Designing a Minimalist Economy With Alternative Ownership Structures
|Jennifer Taylor Chan||Jul 2, 2019|| 1|
Over the long weekend, I read a fascinating book by Marjorie Kelly titled, “Owning Our Future: The Emerging Ownership Revolution.”
The central thesis of the book is that more and more people are experimenting with alternative forms of ownership aimed at creating prosperity for generations to come. Kelly travels across the world to learn from those who have prioritized profit sharing, collective ownership, and sustainable environmental practices.
The book is worth reading in its entirety but I thought I would share some of the case studies that were mentioned.
In 1983, the term“resident-owned community” began to spark, with its origins in New Hampshire. It began when a group of residents of the Meredith Center Trailer Park faced eviction from an out-of-town developer who wanted to purchase the land.
Instead of admitting defeat, the residents of the park obtained a loan from the New Hampshire Community Loan Fund and bought the park outright.
That stroke of ingenuity, or grace, or whatever it was, grew into the loan fund’s Manufactured Housing Park Program, which uses a cooperative ownership model to help people in mobile homes and other kinds of manufactured houses purchase the land on which their homes stand. The process works a legal transformation in the nature of their property. Manufactured homes previously viewed by banks as personal property(inthe same category as a car or a boat) become real estate. That means they get better loan terms. It also means, as studies show, that residents plant more flowers, attend more school conferences, enjoy higher property values, and move less often. By owning the land where they live, a community of low-income people becomes a communion of subjects, their homes no longer a collection of objects viewed by an absentee landlord as a way to extract maximum rent.
It’s intriguing to me that the resident-owned community model was devised by a financial institution. It wasn’t a big bank with executives striving to make multimillions for themselves. Yet this loan fund has nearly $70 million under management. And it pays investors up to 4 and 5 percent interest annually, at a time when bank certificates of deposit are paying a fraction of that.
Community Development Corporations
Later in the book, Kelly recounts her experience with Keith Bisson, owner of Coastal Expertises Inc., a community development corporation based in Maine.
Through Costal Expertises Inc., five lobster fishermen were able to obtain a loan of $380,000 in order to setup the North End Lobster Co-op. Since its inception, the co-op has expanded to 24 lobster fishermen as members and supports more than 40 families, and each member earns roughly $30,000 - $50,000 per year.
Prior to the co-op, individual lobster fishermen would often fish on the town wharf and buy their own bait and fuel, forcing them to pay premium costs from wholesalers. In Maine, only 25 miles of the 5,300 miles of shoreline are delegated to fishing and marine industries.
Now as a result of joining the co-op, the fishermen have guaranteed access to water (the co-op put a working waterfront easement on the property), a place to store their traps and boats, and buy bait collectively at better prices.
The co-op has also arranged for a lobster buyer to regularly visit the co-op so that lobsters can be efficiently moved.
For lobster fishermen, this is a big deal.
This is all part in thanks to Costal Enterprises Inc., which has a unique mission: to create local ownership and local wealth by investing in rural, environmentally sustainable enterprises. Its primary industry, as the name implies, is fishing.
At the time Owning Our Future was written, Coastal Enterprises managed roughly $700 million dollars.
The Dairy Cooperative
The last example I’ll mention here is Organic Valley, an organic food brand and independent cooperative of organic farmers based in Wisconsin.
It is the nation’s largest farmer-owned organic co-op that generates more than $700 million in revenue per year. It is owned by approximately 1,700 organic family farms. For its organic milk, the company pays a price that is traditionally 60% higher than the commodity price farmers receive for non-organic milk.
When Kelly met with the CEO, George Siemon, she asked him about the economics of Organic Valley, who explained:
We’re not trying to maximize share price but maximize mission… Most CEOs wake up in the morning and look at their stock value and sweat bullets about how to raise it. When you take away that whole aspect, you now have a clearer focus… We don’t have any need for profits much over 2 percent. We’d just pay taxes on it. We’d rather give it to the farmers.
A Key Ingredient to a Minimalist Economy?
Kelly provides compelling alternatives to the traditional, profit-hungry companies, which I think can be useful when we contemplate what a minimalist economy might look like.
A minimalist economy is not, on its face, anti-growth but rather disputes that singularly focusing on growth is sustainable.
Ending growth does not mean shuttering all economic activity but rather producing and consuming less than our current rates.
From what I gather from Kelly, organizations that incorporate some form of collective ownership value sustainability (in terms of profits, stakeholder well-being, and environmental impact) over short-term gains.
Forgive the law nerd in me but these recommendations are exclusively law-entered.
Reading: I’ve Picked My Job Over My Kids by Lara Bazelon (NY Times)
A powerful op-ed from a criminal defence lawyer who shamelessly explains that sometimes her clients need her more than her children. My interpretation of this piece is that work-life balance is irrelevant when it comes to certain high-stakes careers. I am inclined to agree.
Listening: At Liberty by ACLU (Podcast)
A high-quality podcast from ACLU that interviews various ACLU lawyers and other progressive legal professionals on the biggest civil rights issues of the day.
A short documentary on Netflix that follows three women (a judge in Drug Court, a fire chief, and a street missionary) battling West Virginia’s opioid crisis. It specifically focuses on Huntington, West Virginia, where the overdose rate is 10x the national average. I was particularly taken with the judge’s story and how she approaches the cases that come before her.
Administrative Note: Due to an abundance of professional commitments this summer, Deliberate Discourse will temporarily move to a bi-monthly newsletter (twice a month).
See you on July 16th.