Slow Money

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= 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

1.

"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)


2.


Marcia Stepanek:

"With slow money, Tasch is taking a page from the slow food movement, the 23-year-old movement that calls on consumers to treat the act of eating less as a hurried distraction and more like a family ritual that celebrates community and takes time out to reflect upon the labor involved in growing the food that we eat. "Money should move the same way," says Tasch. "This isn't just about finance but the relationship of finance to culture."

In short? Tasch wants to persuade grassroots investors to "take the power back" over their communities and start putting some of their assets into local businesses they can see and watch and [in this case] even taste. He wants them to measure growth not by numbers of dollars so much as the yield of a local crop and the health of a local community. He acknowledges that investing in sustainable local agriculture will yield below-market returns. But he says nobody will lose money; these returns, he says, will be solid - maybe a 3 percent profit or maybe 6 percent one over many years.

But the real dividend of slow money, says Tasch, is social, economic, and biological diversity. In an era of industrial agriculture, when millions of acres are planted with the same variety of corn and when millions of pigs are bred for their yield, small local farms are "the ultimate hedge fund," he says. "Fix the broken food system, and many other social, economic, and environmental benefits will follow."

So far, Tasch says, his slow money movement has 700 members, including about 50 people who have sent in $1,000 checks over the Internet and small local enterprises such as Vermont's Butterworks Farm, a $1 million annual yogurt business, as well as Let's Be Frank, a Berkeley, Calif.-based hotdog company, and Sky Vegetables and Local Harvest. At the Sante Fe slow money convention in September, there were 450 attendees from 34 states and six countries, he said. "Now we're trying to get 1 million people to sign the slow money principles and from that, build capacity."

He admits that early investors may not be "big money people" but instead, small money investors who are "frustrated with philanthropic foundations [that can sometimes invest their endowments into places that don't help the environment] and frustrated as philanthropists." Says Tasch: "We must bring money back down to the Earth. It's time to restore a bit of reality back into all of our lives." (http://causeglobal.blogspot.com/2009/11/slow-money_08.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2Fcnbv+%28Cause+Global%29&utm_content=Bloglines)

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 Template:P 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 (hence Template:P, so it may create local wealth and prosperity.


More Information

  1. Slow Money Principles
  2. Video at http://www.youtube.com/watch?v=X3_whekB2w4

See Also

  • Demurrage, an economic proposal by Silvio Gesell to make bills lose their value gradually.