Slow Money

= a term inspired by the Slow Food Movement: Basically, slow money is about slowing the velocity of money: having it passed around a few times in the community before it is used to buy iron from China or coffee from Venezuela. [1]

Description

"Just as people now question the traceability of their food, in a similar way, so are they more concerned about how and where the money they invest is being used By investing in ‘Slow Money’ as opposed to ‘Fast Money’ – synonymous with the anonymous world of global finance, investors may have to commit their funds for lower returns, but they will know where their money is going, how it is being used and will experience both a financial and social return – known in financial terms as ‘Blended Value’." (http://www.wessexrt.co.uk/nfm.html)

Discussion

Stowe Boyd

"I maintain it [slow money] is more grounded: the aware customer wants to know where the milk in the chocolate is from, or whether the company takes back its empties, or whether local manufacturers create the packaging. Once people buy into the logic of local, they want the money to go around the community in as many cycles as possible before leaving, because those economic cycles mean social capital is built up, and local resilience is increased.

It's a slow money movement, where the outputs of one local economic transaction is the input for another local economic transaction, binding the parts closely together, and making the whole stronger, and the local environment richer.

It's not just comfort, Jeff: it's tribalism. We want to keep the money close to home, as long as possible, because the people closest to us are the ones most likely to care about us, and to take us into their circles.

So when we make economic choices, it's no longer just cost, or convenience. Just as we have rejected the ease and convenience of littering -- which was commonplace in my childhood -- we need to move past the superficial benefits of cheap goods distributed by global corporations. Even when the products are equal, the impacts of having the money stay local create an exponential impact. The local accountant gets work, the local marketing firm, the local packaging plant, the local farmer: all are benefited. And it comes back to us, in a richer and more dynamic local environment. We get the second and third order benefits.

The alternative is that local economies become thin, like soil that has had decades of pesticides and inorganic fertilizers piled on it: the microorganic life that makes soil rich is all gone. Then, without the enormous inputs of fertilizers and pesticides, there is no crop. If we let the organic richness of local business die off, we will be a fragile as overfarmed pasture, and what is left could blow away after a single season of drought." (http://www.stoweboyd.com/ground/2009/02/a-depression-era-deflation-remedy-the-money-go-round-the-economist.html)

John Robb

Reproduced from John Robb in Global Guerillas:

“Within a successful transition to a resilient community, one of the earliest signs of progress will be a radical decrease in the community’s monetary velocity. Essentially, this means that an ever increasing share of the money that flows into your community, stays within your community. Money, otherwise destined for big corporate retailers, the international banking system, and Asian exporters (the essence of global velocity), stays in the community. This in turn enables the investment flows require for the construction of community platforms (local systems that simplify and accelerate critical activities) that both guard against dislocation/failure in the short term and mint/drive wealth in the long term.

The short term shift to slow money won’t be made due to the desire for a lifestyle change or because it is the trendy “eco” thing to do. Some improvements in food quality or a diffuse feeling of fuzzy warmth won’t suffice to drive these changes. Instead, it will be driven by a hard edged need to enhance the long term economic and physical security of you and your family. Drivers include:

• Cost reduction. A substitution of time for money. Repair over new. Savings growth.

• Mutual support. The local sourcing of goods and services. Strong local relationships/networks vs. arms length/anonymous relationships with global retailers/service firms/banks. A strong hedge against dislocation or an inability to access global supplies/services. Increased flexibility though an ability to negotiate or a potential for barter.

• New sources of income. Local production of goods and services. Sales of excess food, energy, and services. A slow discarding of “global consumer” (a slur…) status in favor of “local producer.”

(http://globalguerrillas.typepad.com/globalguerrillas/2008/11/slow-money.html)

Stowe Boyd has a very similar message:

“It’s a slow money movement, where the outputs of one local economic transaction is the input for another local economic transaction, binding the parts closely together, and making the whole stronger, and the local environment richer.

… We want to keep the money close to home, as long as possible, because the people closest to us are the ones most likely to care about us, and to take us into their circles.

So when we make economic choices, it’s no longer just cost, or convenience. Just as we have rejected the ease and convenience of littering — which was commonplace in my childhood — we need to move past the superficial benefits of cheap goods distributed by global corporations. Even when the products are equal, the impacts of having the money stay local create an exponential impact. The local accountant gets work, the local marketing firm, the local packaging plant, the local farmer: all are benefited. And it comes back to us, in a richer and more dynamic local environment. We get the second and third order benefits.

The alternative is that local economies become thin, like soil that has had decades of pesticides and inorganic fertilizers piled on it: the microorganic life that makes soil rich is all gone. Then, without the enormous inputs of fertilizers and pesticides, there is no crop. If we let the organic richness of local business die off, we will be a fragile as overfarmed pasture, and what is left could blow away after a single season of drought.

And we are headed into a bad patch, where the downturn could crush small business everywhere. So we need to redouble our efforts to act local, even as we are aware of the global problems. Think Slow Money.” (http://www.stoweboyd.com/ground/2008/11/small-is-the-ne.html)

Martien van Steenbergen

The Template:P can be a way to keep money streaming locally when you have a local or community currency. The {[p|local force}} is the percentage of purchasing power you gain when exchanging foreign money for local money. For example, when you have a local currency, the ƒ (florin), say, and ƒ1 equals €1, a Template:P of 5% means that you only have to pay €95 to get ƒ100 purchasing power in the local community. This process is symmetric: exchanging ƒ for € you pay ƒ100 and receive €95.

This does not slow down money, but tends to attract foreign money and keep it local, so it may create local wealth and prosperity.