Woody Tasch’s “Slow Money”

I read this book last year and couldn’t stop thinking about it.  It captures a shift in thinking that has come with the hard economic times.   It advocates for a new idea without axe-grinding, sort of nibbles around the edges of it, so willing readers fill in the blanks for themselves. – JF

Inquiries into the Nature of Slow Money, Investing as if Food, Farms and Fertility Mattered

Woody Tasch, Chelsea Green Publishing

Money, writes Woody Tasch, only knows one speed, faster.  It was unthinkable only a few decades ago, but now trillions of dollars circulate through financial markets every day, zipping around the world in cyberspace, bundled into financial instruments of dizzying complexity.

The faster money goes, the more it disconnects from natural time and the more it disconnects from people. “Should we be surprised”, Tasch asks, “that money has become so attenuated to capital markets and so separated from the needs of people”?

This former venture capitalist is looking for a new paradigm that serves people first, not just the markets themselves.  Three years after the 2008 credit collapse, with the effects now spread across the globe and looking more and more persistent, it seems clearer than ever that something has gone seriously awry.

Our present capital markets really developed at the beginning of the industrial revolution, when new industries needed sources of finance.  The world had a small population and vast untapped resources.  Unlimited growth seemed to make sense.  No one could foresee that we would one day be limited by rapidly diminishing energy and natural resources.

Tasch, the former market insider, says today’s fast money is rarely patient enough to invest in businesses like small organic produce farms.  In “Slow Money”, he proposes a new, more patient kind of market based on “nurture capital”, one that values the restoration of local communities, clean water and soil fertility as much as growth.  A market that provides sustainable industries like community-supported agriculture with the capital they need.

“Slow Money” tries to weave financial markets and soil together.

Why soil?  Our corporate farms, where pesticides and fertilizers help keep yields artificially high and investors happy, are helping accelerate the loss of the globe’s arable land, currently disappearing at 0.5% per year.  The worst part is we don’t really know much about soil, and we haven’t really learned how to build it quickly.   He is only half-joking when he suggests we call the present day “peak soil”, a term first coined by bio-fuel opponents. “Could we really run out of dirt?” he asks.

“Slow Money” challenges us to find markets that preserve the qualities of a place, its soil, its ways of growing food, ways of sustaining the local economy and culture.

The effect of global food and consumer markets is insidious and often destructive.  He writes,

“Distant markets do not attack us directly.  They come bearing gifts, food out of season, cheap foreign goods, 24 / 7 opportunities for Internet surfing.  Our focus shifts from here to there.  We lose focus of the household as a locus of production and settle (for) the household as merely a locus of consumption.  We chose (computer) screen over gopher hole, swallow’s nest, the wail of a gentle pre-dusk breeze, screen over the general store that is on the market and stocking only beer, motor oil, chips, a smattering of canned goods, as if to symbolize the life that is trickling out of this place; screen over the demise of farms, the departure of our children in search of better paying jobs. “

Tasch describes an epiphany he had while at a conference.  He heard someone ask Wal-Mart sustainability consultant Adam Werlach why Wal-Mart still needs to keep growing if it really wants to go green.  His answer was, “The market demands growth.”

This got Tasch to thinking, in that case “maybe it’s time to create a new kind of market”, a market based on the principles of place and sustainability, Terroir.  In “Slow Money”, Tasch proposes a Main Street Exchange where finance is used to restore communities and ecosystems.

In exchange for liquidity and predictable earnings, investors would be able to provide capital to small independent, farms and food distribution companies.  Investors would also be rewarded for low turnover and longer holding periods.   Some profits would be turned over to non-profit local trusts.  Municipal bonds could eventually be sold.  The exchange would limit the size of companies, because beyond a certain size, they often must switch allegiance from place to capital, from restoration to extraction.  Some of these principles sound naïve, but Tasch argues they have become “down-right practical.”   Unlimited growth and its attendant by-products, environmental degradation, poverty and even terrorism, render the development of Main Street exchanges a requirement for our future well-being.

Tasch believes this kind of market can work.  Many smaller companies want more liquidity and access to capital, but strive to be local first.  Their owners don’t aim to go multi-national, or bought out by global corporations.  There is a pool of investors out there willing to invest in a market like this.

His Main Street exchange is starting to take shape.  NGOs, farmers, investors, and food entrepreneurs are working together in different regions of the country to find enterprises to invest in.  Meanwhile, a group of investors is raising an initial sum of $50-100 million to develop a sustainable food enterprise portfolio, so that additional capital can be brought in.

Slow Money avoids partisan politics and blame.   Those who work in the fast-money financial markets and corporate agriculture are not at fault.  “Most folks are greedy”, or at least capable of it, if only to protect their families in a risky world.

Can ten million new farmers feed us at home?  Can small farms feed the world?  We don’t know yet.  But by the end of the book, this former market insider convinces the reader that we might yet succeed in reaching up into cyberspace, grabbing a few of those dollars whizzing around, and pulling them back down to earth to serve the very soil itself, and the communities where everyone has to live.


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