We must bring money back down to earth. -- Slow Money Principle #1
This fall I attended the 2011 Slow Money Conference in San Francisco, California. The annual conference brings together a unique combination of investors, entrepreneurs, and farmers to create social change. For an interview with Woody Tasch, Founder & CEO of Slow Money, please go to the Green Girl Minute.
What is Slow Money? Lets start with the notion that the 20th Century was an era of buy low, sell high. The United States witnessed enormous growth. But we also learned that "there is such a thing as money that is too fast, companies that are too big, finance that is too complex."
Slow Money's mission is to bring money back down to earth. "What would the world be like if we invested 50 percent of our assets within 50 miles of where we live? What if there were a new generation of companies that gave away 50 percent of their profits? What if there were 50 percent more organic matter in our soil 50 years from now?" Local economies and communities would grow and investors would be connected to the places where they live.
"The only true economies are nature's ecosystems," stated Keynote Speaker Wes Jackson, Founder & President of the Land Institute. Think of forests, oceans, rivers, deserts, streams and prairies. These are all self-regulating economies that continually create life and resources upon which we depend. Our current problem, evidenced by global climate change, is that we do not understand natural limits and carrying capacity. It's as if we do not appreciate that we actually have limits on earth.
Wes Jackson argued that we are in need of rationing and a cultural restraint on consumption. In a world with a changing climate, shrinking wildlife habitat, and sixth great extinction, we have bumped up against the wall of natural limits. It is time to reorient our worldview.
Importance of Agriculture
Agriculture is of utmost importance to our survival. Wes Jackson argues for a sustainable green revolution which would merge ecology, evolutionary biology and agriculture. As our dollars are invested in bigger corporations, located farther away from the land we live upon, we lose the quality and connection to our food. Wes Jackson argues that if we can save our soils, then we can get through climate change, stating that "soil is more important than oil." Instead of shareholder interests and corporate balance sheets, ecology and evolutionary biology should inform our research agenda and investment dollars. It may be wise to invoke the wisdom of Charles Darwin, the most important biologist since Aristotle, who synthesized natural history and genetics.
Investment Case for Local Economies
Leslie Christian, the President and CEO of Portfolio 21 Investments, spoke about the investment case for local economies. Our modern portfolio theory is flawed, argued Christian. Modern Portfolio Theory states that risk is quantifiable, there is unlimited growth, and the market is one-dimensional. In contrast, Christian believes that this is not the way the world works and is in direct contrast to nature. Christian articulates a more accurate and meaningful principle in the investment world: evolve to non-quantifiable integrated risk, selective growth, and multi-dimensional utility.
We are facing ecological limits and operating as if they are finite. "The end of the world is a rounding error in your net present value," stated Tom Steyer, the Billionaire Philanthropist. Slow Money offers a path towards building an "era of nurture capital, built around principles of carrying capacity, care of the commons, sense of place, and non-violence." Slow Money is perfectly poised to bring our money back down to earth.
Paul Newman once said, "I just happen to think that in life we need to be a little like the farmer who puts back into the soil what he takes out."
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