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Excerpt: 'Inquiries Into The Nature Of Slow Money'

The following excerpt is the first chapter of Woody Tasch's Inquiries Into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered.

Every 250 years or so, it seems, we arrive at a threshold moment in the history of capital and culture.

In 1500, two men in Amsterdam stood on a bridge over a canal, designing the joint stock company, minimizing risk to capital, and galvanizing the flow of investment in exploration, conquest, and export. The outlines of the New World were as yet undefined and the notion of limits to growth unimaginable.

In 1750, two men in New Amsterdam stood under a tree on the cow path that would become Wall Street, designing a stock exchange that would create hitherto unknown degrees of financial liquidity and, so, galvanize the flow of capital in support of exploration, extraction, and manufacture. Corporations were small, continents were large, industrialization was incipient, the Prudent Man and the Invisible Hand about to enjoy their considerable time in the sun, and the notion that the resilience of natural systems had limits was about to suggest itself-but only briefly, and only to be swiftly discredited and debunked.

In 2000, we are entering a period of urgent postindustrial, post-Malthusian reassessment and reconnoitering. We find ourselves on a new threshold, signals of systemic unsustainability proliferating alongside those of ever accelerating capital markets and technological innovation. Consumerism and global markets are ascendant, carbon sinks are overloaded, and the idea of limits to growth calls for radical reconsideration.

It falls to us to undertake a new project of system design: the creation of new forms of intermediation that catalyze the transition from a commerce of extraction and consumption to a commerce of preservation and restoration.

Speed is one of the defining characteristics of our age. As much as in the Age of Ones and Zeros or the Age of Gigabytes and Megatons, we live in the Age of Hockey Sticks.

Breaking the six-billion-person and the billions-of-instructions-per-second and the billions-of-shares-per-day barriers, we are disoriented by the seductions of speed. At the same time, our knowledge of the world becomes considerably more complete, affording us truer perspectives on the incompleteness of economics disconnected from bioregions and communities, markets disconnected from places, wealth disconnected from health.

GDP growth driven by subdivisions and highways and Mustangs and 727s made sense in a pre-smog, pre-urban-blight, pre-sprawl world. Buy Low/Sell High made sense in a world that could not conceive of a $350 billion Wal-Mart, a $53 million Christmas bonus, a $400 million golden parachute, or a China that is building one coal-fired power plant a week and more roads in 2008 than it had in the preceding fifty years.

Now, a thousand billionaires and a billion thousandaires signal structural limits to the power of industrial finance. Close to four hundred parts per million of carbon in the atmosphere signals limits to the economics of maximum growth. The campaign to drag 1 or 2 percent of foundation assets back across the iron curtain between asset management and grant making signals the limits of the culture of Wealth Now/Philanthropy Later. And, most recently, the subprime mortgage collapse signals the limits of ever accelerating, ever more complex, derivative-driven financial markets.

Organized from "markets down" rather than from "the ground up," industrial finance is inherently limited in its ability to nurture the long-term health of community and bioregion. These limits are nowhere more apparent than in the food sector, where financial strategies optimizing the efficient use of capital have resulted in cheap chemical-laden food, depleted and eutrophied aquifers, millions of acres of GMO corn, trillions of food miles, widespread degradation of soil fertility, a dead zone in the Gulf of Mexico, and obesity epidemics side by side with persistent hunger.

"Food," as the poet Gary Snyder observed, "is the field in which we daily explore our harming of the world." It is also the field in which we daily explore the boundaries between investing and philanthropy. Using global markets as our guide, we choose commodity production over soil fertility, leaving the vast majority of sustainable-agriculture enterprises with little or no access to either investment capital or philanthropic support.

While organics grows at 20 percent per annum on its way past 3 percent of U.S. food-industry revenues, and Whole Foods' emergence as a Fortune 500 company heralds wider market acceptance of organics, the facts on the ground remain stark. Only 0.5 percent of U.S. farmland is organic. Only 0.1 percent-less than $50 million per annum-of U.S. foundation grants go to sustainable agriculture. Only 0.1 percent of the USDA's budget supports organics. Roughly the same order of magnitude of venture capital targets organics, and most of that goes to organic brands that have limited relevance to the health of local food systems.

The challenge of reintegrating social and environmental concerns into the financing of food mirrors similar processes underway in broader capital markets and philanthropic arenas.

Socially responsible investing, mission-related and program-related investing by foundations, venture philanthropy, social entrepreneurship, local economies, consumer demand for organics and green products-these are the first stages of a more profound fiduciary realignment. Some of these initiatives remain incremental and ambiguity-laden. Others are indicators of more fundamental, tectonic shifts along the boundaries of for-profit and nonprofit, shareholder and stakeholder, global investor and local citizen.

This process of economic and cultural transformation calls for a new prudence, a new urgency, a new vision of capital markets designed to usher in the age of restorative economics, integrating into the theory of fiduciary responsibility and the practice of asset management principles of carrying capacity, care of the commons, sense of place, cultural and biological diversity, and nonviolence.

One of the principal measures of our success will be the extent to which we have catalyzed substantial new capital flows to enterprises that create economic opportunity while respecting, protecting, and promoting the fertility of the soil.

This excerpt from Woody Tasch's Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered, is printed with permission from its publisher, Chelsea Green.

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Woody Tasch