So I’ve been ending my talks with specific, actionable suggestions for how companies of all sizes and stages can become more sustainably profitable in the current environment. It amounts to a 12-step program for getting off the addiction to growth. If you need to grow in order to survive, then you’re not a real business – you’re just a brand name on debt.

Here’s the quintessence of the recommendations to be gleaned from hearing my talks, reading my book Throwing Rocks at the Google Bus, or listening to my TeamHuman podcast. Of course, if you read the book you’ll see the arguments for why these strategies will work, and how they expose the false assumptions we’ve been working under for a few centuries, now. But here are the basic principles.

1. In all decisions, optimize for the velocity of money over the accumulation of capital. How do we keep money moving instead of piling up? If you are sitting on money that can’t be deployed, you are taking too much out of the system.

2. Make them rich. Make your customers, suppliers, partners, and even your competitors rich. If you drain the value from your marketplace, your customers won’t have money to spend with you. If you squeeze your suppliers on margins, they will be looking to do business with anyone else at the first opportunity. If you make everyone who comes into contact with you wealthy, they will want to keep working with you.

3. Employ bounded investment strategies. Think of the US Steelworkers, who invested their retirement money in construction projects that also put steelworkers to work. Or their subsequent decision to invest in projects that hired them to build nursing homes for their own parents. This triple and quadruple dipping is not a conflict of interests, but the leverage that comes with bounded investing. With boundaries, you can generate the cyclone effect required to enhance the velocity of money. Don’t earn ten dollars once; earn one dollar ten times.

4. Push for a tax policy that promotes revenues instead capital gains. Shareholders are addicted to growth of share price because dividends are taxed higher. Reverse the tax code to promote flow over growth. Dividends and payroll should be tax incentivized; passive capital gains, discouraged.

5. Organize as Platform Cooperatives.  Think Uber, where the drivers own the company. Even if they’re getting replaced by autonomous vehicles, they are going to own the company for which their labor served as the R&D and machine learning.  Labor must participate in ownership of the means of production, instead of simply getting a redistribution of spoils after the fact through taxes. Coops like Winco beat shareholder companies like Walmart wherever they compete.

6. Local crowdfunding. If you run a bank or credit union, instead of giving 100k loan to a small business, give 50k contingent on their ability to raise the other 50k from the community, through advance-sale discount coupons. Customers pay $100 for $120 of pizza at the restaurant when it finishes expansion. Locals invest in their community and Main St, instead of outsourcing investment to the S&P, and draining local coffers.

7. Develop favor banks and local currencies. An economy is people with needs and people with skills. They shouldn’t be hampered for lack of a means of exchange. Local currencies and favor banks allow for the exchange of value without borrowing at interest from a central treasury. This also means local businesses in the chain can transcend the artificial growth requirement.

8. Cooperative businesses cooperate. Do everything open source, open API, and without “trade secrets.” Maintaining secrets shows you believe your company’s best innovations are in the past. Sharing secrets means you know your best innovations lie ahead, and that you benefit from everyone being smarter. It positions you as the center of competence in your field, dedicated to promoting a culture of learning and innovation.

9. Larger companies can enact economic experiments as local, limited trials. No need to turn the whole ship. Sell the ideas to the CEO or Board  as public relations stunts, then use their success to promote them throughout company. Walmart can introduce an aisle of locally produced goods; supermarkets can open parking lot to farmers market on Sundays; banks can offer local crowdfunding apps. Promote disruptive ideas as if they are just one-offs, not the radical game-changing innovations they really are.

10. Run your company like a family business. Family businesses do better in every metric than shareholder owned businesses. They make more money in the long run, have better-paid employees, more stability, less damage externalized to the community or environment, and so on. They are concerned with legacy, the family name, the relationship of their own families to communities in which they live, and the company itself as the inheritance they are bequeathing subsequent generations.

11. Develop new metrics for success other than growth. Put them down on paper. How prosperous is the community in which we are operating? How many unsolicited resumes from qualified candidates are coming in? How well are our suppliers doing? Do our frontline employees feel they are being supported by the company?

12. Your goods and services are your product – not your stock. Don’t build a company to sell it to someone else; build it to run it, yourself. Companies are not disposable. An “exit strategy” is for Ponzi schemes. The world is connected. The environment is limited. The economy is circular. There is nowhere to run.

Before emailing me for references for all this, please know that you can find everything in my book Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity. You can even just get it at the library, and use the index to find the answers you want.

Photo by naturalflow

The post 12 Steps to Post-Growth Sustainable Business appeared first on P2P Foundation.

Niko Georgiades: Athens, Greece – Experimenting with alternatives to capitalism has continued to become more popular as huge wealth divides devour chances of relieving poverty across the world. During the summer of 2017, a speaking engagement at the self-organized squat of Embros Theater in Athens, Greece, showcased alternatives to capitalism. In the second of our three part series on alternative economies and community currencies, we spotlight Kenya’s Sarafu-Credit.

Community currencies are types of complimentary currencies shared within a community that are utilized as a means of countering inequality, class, debt, accumulation, and exclusion.

With community currencies, lower-income communities are given the ability to improve living standards by building infrastructure sustainability through networks of sharing, providing access to interest-free loans, and increasing the economic viability of the community.

This is a major departure from conventional national currencies. Most are generated today through fractional reserve banking, wherein units (“broad money” or M3) are created at the bank when loans are instantiated and destroyed upon repayment.

During economic slowdowns including the US Great Depression, the “velocity of money” drops as fractional currency is unavailable. Locally issued “Depression Scrip” substituted for fractional money in the 1930s. Today alternative currencies that improve velocity of money by distributing credit creation power to the whole population are taking root in many countries.

The first speaker of the discussion at Embros Theater was Caroline Dama, a Board member of Grassroots Economics (GE). GE is a “non-profit foundation that seeks to empower marginalized communities to take charge of their own livelihoods and economic future” in Kenya.

Caroline Dama, Board member of Grassroots Economics

Will Ruddick, who started the Eco-Pesa (no longer in circulation), a complementary and community currency, founded Grassroots Economics in 2010, which has created six networks of community currencies that now works with over twenty schools and twelve hundred businesses in Kenya.

In 2013, 200 businesses, 75% of which were owned by women, became part of the new self-organized and self-determined community currency, Bangla-Pesa, in Mombasa’s largest slum, Bangladesh.

Kenya’s government quickly saw the formation of these community currencies as a threat. Five individuals involved with Bangla-Pesa, including Will Ruddick and Caroline Dama, were implicated on charges of undermining the national currency, the shilling. They were all eventually cleared of all charges and the Sarafu-Credit system continues to break new boundaries and change the narrative of alternative economic systems.

SARAFU CREDIT – BANGLA-PESA

Drastic economic and social inequalities run rampant throughout Kenya as at least 46 percent of its population is living in poverty. With basic needs like clean water and healthcare becoming hard to attain, the Sarafu-Credit community currency system was created as a safety net for citizens to improve living conditions.

The word sarafu means currency in the Kiswahilli language. Sarafu-Credit is system of community currencies used as a “regional means of exchange supplementing the national currency system.”

The community in Bangladesh, the biggest slum in Kenya’s second largest city, Mombasa, is very poor and has little access to the shilling, the national currency. Caroline Dama, from GE, stated that the community is “able to come together and come up with a system to exchange our goods and services” using “community dollars.”

A Bangla-Pesa voucher

These community currencies are complimentary with the national currency and Caroline stated that not all of them work towards abolishing the current currency or system, but that they are “trying to make sure that the community banks have a way to survive in times that they wouldn’t otherwise survive.”

“it’s a form of community governance and self-taxation … the community has been able to come up with its own rules to solve its own problems.” – Caroline

GE explains Sarafu-Credit as: “A network of businesses, schools, self-employed and informal sector workers form a cooperative whose profits and inventory are issued as vouchers for social and environmental services as well as an interest-free credit to community members. These vouchers circulate in the community and can be used at any shop, school, clinic or cooperative businesses and form a stable medium of exchange when the Kenyan Shilling is lacking. This injection of money into the community in the form of a community currency, based on local assets, increases local sales and helps directly develop the local economy. Sarafu-Credit, Grassroots Economics’ Kenyan Community Currency program, creates stable markets based on local development and trust.”

How the Sarafu-Credit system works

Caroline stated that only with a bottom-up approach can the community create economic equality. “Communities thrive when they are able to make their own decisions.”

“Community currency gives that power to the people because they are talking to each other, they are able to exchange, and now they are meeting their basic needs, they have enough to sell and when they sell they can pool their resources together to build that better school.” – Caroline

Graph of how the Community Currency Vouchers operates

“If we have problems in the society we want to deal with … what we do, is we can come together as businesses instead of waiting for the government to do it for us”, said Caroline, who stressed the importance of self-determination and community empowerment.

The community currency vouchers are issued for social services and mutual credit for all sustainable needs of the community.  According to the Grassroots Economics website, “The community currency circulates around the community helping to connect local supply and demand for people who lack regular access to national currency.”

Furthermore, Caroline gave an example of women in a village collectively working on projects together, like helping each other build new houses. They would make each person in their network a new house and they would gather the material needed to build the house from other cooperative businesses.

There was a lively discussion with plenty of questions after the presentation on Sarafu-Credit’s Bangla-Pesa. One of the many questions focused on hatching new ideas around sharing-based communities, instead of exchange based communities that could present inequalities based on the ability of services to exchange. Caroline said,

“We are trying to move into a community whereby we are recognizing individual talents … that there is diversity in the community and that we should move away from the idea that we should monetize that. We try to live in a community that recognizes peoples needs, not monetizing them.” – Caroline

Grassroots Economics have created .pdf with their user guide and have plenty of resources on their website. The video below shows how the Bangla-Pesa works.

To hear the full speech and question session of Sarafu-Credit listen below:

For further reading on the Bangla-Pesa, here are a few attention-worthy papers:

• Complementary Currencies for Sustainable Development in Kenya: The Case of the Bangla-Pesa (PDF)
• Re-imagining Money to Broaden the Future of Development Finance – What Kenyan Community Currencies Reveal is Possible for Financing Development (PDF)
• Trust and Spending of Community Currencies in Kenya (PDF)

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