finance

This is the fourth section of an essay, "Relationalized Finance for Generative Living Systems and Bioregions," by David Bollier and Natasha Hulst. The remaining section will be published tomorrow. The full essay can be downloaded as a PDF here. Previous sections appeared in sequence immediately before this one, at these links: Section 1. Introduction & Reframing the Economy Around Bioregioning; 2. Commons as Relational Provisioning and Governance; and 3. Toward a New Theory of Value (and Meaning): Living Systems as Generative. 

4. Toward Socio-ecological Markets

If bioregions are going to become more economically self-reliant and culturally self-directed, they must be able to insulate themselves from the neocolonial workings of global finance and markets. This means that bioregions must be able to assert their own investment priorities and become more self-reliant by intensifying their intra-regional commerce. Their basic challenge is to fend off outside commercial control and extraction (while obviously continuing many commercial dealings) so that the regional economy can benefit from the “multiplier effect” of locally circulated money while ensuring strong ecological stewardship and regional identity and culture. 

Without some deliberate strategies for consolidating market activity within bioregions – making enterprises more interdependent and regionally focused – the priorities of capitalist businesses and global capital will override regional eco-stewardship and self-determination. Attempts to build a coherent regional economy and identity will be subordinated to “free market” imperatives and everything they privilege

It is impossible to prescribe a single strategic template for addressing these issues, however. An agenda this broad, ambitious, and long-term will necessarily vary from one bioregion to another. That said, in conjunction with commons, bioregional market structures and strategies could prod commerce to become more place-committed and socially embedded. These bioregional strategies include:  

A.  Community-designed infrastructures for bioregional production. Community participation in creating and managing small, shared infrastructures can be catalytic for the bioregional economy in general (commercial, commons-based, social, ecological). Shared bioregional infrastructures can reduce overhead, transport, and retail costs. It can make essential services like WiFi access, solar energy, water systems, grain milling, information-sharing, and databases -- more accessible and shareable, all while strengthening social cohesion and bioregional identity.

B.  Inalienable shared assets. Assuring that major bioregional assets like arable land, groundwater, housing, forests, and other “natural assets” remain inalienable – off-limits in perpetuity to private purchase – makes a bioregion more stable and secure. It prevents companies and private equity funds from acquiring essential infrastructure through which they would extract exorbitant rents, siphoning money away from the bioregion. Keeping shared assets inalienable also addresses social inequity by making essential equity assets free or lower-cost, and available in perpetuity. For example, groups like Agrarian Trust (US) and Terre de Liens (France) rely on community land trusts to make land inalienable and stewarded as commons, which has all sorts of salutary effects: farmland for a younger generation of farmers, reduced equity costs that enable organic, local agriculture, and meaningful long-term employment for local residents.

This is the third section of an essay, "Relationalized Finance for Generative Living Systems and Bioregions," by David Bollier and Natasha Hulst. The remaining two sections will be published tomorrow and Saturday. The full essay can be downloaded as a PDF here. 

3. Toward a New Theory of Value (and Meaning)

In rethinking how “nature finance” should be structured, the distinctive modes of value-creation in commons and bounded markets are often misunderstood. Standard economics sees market exchange, money and growth as the only significant engines of wealth-creation, a process that finance purports to facilitate. It is therefore difficult for conventional finance to understand that there are many other distinctive species of “value” that ecosystems and organized commoning generate. 

The word “value” brings to mind money and markets, but the value generated by nature is quite different in an ontological sense. The bounty brought by rainfall, fertile soil, and biodiversity cannot truly be expressed through quantitative proxies, prices, algorithms, or markets because this “wealth” doesn’t exist in static, objectified forms or essentialist identities. Humans may equate fish with food and trees with lumber, but of course fish and trees play many other ecological roles in sustaining life.[12] The value of living entities subsists within their symbiotic relations – the dense web of interdependencies that generates abundance in a robust, self-sustaining system. This matrix is far more complicated than standard economics or markets can begin to represent.

While it’s possible to see abundance in objectified units (a bushel of apples, a hectare of land), the reality is that this value arises only as part of dynamic, evolving living systems whose actual value eludes quantification and monetization.[13]It may take “thirty leaves to make the apple,” as Thich Nhat Hanh wrote, but businesses, fixated on the marketable fruit, have only a narrow, economic self-interest in the leaves, roots, tree trunk, orchard, ecosystem, and weather. 

Inspired by feminist economic theory, J.K. Gibson-Graham proposed an iceberg image to suggest how much of “the economy” actually subsists outside of formal markets, remaining largely invisible and treated as inconsequential. The behaviors enumerated by the illustration below suggest how much economic work takes place in non-monetized forms, outside of wage labor and production for capitalist markets. These robust circuits of value-creation, often marginalized by standard economics and finance, can be seen in the generativity of living systems with sufficient organization: ecosystems of diverse organisms, agroecological farming, permaculture practices, online communities of collaboration, mutual aid networks, gift economies such as blood banks, scholarly disciplines, and artistic circles, timebanking collectives, and so on. Their contribution to “the economy” is enormous, but it is typically understated or ignored.

This is the second section of an essay, "Relationalized Finance for Generative Living Systems and Bioregions," by David Bollier and Natasha Hulst. The remaining three sections of the essay will be published in the remaining days of this week. The full essay can be downloaded as a PDF here. 

2.  Commoning as Relational Provisioning and Governance 

Commoning plays a crucial role in the implementation of bioregional action – and relationalized finance – because it is a proven set of social practices and organizational forms for bringing people together into shared purpose. At their core, commons are vehicles for collaboration and peer governance that are capable of limiting or neutralizing capitalist domination and control. As described in Bollier and Helfrich’s book Free, Fair and Alive, there are recurrent patterns of commoning by which commoners successfully shape the terms of their own governance, provisioning, and allocation of benefits.[6]

Commons are not a new phenomenon; they have been a consistent, productive presence throughout history. Indeed, an estimated two billion people worldwide, operating outside of the market system without private property rights or money, meet their needs through commoning, according to the International Association for the Study of the Commons. This activity can be seen in commons for stewarding land, coastal fisheries, community forests, farmland, water systems, and regional food webs. 

Commoning also manifests in a growing international Commonsverse of projects in diverse modern contexts. Urban commoners use public spaces and buildings, mutual aid networks, alternative currencies, peer-savings clubs, timebanking, and urban agriculture to meet needs. Digital commoners have developed a vast oeuvre of shareable software code, network infrastructures and protocols, Fab Labs and hackerspaces, platform cooperatives, shareable content using Creative Commons licenses, open-access scholarly journals and websites, and open educational resources (curricula, syllabi, videos). The practices of commoning can also be seen in co-operatives, informal care commons, co-housing, and arts and culture collaboratives.[7]

Have you noticed how the term “bioregional” is becoming a new eco-buzzword and greenwashing term? At the same time, many ordinary people are genuinely excited about the idea of bioregionalism as a constructive way to focus activism and socioeconomic innovation. Bioregionalism offers a practical, politically accessible space for addressing climate change, social inequality, the eclipse of democracy, out-of-control oligarchs, and capitalist growth. 

To try to make sense of the current state and future of bioregionalism, my Amsterdam colleague Natasha Hulst and I decided to pull our thoughts together in a just-completed essay, “Relationalized Finance for Generative Living Systems and Bioregions.” 

Because the piece is more than 13,000 words, I've decided to serialize the essay here, with one new section added every day this week. I am also posting a downloadable PDF of the 27-page document here. Natasha will be posting the essay on her Substack as well (link to be added here shortly).

In our piece, we wanted to assess the transformational potential of bioregioning in both a macro-conceptual and applied way. How exactly should bioregional initiatives proceed, and with what theory of change? What role can commons play in actualizing a bioregional transition in the economy? How can the extractive, predatory aspects of capitalism be kept at bay and practices of commoning fortified? What are some of the notable bioregional activities already underway?

Besides exploring these questions, Natasha and I propose an alternative theory of value (to market price), and sketch out various strategies by which (noncapitalist) “socio-ecological markets” might arise and intensify intra-regional commerce. 

The 45th annual E.F. Schumacher Lecture will be given on Saturday, November 22, at 3 pm EST, by Samantha Power and Tyler Wakefield, Co-Founders of The BioFi Project, a leading “think-and-do tank” dedicated to novel finance infrastructures and strategies to support bioregional economies. 

The Biofi Project collaborates with bioregional organizing teams across the Americas—from the Amazon Headwaters to Salmon Nation—to prototype a new generation of financial institutions rooted in place, reciprocity, and planetary repair.

Samantha Power is a regenerative economist, systems futurist, and bioregionalist who co-authored the book Bioregional Financing Facilities: Reimagining Finance to Regenerate Our Planet. Her work focuses on building a new layer of global financial architecture: place-based institutions designed to serve rapid, radical regeneration. For over a decade, Samantha has pursued one central question: “How do we change where money flows so it supports, rather than destroys, life?”

John Thackara is one of the brilliant irregulars exploring how humankind can make the transition to a climate-friendly, relocalized, post-capitalist world. You can't pigeonhole him in any occupational category or disciplinary tradition because he is so effortlessly transversal. He blends his broadly international and nonsectarian perspective with the many particular projects that are Building the New.

This helps explain why Thackara's work is so appealing: It speaks to us as whole human beings where we live, in distinctive local circumstances. While rigorous and empirical, Thackara isn't constrained by the jargon and norms of a particular discipline or theory. Like so many designers, he lives on the messy creative edge where interesting new things are always emerging. (Check out his website at thackara.com.)

On my latest episode of Frontiers of Commoning (Episode #34), John and I have a spirited conversation about the things preoccupying him these days: how to design for bioregional, post-capitalist economies; the many local projects that are quietly making a new world; and corporate subterfuges such as "net zero," carbon offsets, and the financialization of nature.

Thackara, a Brit who lives in the south of France, has taught at major universities in Japan, China, and Italy, and held prominent posts at the Netherlands Design Institute and the Royal College of Art in the UK. Now an independent writer, activist, and designer, John avoids arid abstractions; he prefers to document the practical alternatives to capitalism popping up all over.

Outside of the gaze of formal finance, an often-demonized form of informal social finance flourishes. This finance consists of the regular pooling of money among friends and neighbors. It’s a way for individuals to amass chunks of money for paying for a new (used) car, educational expenses, household emergencies, and other major expenses. The system is relied upon by millions of Black women in Africa, the Caribbean, and North America as a trusted alternative to formal banking systems that often exclude them. 

There are many names for these traditional systems – susu, partner, meeting-turn, box-hand, sol, depending upon the culture in which they arise. But they are generically known as ROSCAs, an acronym for “rotating savings and credit associations.” ROSCAs are a vital way for people of color and modest means to take care of their financial needs when banking systems are unfriendly or unaffordable, often for racialized reasons.

Professor Caroline Shenaz Hossein has studied the Black social economy for years, and especially cooperatives and informal economies. She has paid particular attention to ROSCAs as familiar, practical social vehicles for savings and credit.

In my latest Frontiers of Commoning podcast (Episode #18), Professor Hossein and I discuss the largely unknown realities of informal banking and the power of the Black social economy.

Black people have been “so traumatized by formal finance,” said Hossein, “that there are people who are unbanked or they choose to be under-banked. This means they’ll do the most minimal activities [with banks] because of the horror stories they have to endure – racism. Anti-black racism in commercial banking is not a secret anymore,” she said, which explains why many African-American women choose to “avoid those kind of stresses and engage with people who actually value their humanity” – their friends and neighbors.

How can cooperatives serve as vehicles for social change, especially in online spaces?  What practical interventions could check the anti-social behaviors of Big Tech?  These are two questions that I explored recently with Nathan Schneider, professor of media studies at the University of Colorado Boulder, in Episode #8 of my podcast, “Frontiers of Commoning.”

Nathan is a long-time journalist and scholar focused on social-change movements of resistance, nonviolence, and system-change. Much of his work has focused on the new opportunities that cooperatives and digital technologies can provide in today’s world. He has been especially active in promoting platform cooperatives as a vehicle for moving beyond predatory business models like Uber, Airbnb, and TaskRabbit.

For Schneider, the history of cooperatives is a source of great inspiration and practical instruction.  “Cooperatives are nothing new,” he told me, citing Gandhi’s embrace of coops as a strategic tool to emancipate Indians from the British. “But it is a form of doing business that has shaped our world that doesn’t get enough credit.” For example, people often don’t appreciate that coops were a big element of the civil rights movement, he said.

Martin Luther King Jr. supported African-Americans in starting credit unions, in part because cooperative banking enabled them to become more independent from oppressive local circumstances.  “I interviewed a civil rights elder in Mississippi,” said Nathan, and asked him if coops were around in the 1960s. And he said, ‘Who do you think was getting people registered to vote?’”

Sharecroppers always risked getting evicted from the land if they dared to assert their civil rights or become politically active. But members of coops are secure enough to take risks and join movements, he said. “This is a geography of our world that we don’t see.”

Language is surely one of the greatest political weapons ever invented because it invisibly defines the world in narrow ways and can impair our capacity to see and think clearly. This is one of the takeaways I had after looking through Sian Sullivan’s new website, “The Natural Capital Myth and Other Stories,” which collects twelve years of her writing (2008 to present) on this theme. 

Sian has long brought laser-beam clarity to the ways in which capitalism redefines the more-than-human world in financial terms. The investor class has not just introduced a handful of words; they have invented an entire worldview that erases nature and turns it into an essential element of capitalist production and profit. The natural world is re-interpreted through the scrim of money. That may not be pernicious in and of itself, but now that this perspective informs how the market/state order relates to the natural world, well….that’s a serious problem.

By “financialization,” Sullivan means the “revisioning and rewriting of the natural world in terms of financial terms and concepts.” She also means that banks and financiers regard “environmental conservation activities as new possibilities for speculative investments and products” – a new zone for profiteering and capital accumulation. 

This is deeply concerning because, as conservation itself becomes a way to make money, the line between “nature” and “capital” is starting to blur. The Orwellian term “natural capital” has become a way to justify a relentless extractivism, in the name of preserving nature!

Most people don’t really understand how money is created and what political choices are embedded in that process. As a result, the privatization of money-creation is largely invisible to public view, and the anti-social, anti-ecological effects of privately created, debt-based money go unchallenged. 

Mary Mellor, professor emerita at Northumbira University in the UK, wants to change this reality, as she explains in a recent essay, “Money for the People,” at the Great Transition Initiative website. Mellor, the author of Debt or Democracy and an expert on the development of alternative economies, writes that we must create new public circuits for money-creation so that we can direct money toward socially and ecologically needed activities, and not just the types of debt-driven loans that banks deem profitable. In other words, money-creation need not be controlled by private creditors in the course of creating debt.  

The average citizen knows that banks are too powerful and often predatory, but they may not realize that the state has largely ceded its power to create new money ("seignorage") to banks. Banks create new money out of thin air when they make loans. That money is not something they otherwise hold in a vault. It is literally created when a loan is approved. That is how banks make profits. 

The power to create new money is something that the government could feasibly control and administer itself, for the benefit of all.  But governments have surrendered their power of seignorage to the private banking system and its investors.

This has far-reaching, negative impact because, as Mellor explains, “It is the private, bank-issued money system that leaves us with a pernicious cycle of debt and growth. Money could encourage socially and ecologically sustainable production and consumption, but only if it ceases to be a creature of the market and is reclaimed as a social and public representation of value.”