioning of community-building, of individual fulfillment, such as you see in the project development phase, where people are individually really cultivating their own projects. These are all things that PB points the way to and, I think, it’s something we have to add more to.

Adam Simpson: We’re getting really close to time, so probably this is my final question. Given what Alex just said, I want to ask you, Loriane, the outcomes of the antipoverty initiative that you were involved in, in the Rochester, Monroe area. The outcomes touched housing, they touch food scarcity, so many different things. And the way Alex was talking about, they do have to do with money, but also these are also very much policy issues. I wanted to know, specifically, what’s your thinking on this? What are the limits of participatory budgeting from just your recent experience of participatory processes? Do you think that it’s possible to engage in the way that you’ve been engaging, in the Rochester community, to make these broader decisions about the local area, and the different bigger economic decisions more broadly?

Loriane Ngarambe: Right. At the Rochester-Monroe Anti-Poverty Initiative, our goal here is to bring system change. So, there’s a lot of information gathering that is required. There’s a lot of understanding of what is a problem; what’s been done that wasn’t working, that’s working; What are some new strategies; what are some new solutions. I think, more than anything, what the PB process does, as I keep saying, is brings community into this conversation and, now, we have to figure out a way to keep community as part of these conversations and part of this solution-creation. But then, also, it sheds light on what the real problems are. It sheds light on not just the problems, but what some of the assets are within our communities that are so often overlooked. Because, when you’re talking about poverty, you come at it from such a deficit point of view and often overlook just how people are making ends meet, how people are living day-to-day with the dire circumstances that they’re living in.

When you’re talking about systems-level change, when you’re talking about policy-level change, all those conversations require evidence, and PB, for us at least, I would say has been a great tool, a great process to bring to light what evidence exists. Because it’s really hard to look at over 2,600 people who voted on the projects that won, because these are things that they feel are important and should be highlighted, and should be regarded as conversation builders around how to really support individuals living in poverty. I think it just provides the evidence to be able to change policies and change systems in a way that, if this was just a closed-door process, when just policy makers stand on policy gains, it wouldn’t be as effective, and it wouldn’t be able to get to the core of what it is that people really actually need to live self-sufficient, full, and complete lives.

Adam Simpson: I know I said that was probably my final question, but I’m going to kick this to Shari, if you don’t mind. I just wanted to get your perspective, just a closing comment given what was just said by Alex and Loriane, on your view of participatory budgeting in the context of system change.

Shari Davis: I think Alex and Loriane raised some really wonderful points. One of them that’s sticking with me is, when we’re talking about participatory budgeting, we’re not talking about blowing up or highlighting only problems. We’re talking about thinking through solutions. That includes really doubling down on the assets that exist in place, building them out, understanding what to duplicate and invest in. Participatory budgeting is about understanding community spending priorities, government spending priorities, and having an opportunity to reconcile them. This is about an opportunity to lift up the lid, invite folks in, and do things better. Ultimately, we’re talking about building more sustainable, effective, and responsible communities. This truly is an opportunity for us to maximize the finite resources that we have to serve folks the best way that we can. This is one strategy of many to do exactly that.

In terms of broader systems change, participatory budgeting, when adopted, marks a real change in the way that folks do business, a real change in the way that government operates. For me, and for many folks, this is a beginning of a larger participatory democratic wave that, I hope, really is fueled and ignited, so that we can see things like participatory budgeting really take hold and become the way that we do business.

Adam Simpson: I can’t thank you all enough for joining me today to talk about participatory budgeting, and all of your work around it. Just a final thank you to Shari Davis, Alexander Kolokotronis, and Loriane Ngarambe. Thank you all for joining me today on the podcast. It’s been a pleasure.

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